JAKARTA - Institute for Development of Economics and Finance (Indef) senior economist Faisal Basri said investments entering Indonesia were not of high quality.
Faisal made an analogy that investments that have entered so far are based on muscles or physical development, not brains such as investment in information and technology (IT) to research.
Based on data from the Asia Productivity Organization, said Faisal, as much as 83 percent of investment investment in the country is related to construction and buildings. Meanwhile, 10 percent is in the form of capital for non-IT.
Then, continued Faisal, only 4 percent of investment is related to transportation development. Then, 3 percent of investment in the IT sector.
Furthermore, Faisal said, this figure shows the increasing growth in investment entering the country, but unfortunately it is not of high quality.
"So from here it shows that the growth is getting bigger and less quality because the investment that is being echoed is just making the capital, LRT, MRT, high-speed trains, okay, we don't refuse but must be accompanied by brain injections in the form of IT Capital, Other non-IT Capital and R&D," he said in an early note for the 2023 Indef year, Thursday, January 5.
From the Asia Productivity Organization data, said Faisal, there is no incoming investment related to research and development or research and development (R&D).
"This is unfortunate. If R&D is strong then there is an innovation capability to build Indonesia so that it is more competitive," he said.
Moreover, continued Faisal, the Indonesian industrial sector has also experienced setbacks. This is due to a lack of research and innovation in industries in Indonesia.
"If the R&D is bad, then the innovation is also bad. So the industry is not competitive," he said.
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