Jakarta. Foreign direct investment in Indonesia fell in the first quarter of this year, forcing the government to consider the possibility of missing its investment targets this year as projects are delayed by the coronavirus crisis, the government's top investment official said on Monday.
Foreign investors brought in only Rp 98 trillion ($6.3 billion) in investment from January to March, down 9.2 percent from Rp 108 trillion in the same period last year.
Domestic investors, on the other hand, forked out Rp 113 trillion in the same period, up 29 percent on an annual basis.
While none of the investors has canceled their investment, the Investment Coordinating Board (BKPM) expects investment realization to drop by 7.8 percent to Rp 817 trillion from its initial target of Rp 886 trillion if the pandemic continues beyond May.
"Investment in the second quarter will drop because the situation in April–May will be challenging," BKPM Head Bahlil Lahadalia said on Monday.
Greater Jakarta, which accounts for a lion's share of the country's economy, has implemented large-scale social restriction (PSBB) for almost two weeks.
Under the restriction, the provincial government forbids companies in non-essential sectors from opening up shops and ordered their workers to work from home.
Indonesia has also closed its borders to most foreigners, barring key workers in foreign investment projects from entering the country.
"If the pandemic continues beyond May, we have to be realistic and make corrections on our Rp 817 trillion investment realization target," Bahlil said.
The largest economy in Southeast Asia booked foreign and domestic investments of around Rp 810 trillion last year, data from the BKPM showed.
Foreign direct investment was at $28 billion last year, down 3.7 percent from $29 billion in 2018.
The BKPM figure excludes investments in oil and gas, finance and banking sectors.
Still, Bahlil said so far no foreign investors has backed off from their investment commitment in Indonesia.
"We've video called them one by one. No one has canceled their investments in Indonesia. But there have been some slight project delays," Bahlil said.
For example, the groundbreaking $2.8 billion Tanjung Jati A power plant in West Java, backed by Bakrie Power and Malaysian YTL Corporation, has had to be postponed by two months to May, Bahlil said.
Bahlil said the BKPM would continue to work with local governments to find a way to allow investment projects – especially in the mining, infrastructure and plantation sectors – to continue running under strict social restrictions.
"The projects could continue by observing the PSBB restrictions, such as wearing masks at all times for the workers," Bahlil said.