Direct investment still flowing to RI: Hamzah

Direct investment still flowing to RI: Hamzah

SINGAPORE (Reuters): Indonesia's State Minister of Investment,
Hamzah Haz, said here yesterday that trade and investment into
the country had not been completely halted by the economic
crisis, despite some credit financing problems.

The minister, in Singapore to attend the fourth meeting of
ASEAN (Association of Southeast Asian Nations) heads of
investment agencies, told reporters business had slowed down, but
was not stagnant.

"There has not been an interruption of foreign direct
investment. It is not stagnant," he said, speaking through an
interpreter.

"For the time being, because of the low purchasing power of
the market and level of difficulty in (obtaining) letters of
credit, there has been a little bit of a slowdown," he said.

Existing investors were continuing to do business in
Indonesia, the minister said.

He declined to comment directly about the delay in Singapore's
trade finance guarantee scheme for Indonesia and its effects on
trade flow, saying there were other problems affecting trade.

"The fluctuation of the exchange rate is also one main reason"
that was making investors cautious, he said.

Singapore has said it plans a US$5 billion trade financing
scheme, US$3 billion of which would guarantee export credit while
another US$2 billion would be used for exports through Singapore
to Indonesia.

The minister said foreign investors were still interested in
participating in Indonesia, particularly its oil and gas sector.

"There have been strong indications that an investor from
Kuwait is seriously going to (enter) the upstream and downstream
industries. This is the situation at the moment," he said.

Hamzah said he could give no time frame for the investment
because privatization of the sector would require changes to
Indonesian law which are still being considered.

Any investment in the meantime would have to be made via the
state owned oil monopoly, Pertamina.

A joint press statement released at the end of the meeting,
said foreign direct investment flows and intra-ASEAN investment
flows have declined "dramatically since the beginning of the
crisis."

"In this regard, they agreed that there is a need to take
collective actions and measures in addition to those taken in the
individual member countries," the statement said.