Bali :

News Flash:

Indonesian Investment Q1/ 2022

Share on facebook
Share on twitter
Share on linkedin
Share on pinterest
Share on telegram
Share on whatsapp
Share on email

The Ministry of Investment/ Investment Coordinating Board (BKPM) recently published Q1/ 2022 Investment Realization data totalling IDR 282.4-trillion.

This is 28.5% higher than realization in the Q1/ 2021 and also 16.9% higher than realization in the previous quarter. The realization contributes 23.5% to the total target of IDR 1,200-trillion in 2022.

Bahlil Lahadalia said, “With an increase percentage of investment realization in Q1/ 2022, it shows that domestic and foreign investors’ trust is increasing toward government policies, especially in the investment policy.”

Based on Investment Reports, Domestic Direct Investment (DDI) growth in the Q1/ 2022 increased by 25.1%, from IDR 108-trillion in Q1/ 2021 to IDR 135.2-trillion. The transportation, warehouse and telecommunications sectors contributed most of the realization of domestic investment.

Meanwhile, in the same period, Foreign Direct Investment (FDI) increased 31.8% compared to Q1/ 2021, from IDR 111.7-trillion to IDR 147.2-trillion. This was largely from the Basic Metals, Metals, Non-Machinery and Equipment Industry sector. As this sector plays a significant role it is President Joko Widodo’s policy to ban the export of raw materials from mining in order to promote down-streaming activities, particularly for the nickel processing industry.

The top five sectors contributing to FDI and DDI realization in Q1/ 2022 are:

  1. Metal Industry, Metal-Based Goods, Non-Machinery and Equipment Industry (IDR 39.7 trillion, 14.0%);
  2. Transportation, Warehouse, and Telecommunication (IDR 39.5 trillion, 14.0%);
  3. Mining (IDR 35.2 trillion, 12.5%);
  4. Housing, Industrial Estate, and Office Building (IDR 24.9 trillion, 8.8%); and
  5. Electricity, Gas, and Water Supply (IDR 23.1 trillion, 8.2%).

The manufacturing sector still plays a very important role in increasing Investment Realization and remains a driver of economic growth.

The Ministry of Investment/ BKPM documented the top five locations where FDI and DDI occurred as:

  1. Special Territory of Jakarta (IDR 40.4 trillion, 14.3%);
  2. West Java (IDR 39.5 trillion, 14.0 %);
  3. Riau (IDR 23.7 trillion, 8.4%);
  4. East Java (IDR 23.6 trillion, 8.4%); and
  5. Central Sulawesi (IDR 20.0 trillion, 7.1%).

As a reflection of economic equality in Indonesia, investment growth outside Java is currently quite stable and continues to increase significantly, reaching IDR 148.7-trillion in Q1/ 2022. It increased by 16.6% to IDR 127.5-trillion compared to Q4/ 2021. It is indicated by the existence of Riau and Central Sulawesi provinces as part of top five investment locations for FDI as well as DDI and contributed 8.4% and 7.1% to total Investment Realization.

The significant growth of investment outside Java for FDI in this quarter is shown by Central Sulawesi, which grew the fastest at 12.9% followed by Riau at 9.9% and North Maluku at 7.3%.

“I was ordered by the President to create inclusive and quality investment, where investment in Java and outside Java arranged in good proportions, the added value of natural and mineral resources was increased, as well as the growth of new economic in the region. For this reason, all units in the Ministry of Investment / BKPM with out of the box efforts in the context of achieving inclusive investment” explained Bahlil Lahadalia.

The top five countries of origin for FDI are:

  1. Singapore (USD 3.6-billion, 34.8%);
  2. Hong Kong (USD 1.5-billion, 15.0%);
  3. China (USD 1.4-billion, 13.2%),
  4. Japan (USD 0.8-billion, 8.0%); and
  5. United States Of America (USD 0.6-billion, 6.1%).

From the data above, it can be seen that in the last two quarters, the United States has entered the top 5 countries of origin for FDI, which proves the diversification of sources of origin that is not only focused on the East Asia region.

***

Overview

DDI Investment Realization in the Q1/ 2022 increased by 25.1 % compared to the same period in 2021 from IDR 108-trillion to IDR 135.2-trillion.

