Australian envoy says RI still a good place for investment

Rendi A. Witular, The Jakarta Post, Jakarta

Despite the various problems faced by Indonesia, businesses in Australia still consider the country to be a strong choice for business expansion, an envoy said.

The new Australian Ambassador to Indonesia David Ritchie said on Tuesday that bilateral trade and investment between the two countries remained very strong, and that Australia was keen to continue assisting Indonesia in attracting foreign investment.

"I believe that what Indonesia faces at the moment is only the problem of perception to attract investors back," said Ritchie during a business luncheon held by the Indonesia-Australia Business Council.

Currently, there are about 400 Australian companies operating in Indonesia.

Australia is one of Indonesia's largest foreign investors, with total investment last year reaching about A$6 billion (Rp 3.1 trillion).

In 2002, total bilateral trade in goods and services was about A$9 billion, with Indonesia enjoying a trade surplus of A$1.4 billion.

But Ritchie said that to attract more investment from Australia, Indonesia had to resolve the concerns of investors, particularly in the areas of security and the legal and tax systems.

He said many Australian investors were keen to expand their businesses here by setting up joint ventures, particularly in the banking and insurance sectors.

Foreign direct investment approvals here -- excluding those in the energy and financial sectors -- plummeted by 35 percent to US$9.7 billion last year from $15.06 billion in 2001. This drop has been attributed to the above concerns.

Boosting investment is crucial if the country hopes to generate the kind of sustainable economic growth needed to create jobs for the millions of people who have been out of work since the economic crisis struck in 1997.

Relations between Indonesia and Australia have been strained since the separation of East Timor from Indonesia in 1999, a contentious issue in which Australia became involved.

Since then there have been efforts to mend ties between the two countries. However, tension remains as Jakarta has continued to question the goodwill of Australia in maintaining relations between the neighbors.

During the luncheon, Ritchie said Australia wanted a stable, prosperous and united Indonesia because that would in turn benefit Australian security and business.

He also blamed the media for blowing out of proportion any problems between the countries.

"Too often we see in the media and elsewhere suggestions that there are constraints between the two countries .... Don't believe anything you read in the papers, it is all rubbish," Ritchie told the audience.