Indonesia's FDI hits five-year high

Foreign investors pour in US$12.93 bil. in 2007

Wednesday, December 19, 2007

AFP

JAKARTA -- Actual foreign direct investment (FDI) in Indonesia reached US$10.2 billion as of mid-December, the highest since 2002, National Investment Coordinating Board chief Muhammad Lutfi said Tuesday.

The figure is well up on the US$5.97 billion recorded for the whole of 2006 amid an improving investment climate that has lured Taiwanese and South Korean investors, he said.

"This year's actual FDI was the highest since 2002. Investments from Taiwan and South Korea increased significantly partly because the government conducted aggressive promotions there," Lutfi told reporters.

He said US$3.29 billion of FDI went into the transportation, communication, chemical, storage and food processing industries.

Meanwhile actual domestic investment as of December 15 stood at 34.14 trillion rupiah (US$3.7 billion), also surpassing the 20.78 trillion rupiah for the whole of last year, Lufti said.

Nearly half was poured into eight major projects in the paper and plastic industries.

Singapore was the biggest source of actual FDI at US$3.74 billion, followed by the United Kingdom with US$1.69 billion, South Korea with US$626.8 million, Japan with US$602.7 million and Taiwan with US$469.6 million.

Lutfi expected both actual foreign and domestic investment to grow by 15.2 percent next year, assuming the government will not raise fuel prices.

The government subsidises fuel in Indonesia, with high global oil prices putting ongoing pressure on its budget.
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