Indonesia Focuses Investment in Three Sectors

VIVAnews - The roadmap of Indonesian Capital Investment in 2009 launched by the Capital Investment Coordinating Agency (BKPM) is focused on three sectors: food, energy and infrastructure.

The decision to focus on the three sectors put the global economic progress as well as future economic direction into consideration. However, an economist at the Institute for Development of Economics and Finance (INDEF) Fadhil Hasan said on Tuesday, Jan. 27, that he was concerned that the decision would disregard other factors. "It is apparent that the focus is related to the Indonesian geographic conditions as well as natural potentials," said Hasan on Tuesday, Jan. 27.

BKPM Head M Luthfi stated that the said factors are crucial to modify the Indonesian mindset. "We are known for selling raw materials. This must be modified. We are trying to release intermediate goods," he said. 

Lutfhi stressed that Indonesia will not improve if it continues to sell only raw materials. There will be an image that the country affords no attempts in eradicating poverty. "Say, we sell gas at US$4. If it is utilized for making fertilizer, the coefficient times four. Iron would have eight as its coefficient. But we have only released raw materials. We gained nothing from that gas," he said.

The low Indonesian value-added can be seen from the electricity supply per capita. Indonesia averagely consumes 487 KWh per capita while ASEAN uses up 1343 KWh per capita.

According to Luthfi, a study conducted in Philippines showed that non-electric mobile industries require US$2 per KWh. If they use electricity, they may complete work which equals cost of six cents per KWh. It is concluded that the low electricity consumption in Indonesia has resulted in quite large costs.

Translated by: Bonardo Maulana Wahono