FDI Investment Realization in the Q1/ 2022 increased by 31.8 % compared to the same period in 2021 from IDR 111.7-trillion to IDR 147.2-trillion.

The highlights of the Investment Realization of DDI and FDI in Q1/ 2022 are:

1. Domestic Direct Investment Realization
DDI Realization based on the top five leading sectors:

  1. Transportation, Warehouse, and Telecommunication (IDR 27-trillion);
  2. Mining (IDR 18.4-trillion);
  3. Housing, Industrial Estate, and Office Building (IDR 17.5-trillion);
  4. Food Crops, Plantation, and Livestock (IDR 10.1-trillion); and
  5. Industrial Foods (IDR 9.7-trillion).

If all of those industrial sectors are combined, it shows that the industrial sectors contributed as much as IDR 25.6-trillion or 18.9% of the total DDI.

DDI Realization based on the  top five leading locations:

  1. Special Territory of Jakarta (IDR 22.9-trillion);
  2. West Java (IDR 21.2-trillion);
  3. East Java (IDR 15.4-trillion);
  4. East Kalimantan (IDR 10.2-trillion); and
  5. Riau (IDR 9.1-trillion).

2. Foreign Direct Investment Realization

FDI Realization based on the top five leading sectors:

  1. Metal, Metal Goods, Except Machinery and Equipment Industry (USD 2.6-billion);
  2. Mining (USD 1.2-billion);
  3. Electricity, Gas, and Water Supply (USD 1-billion);
  4. Transportation, Warehouse, and Telecommunication (USD 0.9-billion); and
  5. Chemical and Pharmaceutical Industry (USD 0.8-billion).

If all of those industrial sectors are combined, it shows that the industrial sectors contributed as much as USD 5.4-billion or equivalent to 52.9% of the total FDI Realization.

FDI Realization based on the top five leading locations:

  1. Central Sulawesi (USD 1.3-billion);
  2. West Java (USD 1.3-billion);
  3. Special Territory of Jakarta (USD 1.2-billion);
  4. Riau (USD 1.0-billion); and
  5. North Maluku (USD 0.7-billion).

FDI Realization based on the top five of countries of origin:

  1. Singapore (USD 3.6-billion, 34.8%);
  2. Hong Kong (USD 1.5-billion, 15.0%);
  3. China (USD 1.4-billion, 13.2%);
  4. Japan (USD 0.8-billion, 8.0%) and
  5. United States of America (USD 0.6-billion, 6.1%).

3. Distribution of Project Locations
In Q1/ 2022, Investment Realization in Java was equal to IDR 133.7-trillion and investment realization outside Java was equal to IDR 148.7-trillion. When compared to the same period in 2021, there was an escalation in Java by 26.9% and an increase in investment of outside Java by 30.0%.

4. Indonesian Labour Absorption
The realization of Indonesian labour absorption in the Q1/ 2022 reached 319,013-Indonesian labourers;  190,728-Indonesian labourers from DDI projects and 128,285-Indonesian labourers from FDI projects.

5. Regional Investment Realization: January – March 2022:

  1. Sumatra IDR 63.3-trillion (22.4%); IDR 33.7-trillion of DDI and USD 2.1-billion of FDI.
  2. Java IDR 133.7-trillion (47.3%); IDR 72.9-trillion of DDI and USD 4.2-billion of FDI.
  3. Kalimantan IDR 29.1-trillion (10.3%); IDR 19.4-trillion of DDI and USD 0.7-billion of FDI.
  4. Sulawesi IDR 31.7-trillion (11.3%); IDR 3.5-trillion of DDI and USD 2-billion of FDI.
  5. Bali and Nusa Tenggara IDR 8.2-trillion (2.9%); IDR 5-trillion of DDI and USD 0.2-billion of FDI.
  6. Maluku and Papua IDR 16.4-trillion (5.8%); IDR 0.7-trillion of DDI and USD 1.1-billion of FDI.

 

Source: BKPM Press Releases

Latest Article

Join Our Online Forum

The Bali Expat Forum is one of the longest-running online communities for expats living in Bali. Click here to join

Andrzej Barski

Director of Seven Stones Indonesia

Andrzej is Co-owner/ Founder and Director of Seven Stones Indonesia. He was born in the UK to Polish parents and has been living in Indonesia for more than 33-years. He is a skilled writer, trainer and marketer with a deep understanding of Indonesia and its many cultures after spending many years travelling across the archipelago from North Sumatra to Irian Jaya.

