Domestic and Foreign Direct Investment in Indonesia Grows Strong in Q1-2013
In Quarter I 2013 (January-March), total investment in Indonesia increased 30.6 percent to IDR 93.0 trillion (US $9.58 billion) compared to the same period in 2012 according to data from the Indonesia Investment Coordinating Board (Badan Koordinasi Penanaman Modal, abbreviated BKPM), a government institution. Of this total amount, about seventy percent is accounted for by foreign direct investment, while the remaining thirty percent constitutes domestic direct investment.
Both domestic and foreign investment in Indonesia experienced robust growth, which should have a positive impact on the country's unemployment rate. Domestic direct investment (PMDN)¹ realization in QI-2013 grew 39.6 percent compared to Q1-2012, while foreign direct investment (PMA)² grew 27.2 percent compared to the same period last year. A little over half of total investments were realized on the island of Java (Indonesia's most populous island).
| Quarter I 2012¹ |
Quarter I 2013¹ |
Growth | |
| Investment |
71.2 | 93.0 | 30.6% |
| – Domestic | 19.7 | 27.5 | 39.6% |
| – Foreign | 51.5 | 65.5 | 27.2% |
¹ in IDR trillion
Source: Indonesia Investment Coordinating Board (BKPM)
Muhamad Chatib Basri, chairman of the BKPM stated: “we have made some efforts to improve the investment climate, among others the simplification of investment licensing through the issuance of Chairman of BKPM Regulation Number 5 Year 2013. With the implementation of the new regulation, it is expected that the investment realization of foreign and domestic investment can grow significantly, particularly in the business sectors which provide high added value.”
The largest countries (in terms of foreign investment in Indonesia) are Japan (USD $1.2 billion), USA (USD $0.9 billion), South Korea (USD $0.8 billion), Singapore (USD $0.6 billion), and the United Kingdom (USD $0.5 billion).
Largest Sectors of Foreign Direct Investment in Indonesia (Q1-2013)
| Sector | Amount in USD billion |
| Mining |
1.4 |
| Chemical and Pharmaceutical Industry | 1.2 |
| Metal, Machinery and Electronic Industry | 1.0 |
| Transport Equipment and Other Transport Industry | 0.9 |
| Paper and Printing Industry | 0.6 |
Largest Sectors of Domestic Direct Investment in Indonesia (Q1-2013)
| Sector | Amount in IDR trillion |
| Mining |
6.0 |
| Transportation, Storage and Telecommunication | 6.0 |
| Food Industry | 4.0 |
| Metal, Machinery and Electronic Industry | 1.8 |
| Electricity, Gas, and Water Supply | 1.7 |
Source: Indonesia Investment Coordinating Board (BKPM)
The BKPM aims for investment realization of IDR 390.3 trillion (USD $40.2 billion) in 2013, an increase of 24.6 percent compared to the investment realization in 2012.
¹ Penanaman Modal Dalam Negeri
² Penanaman Modal Asing