PRESS RELEASE
CHAIRMAN OF THE INDONESIAN INVESTMENT COORDINATING BOARD (BKPM) Foreign and Domestic Investment Realization
April - June (Q2) Results, 2010
Jakarta, July 28, 2010 – The Coordinating Board for Investment (BKPM) of the Republic of Indonesia today announces its second quarter investment realization figures for both domestic (“PMDN”) and foreign direct investment (“PMA”). The figures reported today are based on Investment Activity Reports (LKPM) reported by companies to BKPM.
This is the second quarter that BKPM is releasing investment realization figures using the LKPM methodology, as opposed to the Permanent Business License (“IUT”) method. The previous IUT methodology recorded investment plans once a company had obtained a Permanent Business License or Operating License, which may capture investment realization that occurred in the past 2-3 years, and therefore does not reflect the periodic flow of investments in real time.
The release of the new methodology for investment realization for both domestic and foreign capital was undertaken by BKPM to better reflect investment realization flows per period, recording investment as and when they occur, as opposed to cumulatively. With the new method, the reporting period for investment companies whose projects are still under development will now need to submit Investment Activity Reports every quarter, instead of every six months as previously required. For those investment companies who have obtained a Permanent Business License (IUT), they must now submit an Investment Activity Report every six months, instead of once a year as previously required.
Investment Realization for the second quarter of 2010:
Domestic and foreign investment realization in Q2 of 2010 totaled Rp. 50.8 trillion, with total investment in the development phase amounting to Rp. 46.4, while investment realization for companies who have already obtained a Permanent Business License have capital expenditures totaling Rp. 4.4 trillion.
The following is an illustration of investment realization growth in the second quarter of 2010:
The cumulative investment realization for the first half (six months) of 2010 is Rp. 92.9 trillion. If we compare this to the investment realization for the first six months of 2009, which totaled Rp. 66.4 trillion, investment grew by 39.9%. BKPM’s total investment target for 2010 is Rp. 160 trillion, the current realization figure has reached 58.1% of this year’s target.
“These are indeed very promising figures, given that we have made good headway towards achieving our 2010 target. Indonesia’s positive internal and external environment has also been supporting this momentum. Provided that we continue to work hard to improve the investment climate and tackle structural issues, there is no reason why we cannot reach this target,” says Mr. Gita Wirjawan, the Chairman of Indonesia’s Investment Coordinating Board. Investment realization breakdown
1. BKPM reports investment realization figures submitted by both domestic and foreign companies through the Investment Progress Report (LKPM). These LKPM reports include activity and investment realization of companies whose projects are still under the development phase, as well as investment realization arising from capital
expenditures after the business has obtained a permanent business license. 2. Notable realized investments by business sector for Domestic Investors are Food
Industry; 40% (Rp. 6,2 trillion; 108 projects), Food Crops & Plantation; 12% (Rp. 1,8 trillion; 42 projects), Transportation, Storage and Telecommunications; 11% (Rp. 1,7 trillion; 26 projects), Mining; 10% (Rp. 1,6 trillion; 5 projects) and Others; 26% (Rp. 4,0 trillion; 199 projects)
Investment realization growth: QI/2010:
- q-o-q: 81,5% - y-o-y: 24,6%
Q II/2010
- q-o-q: 20,7%
3. Notable realized investments by business sector for Foreign Investors are
Transportation, Storage and Telecommunications; 40% (US$. 1,5 billion; 48 projects), Mining; 17% (US$. 0,6 billion; 99 projects), Trade and Repairs; 11% (US$. 0,4 billion; 327 projects), Electricity, Gas and Water Supply; 7% (US$. 0,3 billion; 10 projects) and Others; 25% (US$. 0,9 billion; 663 projects).
4. Notable realized investments by project locationfor Domestic Investorsare in the East Java; 33% (Rp. 5,1 trillion; 32 projects), East Kalimantan; 24% (Rp. 3,7 trillion; 13 projects), West Java; 10% (Rp. 1,5 trillion; 34 projects), Riau;6% (Rp. 0,8 trillion; 38 projects) and Others; 27% (Rp. 4,1 trillion; 263 projects).
5. Notable realized investments by project locationfor Foreign Investorsare in Jakarta; 50% (US$. 1,9 billion; 370 projects), East Java; 13% (US$. 0,5 billion; 29 projects), Papua; 5% (US$. 0,2 billion; 8 projects), Bali; 5% (US$. 0,2 billion; 69 projects) and Others; 27% (US$. 1,0 billion; 673 projects).
Domestic Investment by Sector Q2/2010
Foreign Investment by Sector Q2/2010
Domestic Investment by Location Q2/2010
6. Notable realized investments by country of originare Singapore totaling US$ 1.6 billion; 156 projects; Hongkong; US$ 0.8 billion; 27 projects; United States of America valued at US$ 0.3 billion; 33 projects; Japan valued at US$ 0.2 billion; 98 projects; and the
Netherlands valued at US$ 0.2 billion; 43 projects and others; US$0.8 billion, 792 projects.
7. Labor force absorptionarising from total realized investments reached 211,040 persons, 92,331 personsof which resulted from domestic investments, and 118,709of which resulted from foreign investments.
Comparison of Investment Realization between BKPM, Bank Indonesia and Indonesian Statistical Bureau (BPS)
It is important to note that the investment realization figures (domestic and foreign) which are reported by BKPM differs from the Foreign Direct Investment figures reported by Bank
Indonesia (BI) in its Balance of Payments method (“BOP”), as well as the data reported by the Statistical Bureau in its Gross Fixed Capital Formation figure.
The investment realization reported by BKPM records realized domestic investment (PMDN) and realized foreign investment (PMA) from companies that register for business licenses to BKPM and only records investment activity and realization outside of the following sectors: Oil and Gas, Banking, Financial Institutions, non-bank Financial Institutions, Insurance, Leasing, Portfolio Investments, Capital Markets Investments, Investments whose licensing are issued by technical Ministries, as well as Household Investments.
The Foreign Direct Investment Figure that is reported by BKPM differs from those reported by BI in that, BI uses the Balance of Payments method which records the net inflow and outflow of foreign capital fund flows that enters into Indonesia from abroad. FDI as recorded by BI, captures direct investments from Indonesian nationals living abroad, as well as FDI within Indonesia. Unlike the BKPM method, the BI method also captures investments in all sectors. In the Indonesian Bureau of Statistics (BPS) method, the Gross Fixed Capital Formation (GFCF) formula is used, which is one of the components of the Gross Domestic Product. The domestic and foreign investment recorded by BKPM is only a small part of this GFCF. For more detailed information on these comparisons, please see the attached matrix.
Jakarta, 28 Juli 2010
INVESTMENT DATA OF BANK INDONESIA, BKPM AND STATISTICAL BUREAU (BPS)
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