Indonesia drafting new investment law<\/p>\n
JAKARTA (JP): State Minister for Investment Sanyoto
\nSastrowardoyo said yesterday that the government is drafting a
\nnew investment law in line with the principles of the World Trade
\nOrganization (WTO).<\/p>\n
He said that the planned law will administer both domestic and
\nforeign investment activities, which are currently regulated by
\ntwo different laws.<\/p>\n
"The draft is being processed and hopefully it could be
\nsubmitted to the House of Representatives (DPR) for deliberations
\nnext year," he told newsmen after delivering his speech at the
\nIndonesia Summit, a two-day international seminar on the
\nIndonesian economy.<\/p>\n
Sanyoto said that the planned investment law will cover only
\ndirect investments because investments made through capital
\nmarkets or so-called portfolio investments will still be
\nregulated by different rules.<\/p>\n
"The foreign investment ceiling in companies on stock
\nexchanges will, therefore, stay at the current level of 49
\npercent even though in direct investments, foreigners are already
\nallowed to have up to 100 percent of companies' shares," he said.<\/p>\n
Sanyoto said that the government is also embarking on tougher
\naction to improve the realization of plans on new investment
\nprojects.<\/p>\n
He said that his office has instructed all provincial
\ninvestment offices to improve their monitoring of new investment
\nactivities in their provinces.<\/p>\n
"If investors are not serious enough, or they do not carry out
\ntheir projects after three years of government approvals, their
\nlicenses will be immediately revoked," he said.<\/p>\n
He said that the stricter action is expected to further boost
\nthe realization rate of investment projects, which at present is
\n74.4 percent for domestic and 72 percent for foreign investment
\nprojects.<\/p>\n
At yesterday's meeting, attended by around 600 executives of
\ndomestic and foreign companies, Sanyoto also pledged to further
\nimprove the business climate in order to attract more foreign and
\ndomestic investors to the country.<\/p>\n
He said a series of deregulation measures introduced by the
\ngovernment in the past years have brought extremely positive
\nresults in the inflows of foreign direct investments.<\/p>\n
The government's decision to allow 100 percent foreign
\nownership in industrial companies and up to 95 percent in public
\nutility projects had been positive to the business climate.<\/p>\n
"This measure is also attractive to small and medium scale
\ninvestors because there are no longer requirements on a minimum
\namount of investment and divestment," he told the summit, which
\nwill end today<\/p>\n
Earlier yesterday, Sanyoto told reporters after meeting with
\nPresident Soeharto at the latter's residence here that foreign
\ninvestment plans approved in the first four months of this year
\nreached US$17.9 billion, a 13.3 percent increase over the same
\nperiod of 1995.<\/p>\n
Sanyoto, who is also the chairman of the Investment
\nCoordinating Board (BKPM), explained that the foreign investments
\napproved in the January-April period were planned for the
\nestablishment of 427 projects, which indicated a 62 percent
\nincrease -- in terms of the project number -- from the
\ncorresponding period of last year.<\/p>\n
Meanwhile, the government also approved in the January-April
\nperiod a total of 356 domestic investment projects worth Rp 56.1
\ntrillion (approximately $24 billion), he said.<\/p>\n
In terms of the project number, the domestic investments
\nshowed an increase of 15 percent, while in terms of project value
\nthey indicated a 146 percent increase.<\/p>\n
The investment plans recorded by the Investment Coordinating
\nBoard are committed for non-oil and non-financial sectors.<\/p>\n
"I told President Soeharto about the progress of both domestic
\nand foreign investments. The value of domestic investment
\napprovals will likely exceed the foreign ones this year," Sanyoto
\nsaid.<\/p>\n
The government last year approved 775 domestic investment
\nprojects worth Rp 69.9 trillion, as compared to 823 projects
\nworth Rp 53.3 trillion in 1994. In 1995, foreign investment
\ncommitments reached $39.9 billion for 799 projects, as compared
\nto $23.7 billion for 449 projects in the previous year.<\/p>\n
"Japan will remain the top foreign investor in Indonesia in
\n1996," Sanyoto said. "Since 1967 up to May 4 this year, Japanese
\ninvestment commitments were $31 billion. Britain replaced Hong
\nKong as the second largest investor with total investments of $23
\nbillion."<\/p>\n
He said that Singapore, with total investments of $16.4
\nbillion as of May 4, may surpasses Hong Kong -- whose investments
\nreached $18 billion -- as the third largest investor this year.<\/p>\n
He said the United States now ranked eighth with its 236
\nprojects worth $12.1 billion as of May 4.<\/p>\n
Sanyoto said that he also reported to the President about his
\nplanned trips to South Korea, Hong Kong, Italy and Australia to
\npromote investment in Indonesia. (hen\/icn)<\/p>",
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"sponsor": "Okusi Associates",
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