Foreign Investment in Central Java Misses Target

TEMPO.CO, Jakarta - The realization of foreign investment in Central Java has missed the target set by the local government. Sujarwanto Dwiatmoko, the head of Central Java Regional Domestic Investment Agency (BPMD), said on Sunday, March 22, 2015 that domestic investors still dominated the investment in the province.

Sujarwanto explained that Central Java had managed to realize Rp21 trillion (US$1.6 billion) worth of investments from the target of Rp23 trillion (US$1.77 billion) set in the General Guidelines for Investment (RUPM). Meanwhile, the realization of foreign investment (PMA) reached Rp6.5 trillion (US$500 million), although the principal business permit for foreign investment was set at Rp100 trillion (US$7.7 billion).

Sujarwanto admitted that Central Java could not make foreign investment work. Therefore, the provincial government continued to formulate a strategy to attract foreign investors to do business in 35 regencies/cities in Central Java.

Frans Kongi, the chairman of the Central Java branch of the Indonesian Employers Association (Apindo), said that foreign investors have yet shown interests in doing business in Central Java. According to Frans, foreign investors were concerned with certain issues, such as land acquisition, infrastructures and electricity rate.

Frans added, the wage and compensation payment system in Indonesia frequently causes problems. Business owners suggested the government to calculate wage based on productivity.

ROFIUDDIN