BALANCE OF PAYMENTS

and FOREIGN DIRECT

INVESTMENT IN INDONESIA
Nahdy Niza Mustafa
1312000214

INDONESIA BALANCE OF
PAYMENTS CONCEPTUAL
FRAMEWORK
DEFINITION
Balance of payments is a summary of statements or statements
which basically say all transactions made by a resident of a country
with residents of other countries and all of them are recorded in a
certain period, usually a calendar year. (Salvatore, 1997: 67)
Balance of payments is a systematic document of all economic
transactions between residents of a country with the population of
another country within a specified period, usually one year. (Apridar,
2009: 135)
Sukirno (2004: 390), defines the balance of payments as a financial
flow records that show the value of trade transactions and the flow
was conducted among a country with other countries in a given year.

From the various definitions above, it can be concluded that the

balance of payments is a systematic record that includes
international transactions of a country with the population of another
country in a given period is usually one year.

The purpose of the Balance of

Payments
Preparation of the balance of payments has
several objectives, including the following:
As the material information to the
government about the international position
of the country concerned.
As the material for the government to make
decisions in the field of trade policies,
payments affairs.
As the material to assist the government in
making decisions in the field of monetary and
fiscal policy.

The function of the balance of

payments
As an accounting tool and means of payment

abroad for the government to take a decision,

whether the state can resume the entry of foreign
goods and be able to complete the payment on
time.
As a tool to explain the influence and abroad
transaction on national income.
As a tool to measure the state of the economy in
international relations of a country.
As a tool of monetary policy which will be
implemented by a country.

International
Economic trades
International economic transactions according Reksoprayitno

(1995: 56), is an economic transaction conducted by a resident of

a country that has a balance of international payments. Just like
the other balance-sheet and in accordance with accounting
principles generally, the balance of payments records
transactions plus and minus. The plus transaction is called a
credit transaction (credit), whereas the minus transaction called
debit transactions (debit).
In the balance of payments, which contains posts debit
transactions are usually marked with a sign (-). While the credit
transaction occurs when a transaction creates or lead to
increased rights for residents of other countries or result in
reduced liability for the residents of the country's balance of
payments to hold payments to residents of other countries, this
transaction is usually marked with a plus sign (+).

CONCEPT OF TRANSACTION
In general, economic transactions are included
in the balance of payments can be divided
into two groups:
(1) Goods, services, revenue (income) and
current transfer;
(2) Capital / financial
Transactions within the group (1) are part of the
current account, while transactions in the
group (2) are part of the capital and financial
accounts.

CONCEPT OF
TRANSACTION
Recording Transaction Period
Dual Entry System
Errors and Omissions
Transaction valuation
Calculation and Conversion Unit

CONCEPT OF RESIDENCY /
POPULATION
In the balance of payments statistics, the
population of Indonesia is composed of:
(1) Government agencies
(2) The financial institution and non-financial
institution which includes all companies involved
in the production of commercial goods and
services in the territory of Indonesia.
(3) Non-profit organizations
(4) Households and individuals, that all the people
living in the territory of Indonesia for one year or
more and the center of economic interests in
Indonesia.

CLASSIFICATION STANDARD
BALANCE OF PAYMENTS
Classification standard balance of payments consists of
two main groups of the balance sheet:
Current account and
Capital and financial accounts.
Transactions are classified into current account consists
of goods and services , revenue (income) and current
transfers.
Transactions are classified into capital account consists
of capital transfer transactions (capital transfers) and
net acquisition or disposal of non-renewable nonfinancial assets (acquisition or disposal of nonproduced, non-financial assets).

BALANCE OF PAYMENTS
INDONESIA PRESENTATION
FORMAT
Indonesia's Balance of Payments: Summary
Indonesias Balance of Payments: Current

Account
Indonesia Balance of Payments: Capital and
Financial
Indonesia Balance of Payments: Government
Sector and the Monetary Authority Financial
Transactions
Indonesia Balance of Payments: Private Sector
Financial Transaction

Indonesia's Balance of Payments: Summary

Indonesias Balance of Payments: Current Account (Goods)

Indonesias Balance of Payments: Current Account (Services)

Indonesias Balance of Payments: Current Account (Income)

Indonesia Balance of
Payments: Capital and
Financial

Indonesia Balance of Payments: Government Sector and the Monetary Authority Financial
Transactions

Indonesia Balance of Payments: Private Sector Financial Transaction

DIRECT INVESTMENT (Foreign

Direct Investment)
International/Foreign direct investment is an investment

made by a resident of a country (shareholders / direct

investor) in an investment company directly (direct
investment enterprise) in other countries for the long term.
Direct Investment Company is a company incorporation
(incorporated) or non-incorporation (unincorporated) which
is 10% or more of its shares (or equivalent for nonincorporation) is owned by foreign shareholders. The
company consists of: subsidiary (subsidiary, shareholders
owning more than 50% of shares), associations (associate,
shareholders have between 10% to 50% of the shares),
and branch (branch, the company non-incorporation).

Examples of Direct Investment

Relationships

CLASSIFICATION
The main classification of direct investment is

based on the direction of investment. Direct

investment made by Indonesian people abroad
called direct investment abroad (direct
investment abroad or outward direct
investment) and investments made by direct
investors abroad on companies in Indonesia
called direct investment in Indonesia (direct
investment in Indonesia [or commonly known
as the Foreign Direct investment - FDI] or
inward direct investment).

Sectors that can not be entered by

FDI
Business sectors closed to foreign investment in full control are
areas that are important for the state and serving the public,
according to Article 6 UPMA is as follows:
Ports
Production, transmission and distribution of Electricity to the
public
Telecommunication
Cruise
Flight
Water provider
Public rail
Atomic power plant
Mass media.

Indonesias Direct Investment Data

(1) Internal Data Bank Indonesia include:
(a) Report of Foreign Exchange for Direct Investment Abroad transaction
data;
(b) Commercial Bank Monthly Report for data transactions and equity capital
direct investment position in Indonesia's banking sector;
(c) Report Information System External Debt (whistle) to the data of foreign
debt between affiliated companies; and
(d) the results of the survey direct investment in equity capital position data;
(2) BP Migas, to the data of direct investment in the oil and gas sector;
(3) Ministry of State Enterprises, for data privatization;
(4) Asset Management Company (PPA), for data privatization or other

state assets, and

(5) The National Committee for the Acceleration of Infrastructure
Provision (KKPPI), the data related to the investment in the infrastructure
sector.

Investment Realization
Progress Quarter I 2015

Investment Realization in
Quarter I 2015 Compared
to The Same Periodin2014:
DDI and FDI; Java and
Outside Java

Economic
Corridor

Investment Realization in Quarter I

2015: Based on Sector

Investment Realization in Quarter I 2015:

Based on Location

Investment Realization in Quarter I

2015: Based on Country of Origin

Indonesian Labor Absorption Progress 2010March 2015: Per Quarter

Progress of Investment Realization 2010March 2015: Per Quarter

THANK YOU FOR

YOUR ATTENTION!