Dec. 05–The Investment Coordinating Board (BKPM) says Indonesia remains attractive for foreign investors and is maintaining an optimistic investment outlook for next year, eyeing tourism as the key contributor to investment growth.
BKPM chief Thomas Lembong said his office was confident that the realized investment target of Rp 592 trillion (US$43.97 billion) would be met this year, and therefore a larger goal could be set for 2017.
He added that one of the major sectors expected to boost cash inflows was tourism as reportedly, foreign investors had expressed the most interest in tapping into Indonesia's underdeveloped yet promising tourism sector.
"Luckily, it [tourism] shined in the eyes of several investors who came to Jakarta for the Forbes Global Conference," Thomas recently said.
Indonesia, the world's biggest archipelago with more than 17,000 islands, is seeking to spur significant growth in the tourism sector in a bid to lure 20 million tourists a year by 2019, nearly double the current figure of around 12 million per year.
To lure people, particularly those who only holiday on the world's most visited island of Bali, to other scenic spots, the government is working on developing 10 other destinations, including Lake Toba in North Sumatra, Borobudur Temple in Central Java and Thousands Islands in Jakarta.
The World Bank's latest Indonesia Economic Quarterly Report declared that tourism was a promising field that could generate significant private investment for the nation.
In the first half of this year, Indonesia received $858.7 million as investment poured into the sector.
Apart from tourism, other areas that BKPM will rely on to raise investment are the basic metal industry and petrochemicals, both of which form the backbone of domestic industry, Thomas said.
According to Thomas, BKPM may roll out new measures to lure more investment in the near future, but no details could be disclosed as plans were still being discussed with offices of coordinating ministers and the Presidential Office.
"From the BKPM's side, what we can do is sort out issues relating to regional administrations. I have already spoken to the Home Ministry, which holds power over the regional bodies, so that the BKPM's technical requests can be fulfilled in order to boost investment in those areas," he said.
In the past two years, the investment body has launched several initiatives to improve its service to potential investors, most notably one-stop integrated service centers to ease the process of applying for a business permit.
Around Rp 453 trillion in investment has been realized in Southeast Asia's largest economy from January to September, up 13.4 percent from 2015.
The figure consists of Rp 295 trillion of foreign investment and Rp 158 trillion in domestic investment, increases of 10.6 percent and 18.8 percent, respectively, from the past year.
Another sector that can help attract investment and will be looked at after the next year is the creative economy industry, which Creative Economy Agency chairman Triawan Munaf called an excellent contributor to Indonesia's gross domestic product (GDP) growth.
One particular aspect of the creative economy that will be focused on is the increasing number of cinemas in Indonesia, he said. "It remains a lucrative part of the creative economy, the prevalence of cinemas boosts the film industry as well," Triawan said.
Previously, the head commissioner of PT Graha Layar Prima, Bratanata Perdana said that his company was targeting to open eight new cinemas in the near future, a plan that requires Rp 150 billion to Rp 200 billion.
Graha Layar Prima is the operator of a number of CGV Blitz cinemas scattered nationwide.
Early this year, the government scrapped the film industry from the negative investment list, paving the way for new foreign investment.
Thomas also added that the culinary and fashion sectors, which are parts of the creative economy, were also formidable factors in propping up exports and imports and thereby potentially increasing investment opportunities.