Investment in North Sumatra Not Optimal

Investment in North Sumatra Not Optimal

Capacity Building North Sumatra Invest, 8 Oktober 2019

06 January 2020 11:44 PM

Investment in North Sumatra has not been optimal and is not evenly seen, as of the second quarter of 2019 realization of FDI / DDI has only reached about one third of the target, even the investment level (ICOR) of 5.67 percent is quite high, which means that there are still inefficiencies in investing that need to be corrected.

That was said by the Head of Bank Indonesia (BI) North Sumatra Province Wiwiek Sisto Widayat at the "Capacity Building North Sumatra Invest 2019" event at the BI Office in Jalan Balai Kota Medan on Tuesday (8/10).

The North Sumatra Provincial Government (Pemprovsu) together with Bank Indonesia (BI) of North Sumatra Province carried out the 2019 North Sumatra Invest (NSI) capacity building in the North Sumatra BI Office Hall.

The Governor of North Sumatra, Edy Rahmayadi, was present as the keynote speaker. The other speaker was the Director of the BI Department of Foreign Affairs Ricky P. Ghozali, Head of Sub Directorate of Institutional Information Institutions, Regulation of the Directorate of Private Government Cooperation and Design and Development of Bappenas Reghi Perdana and Director of Regional Potential Development of the Investment Coordinating Board (BKPM) Iwan Suryana. The event was attended by representatives from 33 regencies / cities in North Sumatra.

Wiwiek said the realization of Foreign Investment (FDI) / Domestic Investment (DDI) in North Sumatra until the second quarter of 2019 had only reached one third (Rp11.48 trillion) from the 2019 target of Rp33.91 trillion. From the sectoral point of view, investment in foreign investment (FDI) with the highest realization was services reaching Rp901.76 billion, followed by electricity, gas and airways Rp478.91 billion and the food industry Rp367.09 billion. The lowest was the trade and repair sector Rp.214.86 billion.

Whereas Domestic Investment (DDI), the highest realization was in the transportation, warehouse and telecommunications sector IDR2,653 trillion, followed by plantations IDR1,701 trillion, food industry IDR1,552 trillion, construction IDR1,366 trillion and mining IDR350.74 billion.

"For that, North Sumatra's investment needs to be boosted even stronger in order to achieve the target," Wiwiek said.

Therefore, he explained, North Sumatra Invest (NSI) was formed based on the Governor of North Sumatra's Decree number 188.44 / 140 / KPTS / 2018 with the structure of the chairman of the North Sumatra Provincial Secretary and the deputy head of the North Sumatra Provincial BI Representative Head and the North Sumatra Provincial Kabiro Economic Secretary.

Wiwiek explained that the NSI was a cross-agency working team in North Sumatra with the aim of increasing North Sumatra investment through investment promotion activities in the context of improving the North Sumatra economy. NSI membership consists of agencies at the provincial and district / city levels.

"The capacity building of NSI 2019 is carried out so that NSI is more active in encouraging increased investment in North Sumatra," Wiwiek explained.

According to him, investment can sustain economic growth. Provinces with a greater investment composition in the economic structure can drive higher growth. The reality now is that North Sumatra is growing lower than South Sumatra, DKI Jakarta and Riau.

From 2019 data, North Sumatra's investment growth is only six percent, where last year it reached 11 to 12 percent. That is, something is wrong. "At the moment there are many potential investors who want to enter North Sumatra. They asked what North Sumatra could offer for them to invest. However, we do not have data, in the sense of what project data are ready to be financed by them, "he said.

With the existence of NSI, his party along with other stakeholders will collect all databases related to projects in North Sumatra. So if there are investors who come, there is already accurate data.

In the future three feasibility studies will be built namely blue book, green book and brown book. After this event, it is hoped that friends from the district / city will submit data on projects in their respective regions. So that information data can be collected and used to promote North Sumatra investments with the same data (accurately) through one door.

Head of the Investment Unit and One-Stop Integrated Licensing Services of North Sumatra Province, Arief S Trinugroho said, FDI / DDI North Sumatra was still concentrated in Medan City with the realization of the largest FDI per sector in the service sector reaching IDR902 billion and the largest PMDN per sector in the transportation, warehouse and telecommunications sector reached Rp2.65 trillion.

He added that the realization of foreign investment in the January to June 2019 period based on the country of origin in North Sumatra was dominated by Singapore, followed by South Korea, Malaysia, the Netherlands and Australia. Meanwhile, projects that are ready to be offered in North Sumatra include, Sei Mangkei Special Economic Zone (SEZ), Kuala Tanjung Industrial Zone, Lake Toba, Lau Simeme Multipurpose Dam, Trans Sumatra toll road and others.

He further said, the cooperation carried out in the NSI namely the Regional Investment Forum in Tangerang, Banten, Indonesia Investment Day in Singapore and the North Sumatra Province cooperation visit with the Government of Zhejiang.

The event ended with the signing of the NSI database by representatives of the district / city. (er)

Source: Click here

Start Invest in North Sumatra

Thousands of opportunities await, explore now to learn more.