Indonesia’s Breakthrough Year for Foreign Investment in 2022
The amount of foreign investment in Indonesia reached US$43 billion in 2022, a record high for the nation and a rise of 44% from 2021. The primary force behind this was the metal mining sector, which is how the Indonesian government hopes to expand its downstream capacities, especially for nickel.
The Indonesian Investment Coordinating Board, or the BKPM, recently published data showing that in 2022, the country received US$43 billion in foreign investment, a record high and an increase of 44% from 2021. Including domestic assets, Indonesia saw investments totaling 1,207 trillion rupiah (US$80 billion), up 34% from the previous year.
The mining and metals mining industries attracted more than US$16 billion in FDI to Indonesia in 2022, respectively.
The government anticipates 1,400 trillion rupiah in total international and domestic investments for 2023 and 1,650 trillion rupiah in total (US$108 billion) for 2024.
The top five sources of foreign investment in Indonesia are as follows:
Singapore – US$13.3 billion;
China – US$8.2 billion;
Hong Kong – US$5.5 billion;
Japan – US$3.6 billion; and
Malaysia – US$3.3 billion.
In 2022, the basic metal industry area in Indonesia attracted the most foreign investment. According to data from the BKPM, the industry received FDI worth US$11 billion in 2022, or about 24 percent of all FDI the nation received.
The nation wants to develop its downstream mineral industry, especially for nickel, by taking advantage of its wealth of mineral resources. The largest nickel reserves in the world, assessed at 22 million tons, are found in Indonesia, and the nation is using these reserves and other mineral resources to entice FDI for the construction of local smelters.
As a result, the export value of processed nickel increased considerably from just US$1 billion in 2015 to US$30 billion in 2022, making a significant contribution to government income.
One of the top industries where Indonesia is anticipated to see more foreign investment in 2023 is nickel extraction.
Batteries for electric vehicles (EVs) and stainless steel both heavily rely on nickel. By 2027, Indonesia hopes to become a major global EV manufacturing center and one of the top three EV and EV battery producers worldwide. Major EV manufacturers like Tesla and BYD from China have been courted by the government to start up shop there.
The government plans to continue banning the sale of more raw minerals, so FDI is anticipated to remain in the Indonesian metal mining sector.
The government anticipates that the prohibition on raw bauxite will go into effect in June 2023, with the hope that the state income from processed bauxite will rise from US$1.3 billion to US$4 billion. The government is also considering a prohibition on the exports of refined tin and copper ore. With one of the biggest copper reserves in the world, Indonesia is already the largest exporter of refined tin.
Why you report this article?
What do you think?
Give a comment