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Could it be that Indonesia's investment problem also lies in
its statistics?
That's what the state investment board thinks, as it plans to revamp
the way it records the flow of investment into the country so as to
better reflect what is actually happening.
"The current system is inaccurate," Investment Coordinating Board
(BKPM) director M. Luthfi said Monday. "The data about actual, realized
investment, for example, refers to what happened 18 months, and
sometime even 36 months ago."
Luthfi said the government would now adopt a system of investment
statistics similar to that used in Singapore, in which the actual
expenditure of investors was updated on a near real-time basis.
"So, as soon as the investors get their approvals, we will immediately
record how much they spend on office space, on importing capital goods
and equipment, on building materials to set up their factories, and so
on," he said.
The figures for capital goods and equipment imports were particularly
important, Luthfi said, as they sometimes accounted for 80 percent of
an investment's value, and resulted in an actual trickle-down effect
that benefited the real sector.
"We've actually been recording and publishing this data, but now we
intend to improve the system," he said. The new system was expected to
be adopted this November, in tandem with the Central Statistics Agency
(BPS) and Bank Indonesia, both of which produce their own investment
statistics.
The BKPM publishes investment data on a monthly basis, although this
excludes statistics for the oil, gas and mining industries, the banking
and finance sector, and the capital markets, which are the
responsibilities of other government agencies.
The BKPM figures have differed in the past with those from BI, while
the BPS has come under closer public scrutiny following recent
questioning of its figures on the number of people living below the
poverty line.
Realized overseas investment in the first nine months to September fell
by 43 percent to only US$7.3 billion as compared to the same period
last year, while realized domestic investment grew by 4 percent to Rp
12.4 trillion ($1.3 billion).
In total, realized overseas and domestic investment up to the end of
September stood at Rp 51.89 trillion, down from Rp 84.5 trillion last
year, although the number of jobs that resulted increased from 228,549
to 197,643.
The BKPM's latest report also shows that the value of foreign
investment approvals is at a virtual standstill at $10.5 billion from a
year ago, although the value of domestic investment approvals nearly
tripled to Rp 107.9 trillion.
While a rise in investment approvals is positive in that it reflects
greater confidence in the country, it is the number of realized
investments that actually contributes to economic growth and creates
employment.
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