Megawati revives 13 'mega' projects worth $7.63 billion<\/p>\n
Fabiola Desy Unidjaja and Dadan Wijaksana, The Jakarta Post,
\nCikampek, West Java<\/p>\n
In a bid to show signs of reviving investor confidence in the
\ncountry, President Megawati Soekarnoputri officially recommenced
\non Wednesday 13 mega projects worth US$7.63 billion with the hope
\nthat these would serve as the engines of economic growth in the
\ncoming years.<\/p>\n
Megawati said she expected these projects would become a
\ncatalyst to lure more investments to help ignite the country's
\neconomy.<\/p>\n
\"Next month, 80 other projects will be renegotiated to
\nrecommence. All this should be able to get our economy on track,\"
\nMegawati said during a ground-breaking ceremony for the expansion
\nof PT Pupuk Kujang fertilizer plant in Cikampek, West Java.<\/p>\n
She also symbolically inaugurated 12 other projects in seven
\nprovinces, including in Aceh, East Kalimantan, South Sulawesi,
\nNorth Sulawesi and West Java.<\/p>\n
Also present were Coordinating Minister for the Economy
\nDorodjatun Kuntjoro-Jakti, Coordinating Minister for People's
\nWelfare Yusuf Kalla, and Minister of Mines and Energy Purnomo
\nYusgiantoro.<\/p>\n
The projects were halted in 1997 by the previous government of
\nSoeharto in the wake of the regional financial crisis.<\/p>\n
The relaunch of such projects should provide a glimmer of hope
\nthat amid the many discouraging signs in the country, investors
\nwould still come and invest.<\/p>\n
With the funding for the projects coming mostly from foreign
\ninvestors, especially the Japan Bank for International
\nCorporations (JBIC), the government expects this would restore
\ninvestor confidence in the country.<\/p>\n
\"The successful negotiations for these projects should augur
\nwell for future ones\" Dorodjatun said.<\/p>\n
This has come amid lingering fears that the country's economic
\nrecovery would be dealt a huge blow following recent data showing
\nsigns of setbacks in various macroeconomics indicators.<\/p>\n
In the first five months of the year, not only did the foreign
\ndirect investment (FDI) approvals decline, the country also
\nexperienced a sharp drop in exports.<\/p>\n
Both could have been the country's prime mover for its
\neconomic growth.<\/p>\n
FDI approval between January to May plunged by almost 60
\npercent to $1.7 billion from $3.98 billion posted during the same
\nperiod last year.<\/p>\n
Exports in the first five months of the year also recorded an
\nalmost 10 percent drop compared to the same period in 2001.<\/p>\n
Although this must have something to do with the global
\neconomic slowdown, internal factors are also believed to have
\nplayed a significant part in deteriorating confidence on the part
\nof investors in the country.<\/p>\n
Among other things, legal uncertainty, confusion about
\nregional autonomy and labor-related disputes served as the main
\nobstacles for robust capital inflows.<\/p>\n
As the government's efforts to improve those conditions seem
\nto be hitting snags, concerns are high that the country's
\neconomic outlook remains bleak.<\/p>\n
The only good news the government can boast of is that its
\ncurrency has been showing a strong performance against the
\ndollar.<\/p>\n
Such a development should be hailed as encouraging, as this
\nwould lead to a more manageable inflation, thus providing more
\nleeway for a lower interest rate of Bank Indonesia's promissory
\nnotes.<\/p>\n
However, analysts attributed the strengthening of the rupiah
\nmore to the bearish trend of the dollar in the region, therefore
\nthis has only little to do with internal conditions.<\/p>\n
Elsewhere, Dorodjatun said that the projects, which are
\ncategorized into petrochemical, electricity and fertilizer
\nprojects, would help move the wheel of economic activities as it
\nwould also absorb thousands of workers.<\/p>",
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