Thailand Overseas Investment Center

Boost for Widodo as investment in Indonesia picks up to record

Foreign direct investment in Indonesia quickened in the first full quarter since Joko Widodo became president, providing a boost to the leader's goal of revitalising Southeast Asia's biggest economy.

Approved foreign investment climbed 14 per cent in the first three months of 2015, faster than the 10.5 per cent rate in the previous quarter, according to Indonesia Investment Coordinating Board data released in Jakarta on Tuesday. Total investment rose 16.9 per cent to a quarterly record of 124.6 trillion rupiah (HK$74.4 billion), it said.

Widodo, known as Jokowi, took office in October pledging to lift growth by cutting red tape, building infrastructure and attracting investment. By January, he had scrapped petrol subsidies to free up government funds for spending on transport and other works. Yet in the ensuing months, his ministers announced rules that made it harder to do business, including a ban on selling beer in convenience stores and a plan to require proficiency in Indonesian from foreigners seeking employment.

"So far investment is still doing well despite depreciation in the exchange rate," Josua Pardede, an economist at Bank Permata in Jakarta, said before the data. "Investment commitment was high due to hopes on Jokowi as he has done structural reform since the beginning of the year."

Jokowi has pledged to simplify permits, upgrade ports and roads, and curb corruption in the government. He has set a 7 per cent goal for gross domestic product growth within his term ending in 2019, up from last year's 5 per cent.

Singapore, Japan and South Korea were the three biggest investors by nation in the past quarter, the investment board said, without naming firms.

CR:http://www.scmp.com/business/article/1779742/boost-widodo-investment-indonesia-picks-record