Bomb In Makassar, How It Affects Jokowi's IDR 900 Trillion Investment Target

Illustration (Irfan Meidianto/VOI)

JAKARTA - The suicide bombing occurred after the Palm Sunday Mass at the Makassar Cathedral, South Sulawesi. As a result of this incident two people suspected of having died and as of Sunday, March 28, afternoon, as many as 20 people were injured.

It is feared that the bomb terror incident in Makassar will affect the investment climate in the country. Then, how much influence will it have on Jokowi's investment target this year?

Executive Director of the Institute for Development of Economics and Finance alias Indef, Tauhid Ahmad said, it is undeniable that the suicide bombing in Makassar will affect investors' confidence to invest in the area.

"There must be an effect but a little. I think it is in shock. People will see whether the South Sulawesi area is still safe or not (to invest). It could also be that the shock does not last long," he said when contacted by VOI, Monday, March 29.

Reflecting on past experiences, Tauhid said that if the target of terrorism is regional, the effect is relatively small on incoming investment. Tauhid said that there was also influence at the national level, but it was relatively small.

"I think there is an influence at the national level but it is very small. Because in fact, we are relatively safe. There has been no terrorism in the last few years. It turns out that now there is an incident, meaning that there is still a potential danger," he explained.

However, said Tauhid, the conditions would be different if the targets targeted by the terrorism network were big cities that were investment destinations.

"The investment rating is carried out in the first two major cities in Jakarta (the capital city) and Surabaya. The perception is carried out by a survey of employers in the two cities. If these two cities happen, apologize will change the perception bigger," he said.

For your information, after the suicide bombing in Makassar, the police secured four members of the Jamaah Ansharut Daulah (JAD) network in Bima, West Nusa Tenggara (NTB). However, said Tauhid, this would not have a major effect on investor confidence at the national level.

"In the regions that are not the target of investment surveys and so on, it is still relatively small (the effect on investor confidence)," he said.

According to Tauhid, the suicide bombing in Makassar and the capture of the terrorism network in West Nusa Tenggara did not have a big impact on Jokowi's investment target in 2021.

"The current situation (growth) of investment is now more dominant in Java Island. In West Nusa Tenggara there is relatively little (inward investment), rather a lot of it is in Makassar because it is the center of growth in Eastern Indonesia," he explained.

Jokowi's Jumbo Target

Previously, President Joko Widodo (Jokowi) asked that the realization of investment exceed IDR 900 trillion in 2021. This target is much higher than the 2020 target.

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Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia confirmed this. Bahlil said, to achieve the target of IDR 900 trillion, BKPM must at least increase the investment of 8.95 percent from the 2020 realization of IDR 826 trillion.

In fact, said Bahlil, the target given by Jokowi was also higher than the BKPM target of IDR 856 trillion.

"Our target is that even though the National Development Planning Agency (Bappenas) submits approximately IDR 856 trillion, we under the President's direction to us it must be IDR 900 trillion," he said in a virtual press conference, Monday, January 25.

Bahlil admitted that the target set by Jokowi was not an easy job. However, the parties will work hard with the strategy owned by BKPM.

"I will try to formulate it with concrete, comprehensive and measurable steps in order to achieve this target," he explained.

According to Bahlil, Jokowi's targeted realization could be achieved if the pandemic could be handled properly. One way is with the vaccination program that has been run by the government.

"Second, the existence of the Job Creation Law has a positive impact on investors. We plan to execute it in February," he said.

The BKPM recorded investment realization in 2020 amounting to IDR 826.3 trillion. The realization reached 101.1 percent of this year's investment target of IDR 817.2 trillion. The amount of investment in the January-December 2020 period rose 2.1 percent compared to the same period last year of IDR 809.6 trillion.

If detailed, investment from domestic investment (PMDN) is IDR 413.5 trillion or 50.1 percent of the total investment, while from foreign investment (PMA) is IDR 412.8 trillion or 49.9 percent.