The Aceh Investment and Promotion Board hopes investors will explore investment opportunities and do business in the province, given the current conducive situation and improving political condition.
“We’ve ensured that Aceh is making efforts to enhance its capacity in welcoming foreign and domestic investors,” said the board’s chairman Iskandar.
According to Iskandar, his board has made several efforts to draw investors to Aceh, such as improving human resources, licensing procedures, investment cooperation, regulation and promotion.
He acknowledged Aceh’s economy was still driven by state and provincial budgets, although the peace and reconstruction process in the province was now almost 10 years in the making.
Apart from the state and provincial budgets, consumption was also factor that had pushed current economic growth.
“That’s why we’re trying to invite investors to explore business opportunities that can be created from other sectors,” said Iskandar.
The board’s data showed planned investment in Aceh in the first quarter this year by foreign investors (PMA) was valued at Rp 115.04 billlion (US$11.83 million), with domestic investors (PMDN) valued at Rp 4.66 trillion.
Meanwhile, the realized investment was Rp 281.25 billion of PMA and Rp 1.73 trillion of PMDN for a total investment of Rp 2.01 trillion.
“This shows that there is currently a rise in investment value in Aceh, especially from PMDNs,” said Iskandar.
Most PMA is interested in the mining, plantation, fisheries, power and gas, trade and repair sectors. The largest investing countries are Malaysia, South Korea, the US, the UK and India.
Meanwhile, most PMDN is interested in the power and gas, food crops and plantations, trade and reparations, services, transportation and storage sectors.
“Aceh has much potential and advantages to offer to investors given its geographical location and its special status. Aceh can set its own regulations, especially in terms of inviting foreign investors without the involvement of the central government,” said Iskandar.
Although the Aceh provincial administration has made strenuous efforts to lure investors to do business in Aceh, investors sometimes face difficulties realizing their investments, which has in turn served to create a reluctance on their part to invest in Aceh.
“One of the most serious drawbacks is the political atmosphere in Aceh, which is unstable, discouraging investors to invest,” said Oki Kurniawan, a representative of PT Lhoong Setia Mining.
According to Oki, his company, which had put in more than Rp 100 billion, was yet to operate due to the confusing regulation process and bureaucracy, which did not help prospective investors.
“The biggest asset of investment is trust, without which it is impossible for people to invest in Aceh,” said Oki.
Source: Hotli Simanjuntak, The Jakarta Post