Dean Of FEB UI: East Indonesia Region Becomes A New Magnet For Foreign Investment

Illustration. (Photo: Doc. Antara)

JAKARTA - The Dean of the Faculty of Economics and Business, University of Indonesia (FEB UI) Teguh Dartanto assesses that eastern Indonesia is a new magnet for foreign investment (foreign investment/PMA).

This refers to the realization of investment realization outside Java Island in the first semester of 2022 which is superior to Java Island with a contribution of IDR 305.8 trillion or 52.3 percent of the total investment. The investment in Java in the same period reached IDR 278.8 trillion or 47.7 percent of the total investment.

"Outside Java has become a new magnet for investment, especially FDI. This means that there is a shift that shows that other regions have the potential to be noticed by investors. There is economic potential," said Teguh in the webinar "The Impact of Realization of Investment in Semester I 2022 on the National and Regional Economy" , quoted from Antara, Friday, July 29.

Teguh assessed that the Maluku, Papua, and Sulawesi areas are indeed attractive for foreign investment, especially regarding downstreaming. The downstream process promoted by the government has changed Indonesia, which previously only exported raw goods, can now process them domestically so that they are added value.

However, he reminded that the potential in the area must be accompanied by the provision of superior human resources and supply chain networks so that the benefits of investment can be felt by the local community.

"If this is not used, then the regional government will not be able to optimize its economic impact so that later there may be foreign direct investment in eastern Indonesia, but support from Java must also be encouraged and we ask that there be strengthening of local governments to understand this," he said.

Furthermore, Teguh also assesses the achievement of domestic investment realization (PMDN) throughout the first semester of 2022 which has an interesting side.

During January-June 2022, the realization of PMDN reached IDR 274.2 trillion or 49.6 percent of the total investment realization, while the realization of PMA reached IDR 310.4 trillion or 53.1 percent of the total investment realization.

Although lower than the achievement of PMA, the realization of PMDN shows that the nation's children have the capacity to be able to support economic growth through investment.

"In addition to the issue of Java-outside Java, PMDN-PMA has another insight, that the nation's children have the power to empower, participate in moving the national economy," he said.

Previously, investment realization in the first semester of 2022 reached IDR 584.6 trillion, or 48.7 percent of the target set by President Jokowi of IDR 1,200 trillion. This achievement was also recorded to grow by 32 percent compared to the achievement of the first semester of 2021.