Foreign investment approvals down

JAKARTA (JP): Foreign investment approvals fell by 25.3 percent during the first eight months of this year to US$22.2 billion, from $29.7 billion in the same period of last year, State Minister of Investment Sanyoto Sastrowardoyo announced yesterday.

Domestic investment, however, recorded a 117.4 percent increase in the January-August period of this year to Rp 77.4 trillion ($32.7 billion) over the same period of last year, he said after meeting with President Soeharto at Merdeka Palace.

Sanyoto explained that the lower value of approved foreign investment this year was due to an absence of proposals for large projects.

"Don't say that it is a drop because this year we have no approved refinery projects," Sanyoto said, contending that last year's high level of foreign investment approvals resulted from seven oil refinery projects with a total value of $12.7 billion.

Last year foreign investment approvals were $39.9 billion for 799 projects, up from $23.7 billion for 449 projects in the previous year.

Sanyoto, who is also chairman of the Investment Coordinating Board, forecasted that the value of foreign investment this year will not reach last year's level, but will still be higher than in 1994.

The fall in the value of foreign investments during the first eight months of this year came despite the fact that the number of approved projects rose 33 percent to 677 projects from 508 projects in the same period of last year.

Sanyoto argued that the increase in the number of foreign investment projects shows that Indonesia remains attractive to foreign investors.

"Moreover, the government has already announced that it will give a tax holiday... that's an additional incentive for investors," he said, adding that there had been many inquiries to his office about the tax facility.

The facility offers a tax break of up to 12 years to new industrial plants producing certain products which will be announced by a newly-established ministerial team.

Sanyoto said 55 percent of the approved foreign investments are implemented, while the implementation rate of domestic investments is 46 percent. (rid)