Foreign firms invest at record high of $23.1b

JAKARTA (JP): Foreign investments approved by the government during the first 10 months of this year reached a record high of US$23.1 billion with commitments for the development of 374 projects, State Minister for Investment Sanyoto Sastrowardoyo says.

"As we still have two months to go, this year's foreign investment approvals may reach $30 billion," he told reporters after meeting with President Soeharto at the Merdeka Palace here yesterday.

The previous record high was $10.3 billion, which was achieved in 1992. Approvals for foreign investments declined to $8.1 billion last year.

Sanyoto, also chairman of the Investment Coordinating Board (BKPM), noted that next year's figure on foreign investments might be even larger as the government will probably close their deal with Esso Natuna Inc., a U.S. Exxon Corp. affiliate, for a natural gas liquefaction project in Natuna of Riau, early next year.

The Natuna project is likely to need an investment of some $34 billion, he said.

"During the Asia Pacific Economic Cooperation (APEC) meeting later this month, the memorandum of understanding on the Natuna project is expected to be signed and the application for its investment might be processed early next year," Sanyoto said.

He noted that Japan remained as Indonesia's largest investing country with total investment commitments of $18.5 billion, or 20 percent of the total foreign investments, for non-oil and non- financial sectors, followed by Hong Kong with $14.1 billion, Britain with $9.6 billion, the United States with $8.6 billion, Singapore with $7.0 billion, Taiwan with $6.8, South Korea with $5.4 billion, Germany and Australia with $2.0 billion each.

Chinese visit

In addition to investment records, Sanyoto also reported to the President about his recent visit to China to address the Pacific Rim Forum, which was attended by nearly 700 businessmen from 20 countries.

He said that Indonesia needs to monitor investment developments in China, which last year approved 83,437 projects with total foreign investments of $111.4 billion.

"The tendency of foreign investment in China is declining, while in Indonesia it is increasing," Sanyoto said. "However, we have to keep our eyes on China's economy as it is our most ardent competitor in attracting foreign investments."

China, Sanyoto said, still offers a number of incentives which Indonesia cannot, such as a tax holiday (exemption) and a lengthy land title of 99 years.

He said earlier yesterday, when inducting two high-ranking officials at the ministry of investment, that Indonesia still faces internal problems, especially in terms of bureaucracy and inadequacy of investment policies.

Minister Sanyoto said that Asril Noer, secretary at the ministry, and Aditiawan Chandra, expert assistant to the minister, were appointed especially to formulate policies aimed at mobilizing funds for investments.

"By such tokens (policies), we hope we can mobilize more funds, either from foreign sources or local ones, to finance productive investment projects, especially those which are export-oriented and labor-intensive," Sanyoto said. (rid)