Since the third quarter of 2020, investments in Indonesia have not remained concentrated in the Java Island region, Minister of Investment and the head of the Investment Coordinating Board, Bahlil Lahadalia, has informed.
“We have recorded that 50.5 percent of investments were aimed at regions outside Java Island in 2020, while investments within Java Island region reduced to 49.5 percent,” he said during an online discussion in Jakarta on Wednesday.
The total value of investments outside Java Island reached Rp417.5 trillion (around US$29.2 billion) from 54,994 projects, while the investment value within Java Island was Rp408.8 trillion (around US$64.9 billion) from 98,355 projects, Lahadalia disclosed.
A similar trend was seen in the first half of 2021, when investments outside Java Island increased to 51.5 percent, and investments in Java further declined to 48.5 percent, he noted.
The total investment realization in Indonesia in the first half of 2021 was Rp442.7 trillion (around US$30.9 trillion), or 49.2 percent of the total investment target of Rp900 trillion (around US$63 billion), the minister informed.
“For this year, President Joko Widodo has directed us to increase the investment value target from the earlier planned estimate of Rp856 trillion (around US$59.9 trillion),” Lahadalia said.
The investment minister then pointed out three factors that have contributed to regions outside Java attracting investment. The President’s determination to decentralize national development investment away from Java has influenced potential investors to consider investing outside Java Island, he said.
The recent tendency among industries to construct factories close to the material sources and attractive incentives and benefits for corporations investing outside Java have also drawn investment to regions outside Java, Lahadalia explained.
“The current mission of the government is to equalize economic development by developing new economic centers and attracting investors to invest in other regions outside Java Island,” the minister remarked.
Source: Antara News