By Aditya Suharmoko
JAKARTA, Oct 31 (Reuters) – Indonesia reported a 13.6 percent jump in foreign direct investment in the third quarter of 2010, putting it on course for record full-year foreign investment.
Third-quarter foreign investment was 40.1 trillion rupiah ($4.49 billion), taking the total for the first nine months to 111.1 trillion, the country’s investment board, known as BKPM, told a news conference.
“We aim to reach 130 trillion rupiah in foreign investment in 2010. We see the trend is rising,” said M. Yusan, deputy director at the BKPM.
In the first quarter Indonesia received 35.4 trillion rupiah in foreign investment, and in the second quarter it rose to 35.6 trillion. That means full-year investment is set to be well above the 130 trillion target in 2010 if the trend continues.
Foreign direct investment was 100 trillion rupiah in 2007 and 133 trillion in 2008, before dropping to 100 trillion in 2009 as a result of the global financial crisis.
Third-quarter foreign investment was strongest in the housing, mining, transportation, telecommunications, foods and agricultural crops sectors, Yusan said.
Indonesia, southeast Asia’s largest nation, has been a hot destination among portfolio investors in the past 18 months due to its resilient economic growth and increased political stability, but in recent years it has lagged neighbours in attracting FDI.
Higher FDI would help stabilise the nation’s long-term finances and improve its chances of getting an investment grade sovereign rating, a status that would put it on par with BRIC nations such as Brazil and lower government borrowing costs.
In the third quarter this year, Britain (which according to the BKPM definition includes the British Virgin Islands), Singapore and Malaysia were the top three countries investing in Indonesia. The top destination was Banten, followed by Jakarta and West Java.
Indonesia expects total investment of up to 550 trillion rupiah in 2014, supported by infrastructure projects from public-private partnerships.
Indonesia’s finance minister Agus Martowardojo told Reuters last month the government can only fund 35 percent of $140 billion of infrastructure needs in the next five years, leaving it reliant for two-thirds on public-private partnerships.
($1=8935 Rupiah) (Reporting by Adriana Nina Kusuma and Aditya Suharmoko; Editing by Andrew Marshall)
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