RI capital goods sector needs Malaysian investment<\/p>\n
JAKARTA (JP): State Minister of National Development Planning
\nGinandjar Kartasasmita invited Malaysian firms yesterday to
\nincrease investment in the Indonesian capital goods industry.<\/p>\n
The minister said the industry was promising for investors.<\/p>\n
\"Manufacturing will increase from a quarter of GDP (gross
\ndomestic product) to a third and be increasingly dominated by
\nheavy industry, machinery and increasingly skill-intensive light
\nindustry sectors,\" he said in a one-day Malaysia-Indonesia
\nPartnership forum here.<\/p>\n
He said Indonesia, with solid macroeconomic management and
\nincreased involvement in the world and regional economy, would
\nmaintain an annual growth of about 7 percent in the next 20
\nyears, supported by increasing production in capital goods.<\/p>\n
Iman Taufik, a vice chairman of the Indonesian Chamber of
\nCommerce and Industry, acknowledged that Indonesia still suffered
\na deficit of US$15.2 billion in its international trade of
\ncapital goods -- including automotive products and electronics --
\nin 1995 even though it gained a surplus in its total trade.<\/p>\n
According to the Central Bureau of Statistics, Indonesia's
\nexports reached $45.4 billion in 1995, while its imports were
\nrecorded at $40.6 billion, thereby resulting in a trade surplus
\nof $4.8 billion.<\/p>\n
Iman said the country's exports of oil and gas, plywood, pulp
\nand paper, natural rubber and palm oil products were the main
\ncontributors to the trade surplus.<\/p>\n
\"Malaysian business communities are therefore invited to
\nstrengthen cooperation in the capital goods industry in
\nIndonesia,\" he said.<\/p>\n
According to Malaysian Industrial Development Authority
\nchairman Tan Sri Zainal Abidin Sulong, Malaysia's industrial
\nactivities had moved toward the industrial sectors with high
\ntechnology.<\/p>\n
\"Malaysia's business sector is more capital intensive rather
\nthan labor intensive,\" he said, adding there were opportunities
\nfor both countries to cooperate in the capital goods industry.<\/p>\n
Based on data, between January and November 1996, Malaysian
\ninvestors were committed to investing in 145 projects worth $3.89
\nbillion in various sectors, such as telecommunications, financial
\nservices, agribusiness, manufacturing, property and
\ninfrastructure development.<\/p>\n
According to Iman, who is also president director of PT
\nGunanusa Utama Fabricators, the Indonesian government is
\ncurrently planning to strengthen the domestic capital goods
\nindustry through the promotion of joint ventures with foreign
\ncompanies as well as developing human resources and development.<\/p>\n
He said there were currently around 750 Indonesian companies
\nproducing machinery, equipment and spare parts with total
\ninstalled capacity of about 400,000 tons annually. In addition,
\n37 enterprises were engaged in providing engineering services.<\/p>\n
He also said Indonesia would need a total investment of $200
\nbillion for the development of infrastructure, $50 billion in the
\noil and gas sector and $450 billion in non-oil industries to
\nmaintain an annual economic growth of 7 percent in the coming 10
\nyears.<\/p>\n
Meanwhile, chairman of Lippo group James T. Riyadi and
\nchairman of PT Gemala Group Sofyan Wanandi said yesterday that
\nopportunities were plentiful for Indonesian and Malaysian
\nbusinesspeople to form partnerships but both governments were
\nexpected to introduce more supportive rulings.<\/p>\n
They said businesspeople of both countries needed to seek more
\ncooperation as neighbors of the same culture.<\/p>\n
Both countries could complement each other in many sectors.
\nMalaysia, which lacks manpower, could relocate its labor-
\nintensive industries to Indonesia which has plentiful human
\nresources.<\/p>\n
Indonesia, meanwhile, could benefit from Malaysia's developed
\nfinancial sector.<\/p>\n
\"The chances are big. But some government regulations don't
\nseem supportive,\" said James.<\/p>\n
James criticized the Malaysian government for its policy to
\nbar foreign investors from investing in the financial sector --
\nincluding in banks, securities houses and life insurance -- while
\nIndonesia has allowed foreign investment in that sector. (10\/jsk)<\/p>",
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