Prabowo Camp: 1998 Crisis May Recur as Foreign Investment Rising

TEMPO.CO, Jakarta - The economy division member of the Prabowo - Sandiaga campaign team, Anthony Budiawan, criticized the high figure of foreign direct investment (FDI) in Indonesia compared to that of domestic investment.

“If FDI increases, our economy will become more dependent, it will be worse. It’s just a matter of time the 1998 economic crisis to recur,” said Anthony in Millennium Sirih Hotel, Jakarta, on Wednesday, April 10.

According to Anthony, the government was presently encouraging foreign investment entering the country because of further loss in the current account deficit, while domestic investment was not optimally managed.

Reflecting from 2018, Anthony added, Indonesia’s current account deficit reached 2.98 percent, nearly hit the 3 percent threshold. The issue was compensated by the influx of foreign capital, especially portfolio. “Otherwise, rupiah will depreciate.”

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However, in line with the influx of foreign capital, the outflow of funds to overseas also jumped for primary income payment, from US$12.85 billion to US$39.84 billion. “That are profits, dividends, and others surge three folds and caused a higher deficit.”

So he said the economy control from domestic investor must be strengthened to substitute foreign direct investment. “The FDI has become an economic burden,” he added, mentioning the percentage of FDI against domestic investment was 68.84 percent and 31.14 percent respectively.

Earlier, the Capital Investment Coordinating Board (BKPM) head Thomas Lembong said that the total investment in Indonesia amounted to Rp720 trillion in 2018 which 55-60 percent of them was the foreign investment.

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