His experience covers Marketing, Branding, Advertising, Publishing, Real Estate and Training for 5-Star Hotels and Resorts in Bali and Jakarta, which has given him a passion for the customer experience. He’s a published author and a regular contributor to local and regional publications. His interests include conservation, eco-conscious initiatives, spirituality and motorcycles. Andrzej speaks English and Indonesian.

Terje H. Nilsen

Director of Seven Stones Indonesia

Terje is from Norway and has been living in Indonesia for over 20-years. He first came to Indonesia as a child and after earning his degree in Business Administration from the University of Agder in Norway, he moved to Indonesia in 1993, where he has worked in leading positions in education and the fitness/ wellness industries all over Indonesia including Jakarta, Banjarmasin, Medan and Bali.

He was Co-owner and CEO of the Paradise Property Group for 10-years and led the company to great success. He is now Co-owner/ Founder and Director of Seven Stones Indonesia offering market entry services for foreign investors, legal advice, sourcing of investments and in particular real estate investments. He has a soft spot for eco-friendly and socially sustainable projects and investments, while his personal business strengths are in property law, tourism trends, macroeconomics, Indonesian government and regulations. His personal interests are in sport, adventure, history and spiritual experiences.

Terje’s leadership, drive and knowledge are recognised across many industries and his unrivalled network of high level contacts in government and business spans the globe. He believes you do good and do well but always in that order. Terje speaks English, Indonesian and Norwegian.

Contact Our Consultants

[wpforms id=”43785″]

Ridwan Jasin Zachrie

CFO of Seven Stones Indonesia, Jakarta

Ridwan is one of Indonesia’s top executives with a long and illustrious career in the financial world. He holds several professional certifications including being a Certified Business Valuer (CBV) issued by the Australian Academy of Finance and Management; Broker-Dealer Representative (WPPE); and The Directorship Certification for Directors and Commissioners, issued by the Indonesian Institute of Commissioners and Directors.

His experience includes being the Managing Director at one of the top investment banking groups in the region, the Recapital Group, the CFO at State-owned enterprises in fishery industry and the CEO at Tanri Abeng & Son Holding. He’s also been an Independent Commissioner in several Financial Service companies and on the Audit and Risk Committee at Bank BTPN Tbk, Berau Coal Energy Tbk, Aetra Air Jakarta as well as working for Citibank, Bank Mandiri and HSBC. His last position was as CFO at PT Citra Putra Mandiri – OSO Group.

Ridwan has won a number of prestigious awards including the Best CFO Awards 2019 (Institute of Certified Management Accountant Australia-Indonesia); Asia Pacific Young Business Leader awarded by Asia 21 Network New York USA (Tokyo 2008); UK Alumni Business Awards 2008 awarded by the British Council; and The Most Inspiring Human Resources Practitioners’ version of Human Capital Magazine 2010.

He’s a member of the Board of Trustees of the Alumni Association of the Faculty of Law, Trisakti University, Co-Founder of the Paramadina Public Policy Institute and actively writes books, publications and articles in the mass media. He co-authored “Korupsi Mengorupsi Indonesia” in 2009, which helps those with an interest in understanding governance in Indonesia and the critical issue of corruption. Ridwan speaks Indonesian and English.

Per Fredrik Ecker

Managing Director of Seven Stones Indonesia, Jakarta

Per is the Managing Director of the Seven Stones Indonesia (SSI) Jakarta office and has more than 25-years’ experience in Indonesia, China, and Western Europe. He previously worked in senior management positions with Q-Free ASA, Siemens AG, and other companies in the telecom sector. Over the last six years, he has been the Chairman of the Indonesia-Norway Business Council (INBC) and recently become elected to be on the board of EuroCham Indonesia.

His most recent experience is within Intelligent Transport Solutions (ITS), Telecom, and other sectors within the Indonesian market. He is today through his position in SSI and by representing Norway Connect, promoting Nordic and European companies that would like to explore business opportunities in the Indonesian market. He’s also playing an active role to help create the Nordic House concept in Jakarta that will provide an excellent platform for Nordic companies entering Indonesia, where they’ll find a community that can offer support with trusted information and affordable services to enter this market.