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Indonesia Jan-April approved FDI up 68.6%

23 May 2003, JAKARTA - Approved foreign direct investment for Indonesia rose 68.6% in the first four months of the year to EUR2.66 billion from the same period last year, Senior Economics Minister Dorodjatun Kuntjoro-jakti said Friday. However, the rise in planned foreign investment wasn't matched by local investors. The minister said approved investment proposals from local investors dropped 51.6% to 4.2 trillion rupiah (EUR1=IDR9,700) in the January-April period from the same period last year.
FDI in Indonesia sank following the 1997-98 Asian financial crisis, which quickly led to social and political turmoil. Some foreign investors have shown renewed interest in Indonesia recently and bought assets controlled by the Indonesian Bank Restructuring Agency and government stakes in some state-owned companies, including telecommunications firms. Portfolio investors have been attracted to Indonesia's capital markets since March because of the favorable returns vis-a-vis other countries in the region.
However, long-term foreign investors are still reluctant because of the investment risk associated with Indonesia's weak and corrupt judiciary system.