Foreign investment set to fall<\/p>\n
JAKARTA (JP): State Minister of Investment Sanyoto
\nSastrowardoyo projected here yesterday that foreign investment
\napprovals are likely to drop by 30 percent to US$27 billion this
\nyear from $39.9 billion in 1995.<\/p>\n
\"The value of foreign investment approvals will decline this
\nyear but in term of the number of approved projects, there will
\nbe more than last year,\" he told the media following a hearing
\nbetween his office and the House of Representatives' Commission
\non the state budget.<\/p>\n
He said that the projected sharp drop in the value of foreign
\ninvestment approvals this year will not be caused by a decline in
\nforeign confidence in the Indonesian business climate but due to
\nthe fact that most of the approved projects require small and
\nmedium-scale investments.<\/p>\n
\"Last year, the value of foreign investment approvals was very
\nhigh because eight of the approved projects were very large,\" he
\nsaid.<\/p>\n
Foreign investment approvals rose by nearly 70 percent to
\n$39.9 billion last year from $23.72 billion in 1994. Last year's
\nsurge was mainly due to large oil refinery and power generation
\nprojects.<\/p>\n
Sanyoto said that the eight oil refinery and power generation
\nprojects alone were projected to require $12.9 billion in
\ninvestment, accounting for around 30 percent of last year's total
\ninvestment approvals.<\/p>\n
He told the hearing that in the period between January and
\nSept. 15, foreign investment approvals reached $24.61 billion,<\/p>\n
\"We are optimistic that the total value will reach $27 billion
\nby the end of this year,\" he said.<\/p>\n
Domestic<\/p>\n
But domestic investment approvals showed a healthier
\nperformance in the first eight and a half months of this year.
\nTheir value already exceeded last year's total approvals by
\nnearly 20 percent at Rp 82.50 trillion, he said.<\/p>\n
Sanyoto said that like in the previous years, the projects
\napproved both under domestic and foreign investment schemes last
\nyear were mostly in the manufacturing sector.<\/p>\n
The realization of foreign investment projects in the period
\nbetween 1967 to Sept. 15, 1996, reached $43.35 billion or around
\n50 percent of the total cumulative value of the approved foreign
\ninvestment projects.<\/p>\n
In terms of the number of projects, the realization rate was
\nmuch higher, reaching 72.37 percent of the approved investments.<\/p>\n
In the domestic investment schemes, the realization of
\nprojects in the period between 1967 and Sept. 15, 1996 totaled Rp
\n137.15 trillion, around 47 percent. In terms of the number of the
\nprojects, the realization rate was 72.26 percent over the same
\nperiod.<\/p>\n
The realization rate of investment projects is calculated on
\nthe assumption that the project is carried out no more than two
\nyears after the approval.<\/p>\n
In the first two years of the current sixth five-year
\ndevelopment plan, which began in April 1994, the realization of
\ndomestic investment projects reached Rp 56.59 trillion.<\/p>\n
If the realization of the foreign investments is calculated in
\nrupiah, the total investment realization in the period between
\nApril 1, 1994 and Sept. 15, 1996, was Rp 98.89 trillion or around
\n44 percent of the total investments of Rp 224.7 trillion expected
\nto come from private direct investments in the current five-year
\ndevelopment plan period.<\/p>\n
Indonesia needs an investment of at least Rp 815.3 trillion to
\nachieve an average economic growth rate of 7.1 percent per annum
\nin the sixth five year development plan period. Of the total, Rp
\n224.7 trillion was foreseen to come from direct investments, both
\ndomestic and foreign.<\/p>\n
\"We are optimistic that we will achieve the target before the
\nfive-year development plan ends in March 1999,\" he told the
\ncommission members. (hen)<\/p>",
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