Indonesia's foreign direct investment is set to rebound 15 percent in 2010 on a global economic recovery after dropping 28 percent this year to just below $10 billion, the state investment agency (BKPM) said. Policy makers in Southeast Asia's biggest economy are struggling to attract more foreign investment to speed up economic growth and make inroads into unemployment and poverty.
"The drop in (realised) foreign direct investment was mostly due to the fallout of the global economic downturn," BKPM chairman Gita Wirjawan said. Domestic investment in 2010 was also expected to rise 15 percent in 2010 on top of an estimated 120 percent jump this year, he added. "As for realised domestic investment, it was more than 30 trillion rupiah ($3.16 billion) this year," said Wirjawan adding that domestic investors were more upbeat on Indonesia's economic outlook than their foreign counterparts.
Indonesia has failed to match the levels of direct foreign investment attracted into regional powerhouses such as China and India. Foreign investors are often put off directly investing in Indonesia because of factors such as red tape, rampant corruption and a shaky legal system.