S'pore keeps neighborly with RI investment<\/p>\n
Kornelius Purba
\nThe Jakarta Post
\nJakarta<\/p>\n
Tiny but wealthy Singapore wields its financial might in
\nthe region, including in investment in Indonesia. The city state
\nis the third largest foreign investor in the country after
\nMalaysia and Saudi Arabia. In 2001, Singapore companies were
\ninvolved in 154 projects with investment value worth US$1.139
\nmillion.
\nSingapore has been one of the top six foreign investors
\nin Indonesia for the last five years. In terms of value, however,
\nit dropped significantly in the same period (with the exception
\nof the year 2000) in tandem with the slump in overall foreign
\ninvestment in Indonesia.
\nPresident of the Singapore Association in Indonesia (SAI)
\nPeter Chao said Indonesia remained an important site for
\ninvestment. Although investors face great challenges in the short
\nterm, the country was bound to become attractive again for medium
\nto long-term investment due to its large population and rich
\nnatural resources, among other draws.
\n\"Indonesia is very diversified not only in culture but
\nalso in resources,\" said Chao, whose own company operates in the
\nfurniture business.
\nOf the 154 projects, 124 are new ones while the remaining
\n30 underwent a change in status from domestic to foreign owned.
\nAlthough new projects represents 80.5 percent, the total value of
\nall new projects only makes up 15.6 percent of the total
\ninvestment value.
\nOnly eight projects were worth more than $5 million.
\nFor new foreign owned (PMA) projects, 40 percent are in
\nservices, like contractors in the oil and gas industry,
\nconsultancies, freight forwarders, as well as food and beverages.
\nAccording to Chao, 36.3 percent (33 projects) of the new projects
\nare located in Batam, which is strategically located only a few
\nkilometers from Singapore. The next favorite destinations are
\nWest Java and Jakarta, absorbing a 24.7 percent of new projects
\nworth $43.98 million. Bintan island, another neighbor of
\nSingapore, ranks third, with eight projects there worth $38.61
\npercent.
\nAccording to SAI data, the investment data trend line
\nbehaves inversely to the number of projects trend line. When
\ninvestment performance deteriorated during the economic crisis
\nfrom 1997 to 2001, the average project size shrunk. The number of
\nprojects increased but, conversely, when investment performance
\nshowed an upward trend in 2000, the average project size
\nincreased but the number of projects decreased.
\n\"When sentiments were down, there were less big-item
\nprojects, but many more small ones, whereas when sentiments were
\nup, there were slightly more big projects, but fewer small ones,\"
\nsaid Chao.
\nHe warned that the investment map had changed in recent
\nyears, and there was no room for complacency in securing
\ninvestment dollars. \"Indonesia is facing great challenges in the
\nsevere competition with other countries for foreign direct
\ninvestment.\"
\nThe former diplomat said the implementation of regional
\nautonomy tended to increase costs for foreign companies, because
\nprovincial authorities and regencies often impose levies on
\nforeign companies in addition to those exacted by the central
\ngovernment.
\n\"It also takes a longer time to process investment
\npermits now. You also have to deal with more people,\" he said.
\nChao urged the government to embark on comprehensive
\ninvestment policies because the country's attractiveness to
\nforeign investors was almost lost.
\n\"You have the future but you must work harder now,\" said
\nChao.
\n1<\/p>",
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"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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