* Wants to encourage FDI in manufacturing to cut reliance on
* Sees 15 pct growth in FDI this year, up to 18 pct in 2015
* To recommend tax incentives for renewable energy sector
* Aims to set up "one stop unit" to cut bureaucracy
By Eveline Danubrata and Michael Taylor
JAKARTA, Sept 2 Indonesia's investment authority
wants to attract more foreign investment into manufacturing and
other value-added industries to wean the economy off the
volatile resources sector, its chairman said.
A series of rules introduced this year that are aimed at
giving the government more revenues from Indonesia's key
resource sector have deterred foreign direct investment, as has
political uncertainty as Indonesians voted for a new president,
who is due to take office in October.
Mahendra Siregar, chairman of the Indonesia Investment
Coordinating Board, told Reuters he expects foreign direct
investment to grow 15 percent this year and around 18 percent in
2015, a slowdown from the 22 percent growth in 2013.
Siregar said he expected some of this investment to come
from companies in the consumer and manufacturing sectors in
several countries including Japan, South Korea and China as they
had expressed interest in investing in Southeast Asia's largest
He declined to give details. Companies that have so far
announced plans to invest in Indonesia include Samsung
Electronics Co Ltd, Philippine fast food chain
Jollibee Foods Corp and Thai green tea maker Ichitan
Taiwan's Foxconn Technology Group, a major
supplier for Apple Inc, is also considering a $1
billion manufacturing project in Indonesia.
"There's no sustainability (in FDI flow) if we have to, on
and on again, face the boom-and-bust growth of the resources or
commodities sector," Siregar said.
"That's why for us, it's important to see value-added
processing activities also taking place in Indonesia," he added.
Investor sentiment has since improved after Jakarta governor
Joko Widodo was elected president, but FDI growth is likely to
pick up slowly as the current parliament and the government will
remain seated until October, when Widodo's new administration
Siregar said the investment board would recommend to the new
government introducing tax incentives for foreign investors to
develop new sources of energy such as geothermal, hydropower and
biofuels due to the high costs.
It will also propose setting up a "one stop unit" to reduce
overlapping bureaucracy and cut the time it takes to get an
investment permit to 4 months from more than a year now, he
($1 = 11,730.00 rupiah)
(Reporting by Eveline Danubrata and Michael Taylor in JAKARTA;
Additional reporting by Neil Jerome Morales in MANILA, Aradhana
Aravindan in SINGAPORE and Khettiya Jittapong in BANGKOK;
Editing by Miral Fahmy)