BKPM and Foreign Ministry to promote investment

BKPM and Foreign Ministry to promote investment

JAKARTA (JP): The Ministry of Foreign Affairs and the
Investment Coordinating Board (BKPM) signed an agreement on
Tuesday to cooperate in promoting foreign investment in the
country.

Minister of Foreign Affairs Ali Alatas said that under the
agreement overseas embassies, consulates general and trade
offices would be authorized to issue preliminary approvals to
foreign investors wishing to open businesses in Indonesia.

"It is a breakthrough which reflects the government's serious
efforts to attract foreign investors to Indonesia amid the
current low confidence and unattractive condition of Indonesia,"
Alatas said after the signing of the agreement.

Alatas said that under the agreement, Indonesian diplomats
would receive training from BKPM about investment opportunities
in Indonesia.

"The overseas representatives will also be more proactive in
informing foreign investors about the business opportunities in
Indonesia and policies made to facilitate foreign investment," he
said.

Alatas said that the new service would be provided in all
Indonesia's overseas representative offices.

"We are trying to attract traditional foreign investor
countries, such as Britain, the United States, Japan and Hong
Kong, to invest more and also to catch new potential investors
such as Middle East countries," he said.

State Minister of Investment Hamzah Haz said the embassies and
consulates would also be authorized to provide technical
assistance to prospective foreign investors.

"It is part of our effort to streamline paperwork to help
facilitate the operations of foreign and local investors in
Indonesia," Hamzah, who is also the chairman of BKPM, said.

He said the Indonesian embassies were expected to begin the
new task in the third quarter of this year.

Under the new service, potential foreign investors can send
their application letters and other requirements to Indonesian
embassies or consulates in their home countries.

The embassies would then select the suitable proposals and
forward them to BKPM for possible approval.

"Investors will not have to come to Jakarta to hand in their
investment applications. They only have to come here after their
proposal has been approved. The new service would help minimize
potential investors' costs," he said.

Hamzah said that Indonesian diplomats would be better informed
about the characteristics of investors from their working areas.

"They will provide better approaches to attract investors from
their areas because they know the investors' tastes better than
BKPM," he said.

The signing of the agreement was Hamzah's last responsibility
as state minister for investment and chairman of BKPM. Hamzah,
also chairman of the United Development Party (PPP), relinquished
his position later in the afternoon to Marzuki Usman, the
minister of tourism, arts and culture. He will then focus his
activities on campaigning for his party, one of 48 contesting the
June general election.

Hamzah said foreign direct investment fell by 60 percent to
US$13.6 billion last year from $33.83 billion in 1997.

However, the number of foreign investment projects rose by
23.7 percent to 1035 projects last year from 790 projects in
1997, despite the sharp drop in their value.

He said the rise in the number of approved foreign investment
projects indicated a shift in the interest of investors to
medium-scale projects from large-scale ones in previous years.

Foreign direct investment approvals during the first four
months of this year amounted to 279 projects worth $935 million,
he said. (gis)