UPDATE 1-Indonesia to offer $19 billion projects - president

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By Muhamad Al Azhari and Adriana Nina Kusuma

JAKARTA May 26 (Reuters) - Indonesia will offer projects worth about $19 billion, mostly in the infrastructure sector, to investors soon, President Susilo Bambang Yudhoyono said on Monday.

Southeast Asia's biggest economy badly needs investment, especially in infrastructure, to help boost growth and reduce unemployment, but has been struggling to do so amid a weak regulatory environment.

Yudhoyono told a regional investment forum his administration is taking measures to boost investor confidence such as fighting graft and reducing regulatory uncertainty resulting from the country's decentralisation drive.

"Legal certainty is vital to investors, that is why we are actively synchronising local and national policy to ensure that local regulations do not contradict national regulations," Yudhoyono told around 300 investors at the two-day meeting that began on Monday.

During the meeting, the government plans to offer 200 projects in sectors such as infrastructure, mining and tourism in the vast archipelago with a population of about 226 million.

The projects include an $81,000 cattle breeding project in Central Sulawesi province, a $4 billion oil refinery project in Banten province, a $27 million artificial lake in Riau province and a $204 million geothermal power plant in Central Java.

Actual foreign direct investment (FDI) and domestic investments rose significantly last year on the back of political stability and an improving economic outlook.

Actual FDI rose 73 percent to $10.3 billion last year while domestic investment climbed almost 70 percent to 34.9 trillion rupiah.

Indonesia's total foreign and domestic investment rose by around 80 percent in the first quarter from the year-ago period because of strong investment in the telecoms and pulp and paper sectors, the state investment agency (BKPM) said.

Foreign direct investment in January-April stood at $9.94 billion.

Yudhoyono said his administration would continue its fight against graft, one of his key election promises.

"I remind every single local official out there that any corruption on your part will ultimately cost you dearly. Investors have lots of choices in today's global economy. If they feel they are being mistreated, they will take their money elsewhere," Yudhoyono said.

Indonesia has been consistently rated as one of the most corrupt countries in the world by independent corruption watchdogs.

The government has projected Indonesia's economy will grow by close to 7 percent in 2009 compared to this year's 6.4 percent growth forecast in the state budget. (Additional reporting by Telly Nathalia and Tyagita Silka, writing by Andreas Ismar, editing by Sugita Katyal)