Eastern Indonesia 'New Magnet' for Foreign Investment: Economist

TheIndonesia.id - An economic expert has called the eastern part of Indonesia a “new magnet” for investment after the region scored an impressive investment realization in the first half of this year.

Dean of the Faculty of Economics and Business of the University of Indonesia Teguh Dartanto said eastern Indonesia has becoming more attractive for investors. As reported, in the first semester of 2022, investment realization outside the island of Java was Rp305.8 trillion (US$21 billion) and made up 52.3 percent of total investment.

Meanwhile, the investment in Java during the same period was recorded at Rp278.8 trillion or 47.7 percent from total investment.

“[Region] outside Java island has become a new investment magnet, especially foreign investment. This means there is a shift in which investors start to consider the region’s potentials, including economic potential,” Dartanto said on Friday, July 29, as reported by Antara.

He added that Maluku, Papua, and Sulawesi are particularly interesting for foreign investors, particularly for downstreaming projects.

The Indonesian government, on the other hand, has been particularly keen on promoting downstreaming since it wants to gradually stop the export of raw materials and massively start domestic processing to add value to commodities.

While the investment realization figure showed positive sign, Dartanto warned that the eastern region must have skilled human resources as well as proper supply chain network, so the investment can offer maximum benefits to the people.

“If [the potential] is not optimized, local governments won’t be able to benefit from the economic impacts. And it’s not impossible that a foreign investment in eastern Indonesia is supported by Java,” the economist explained.

Earlier this month, the Investment Coordinating Board (BKPM) reported that national investment realization in the first half of 2022 was Rp584.6 trillion, or equal to 48.7 percent from target set by President Joko Widodo at Rp1,200 trillion.