European investors cancel plans in RI due to unrest

JAKARTA (JP): Many European investors have backed down from their plans to invest in Indonesia due to the high incidence of social unrest, a noted business envoy has said.

Hashim Djojohadikusumo, Indonesia's special business envoy for Europe, said on Thursday that his recent trip there to promote investment in Indonesia became rather fruitless because investors were concerned over security.

"They are skeptical about Indonesian ability to maintain security now," he told reporters after meeting Industry and Trade Minister Rahardi Ramelan.

Some companies planning to invest in the country had postponed their plans indefinitely, he added.

He cited Continental German, which had initially planned to invest 100 million Deutschemark (US$59.52 million) in a tire manufacturing plant in Bekasi, West Java.

The company delayed its plan in November due to the political uncertainty in the run-up to the June general election and presidential election later this year.

Indonesia has been hit by seemingly endless bouts of ethnic and religious violence over the past few months with the latest round on Ambon island leaving almost 90 people dead and hundreds of properties burned or damaged.

Other companies from Italy and Switzerland have also decided to put investment plans on hold, he said.

Many investors in Europe had asked him about last week's bloody riots in Ambon, Hashim said, adding that the riots had prompted many governments to warn their citizens against traveling to Indonesia.

Several countries, including the United States and Japan had issued travel advisories for their nationals intending to travel to Indonesia.

Shoe and textile-related exporters said they now had to meet their prospective buyers in their respective countries or in Singapore to arrange business deals due to concerns for safety.

"Some executives have to get special permits from their directors to travel here, it's not as easy as before," he said.

"So you can imagine how hard it is to restore the confidence of the European community in Indonesia," he said. (das)