Senior Economist Questions Latest Investment Figures from BKPM

Senior Indonesian economist Faisal Basri claims that the latest numbers shared by Investment Minister Bahlil Lahadalia on the amount of investment pouring into Indonesia should be taken with a pinch of salt, report Tempo.

“Investments are not IDR 1,200-trillion. What I often hear that is flawed is the statement from the Investment Minister. He says that IDR 1,200-trillion, reaches Indonesia’s investment target,” said Basri from the University of Indonesia on January 31. 

Basri said the Head of the Investment Coordinating Board (BKPM) often claims to have reached the investment realization target for 2022 which exceeds IDR 1,200-trillion, while in fact the realization of investment in Indonesia as a whole is greater than that, reaching IDR 5,000-trillion, say Tempo.

“The IDR 1,200-trillion claimed by the Minister of Investment is only one-fifth of the total,” said Bahlil. “So, he doesn’t take care of investment as a whole, (but) only investments coming through BKPM (Investment Coordinating Board). In fact, most of the investments do not go through BKPM.”

However, he did acknowledge that Indonesia’s investment achievement remains commendable. He gave an example of the tourism sector that grew to 4.6-million foreign visitors. 

“But this is still far from the achievement prior to the pandemic of 6-million. Our investment is actually pretty cool, only China has a higher investment than Indonesia. While the rest in Asia, we remain the highest,” said the senior economist.

He insisted that the crucial issue in Indonesia remains in its high percentage of corruption, which reflects in the corruption perception index score that has yet again dropped.

“So, to produce all of this, an additional 50-percent more capital is needed than the previous regimes. This is what should be in the Omnibus,” said Basri.

As previously reported, Minister Bahlil Lahadalia announced investment realization data for 2022 reached IDR 1,207.2-trillion. This figure is 100.6-percent of the initial target set at IDR 1,200-trillion.

This achievement increased by 34-percent compared to the same period in 2021 and succeeded in absorbing 1,305,001 Indonesian workers (TKI).

“Our target is 1.3 million (TKI) from (investment) IDR 1,200 trillion. But there are 7 million more from MSMEs, so it is achieved,” said Bahlil after a press conference at the BKPM office, in South Jakarta on Tuesday, January 24.

He explained that the investment realization value in 2022 was the largest in history and that the investment realization target in the RPJMN (National Medium Term Development Plan) was actually around IDR 968-trillion, but President Jokowi gave a target of IDR 1,200-trillion.

Source: Tempo

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