Indonesian gov't prioritizes investment in three sectors

JAKARTA, Jan. 28 (Chinese media) -- Indonesian Investment Coordinating Board (BKPM) chairman M. Lutfi has said that the investment should be prioritized on medium and long-term projects in infrastructure, energy and food sectors amid the difficult times, the Jakarta Post reported on Wednesday.

BKPM believed that the three sectors are crucial for Indonesia's economy, because the infrastructure and energy sectors can both create multiplier economic effects, while the food sector has a great contribution to controlling the inflation rate.

According to BKPM, investing in food crops and plantations will remain lucrative as commodity prices are relatively stable, with a trend towards greater stability. Indonesia had 100.8 million hectares of land available for farming in 2007, more than 50 percent of its 188 million hectares total land area.

Meanwhile, Indonesia had 600 million ton of oil reserves or 0.4 percent of world's total, with a production capacity of 47.4 million tons annually. With sufficient investment to maximize the production, it will be enough to sustain domestic and international demand.

In regard to the infrastructure sector, the investment is still relatively low and badly needed to increase food production and energy exploration in Indonesia. BKPM said in the period of 2004-2005, the state budget only allocated 17 percent of the needed amount, which was 145 billion U.S. dollars.

Lutfi said Indonesian would see its investment grow between 10.7 percent and 11.2 percent this year amid global economic downturn, despite the 20.5 percent growth in 2008, when the country secured 20.36 trillion rupiahs (about 1.8 billion dollars) in domestic investment, down 41.6 percent year on year; and 14.87 billion dollars in foreign investment, up 43.8 percent year on year, respectively.