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Foreign Investment Decreased 30 Percent. Is This the Impact of the Global Economic Recession?

Tanjung Priok Port
Tanjung Priok Port

JAKARTA – The Investment Coordinating Board (BKPM) emphasized that the global economic crisis has caused foreign investment (PMA) globally to fall 30-40 percent.

BKPM’s Expert Staff for Increasing Investment Competitiveness, Heldy Satrya Putera. He explained that they felt the contraction to deepen after over 90 percent of the country experienced a crisis because of the Covid-19 pandemic.

Economic conditions in 2020 provide great uncertainty for investment because almost all countries are experiencing recessions. In fact, the recession that occurred due to the crisis in 2020 was the biggest since 149 years ago.

“The recession has started with a trade war, Britain is leaving Brexit, until the pandemic. The world contraction has caused FDI (foreign direct investment / PMA) to fall. He said in a webinar held by Katadata, Wednesday (4/11/2020).

Quoting World Bank data, Heldy said that economic conditions in 2020 provide great uncertainty for investment. Because almost all countries are experiencing recessions. In fact, the recession that occurred due to the crisis in 2020 was the biggest since 149 years ago.

According to him, from 1871 to 2020 the world experienced 14 crises. However, the impact of the crisis throughout 2020 caused the weakening of the economy to be felt. Evenly in almost all countries in the world.

ASEAN Still Growing In Global Economic Recession

ASEAN China Free Trade Area
ASEAN China Free Trade Area

Amid the weakening of global FDI Heldy said, investment in Asean is still growing in global economic recession compared to other countries. “Of the amount of incoming investment, Indonesia still dominates,” he said.

It reflects this condition in the realization of Indonesia’s FDI in the third quarter. Which rose 1.1 percent year on year. Cumulatively, investment realization in Indonesia for the January-September period was higher than last year.

In January-September 2020 investment realization in Indonesia recorded at Rp. 611.6 trillion. While last year’s Rp. 601.3 trillion. The realization of investment during this year consists of PMA IDR 301.7 trillion or 49.34 percent and domestic investment (PMDN) IDR 309.9 trillion or 50.7 percent.

The investment realization figure has met 74.8 percent of the 2020 target set at IDR 817.2 trillion. It claims the position of this investment to have absorbed a workforce of 861,581.

Also read other article about If Europe Lockdown Again, Indonesia Hopes It Won’t Interfere With Their Exports

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