Investments More Than Double in First 8 Months

Actual domestic and foreign direct investments (FDI) in Indonesia during the first eight months of the year rose 123% from a year earlier to $11.70 billion, the National Investment Coordinating Board (BKPM) said Friday.

Actual FDI in the January to August period rose 106.9% from last year to $8.13 billion, while domestic investment surged 171.9% to $3.57 billion, Agence France-Presse reported. Realized investment projects absorbed 203,190 workers, BKPM said.

The paper and printing industries were the most popular sectors for foreign investment, with approved proposals worth $13.81 billion during the first eight months. The chemical and pharmaceutical industry came in second with approved proposals worth $6.9 billion.

The figures do not include investments in oil and gas or the finance sector. These were the focus of business deals signed during the visit of Russian President Vladimir Putin on Thursday (6/9/07).

Altogether, the business deals were worth at least $5 billion, The Straits Times reported, and included a $1.5 billion investment in deep sea oil-and-gas exploration projects with state-owned PT Pertamina.

Another state-owned company, miner PT Aneka Tambang, signed an MoU with Russia's Rusal, the world's biggest producer of aluminum and alumina, to set up a $3 billion joint venture to manage the Kayan bauxite mining project in West Kalimantan.

M.S. Hidayat, chairman of the Indonesian Chamber of Commerce and Industry, said other deals included a tie-up between Bank Mandiri and Russia's Alfa Bank, which could push the total value of the business deals signed to $8 billion.

Jakarta also gave Russian visitors visa-on-arrival status in a move that could boost the number of Russian tourists. More than 20,000 Russians visited Indonesia last year, The Straits Times said.

Putin and President Susilo Bambang Yudhoyono told a join press conference they hoped bilateral trade could be pushed to $1 billion a year, up from the current level of close to $700 million, less than half a per cent of Indonesia's $162 billion total trade for 2006.

Inflation during August rose 0.75% for a year-on-year figure of 6.51%, prompting Bank Indonesia to leave its benchmark rate at 8.25%.

"Inflationary pressure is still high near term, that's why we have kept the rate unchanged," central bank governor Burhanuddin Abdullah told reporters, Reuters reported.

Analysts expect inflation to moderate in November after the major Idul Fitri holiday, giving the central bank room for another quarter-point cut by the end of the year.

Total exports for July put on 4.2% to $9.81 billion, with non-oil and gas exports putting on 5.3% month-on-month to $8.02 billion. The value of imports rose 5.5% to $6.26 billion.

The Jakarta Stock Exchange composite index closed the week at 2,239.90, 0.9% up on the day Friday amid new enthusiasm for the market on expectations of strong second half earnings and overall prospects for the economy. The rupiah was stable, trading at 9,398/9,403 to the US dollar.


Jan-July 07/
Jan-July 06
Trade surplus
First semester
Total exports
$9.42 billion
$9.81 billion
$19.99 billion
Non-oil & gas exports
$7.61 billion
$8.02 billion
$19.61 billion

July (y-o-y)
July (m-o-m)
August (y-o-y)

Full year 2005
Full year 2006
1Q 2007
1H 2007
GDP growth
Tourist arrivals
Growth/loss (m-o-m)

Source: Central Statistics Agency
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