TEMPO.CO, Jakarta – University of Indonesia senior economist, Faisal Basri, saw the government misguided in dealing with investment problems in Indonesia. Because the main investment problem is not the achievement, but the impact resulting from the realization of incoming capital.
“There is something wrong in this Republic. Not only in the era sir Jokowi (President Joko Widodo). Pak Jokowi will continue or fail to reverse economic fortunes because of a misdiagnosis. There is a lot of investment, but the results are low,” said Faisal in a discussion with the Labor Party, Thursday, January 6, 2022.
Faisal said the government formulated the Job Creation Act to boost investment. In fact, according to him, the flow of capital into the country is already high. In 2015, investment in Indonesia reached its peak, reaching 32.8 percent of gross domestic product (GDP).
Compared to other countries such as Thailand, the Philippines, even India, investation in the country, including the highest after China. The data cites the World Development Indicators made by the World Bank.
Meanwhile, according to the 2021 World Investment Report United Nations Conference on Trade and Development (UNCTAD), Indonesia’s investment ranking is in the top 17 in the world, surpassing France, Vietnam and Japan. Indonesia is only one level below the UK and two levels below the United Arab Emirates.
However, high investment is not able to encourage the Indonesian economy to soar. Indonesia’s economic growth continued to sag until it reached a point below 5 percent after the Covid-19 pandemic.
According to Faisal, this condition is caused by the non-maximum absorption of investment. “There was a misdirection, high cost economyAll (investments) are given to SOEs, there is no competition, corruption, and so on,” said Faisal.
Faisal continued, in 2022, Indonesia must improve. In addition to optimizing investment, the state needs to improve key weak sectors such as finance. The financial sector should also be seen as the main heart of the Indonesian economy.
“The industry will not stretch if bank credit is only 38 percent of GDP. Look at China and other Asian countries, (credit grew) above 100 percent,” said Faisal Basri.
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