Foreign investment declines by 15 %

Foreign investment declines by 15 %

JAKARTA (JP): Government-approved foreign investment declined
by 15 percent within the first two-and-a-half months of this year
over the same period of 1995, while domestic investment rose by
86.5 percent.

Data from the Investment Coordinating Board showed that
foreign investment approved between Jan. 1 to March 15 this year
reached US$8.5 billion, far lower than the $10 billion approved
in the same period in 1995.

The data also indicated that domestic investment in the first
months of this year increased to Rp 25 trillion ($10.8 billion)
from Rp 13.4 trillion in the same period of 1995.

In terms of projects, however, the number of foreign
investment projects increased by 72.6 percent to 271, from 157 in
the same period in 1995.

The number of domestic investment projects decreased by 1.4
percent from 213 to 210.

The decline in foreign investment coupled with the increase in
projects seems to indicate that foreign investors are becoming
more interested in smaller ventures. Domestic investors, on the
other hand, seem to be committing to bigger projects.

Approved investment projects normally need about two years for
realization. The coordinating board has ruled that an investment
license will be revoked if construction has not begun three years
after a project is approved, unless the investor applies for an
extension.

The data showed that foreign investment is mainly committed to
the paper industry (with a total investment of $2.8 billion), the
chemical industry ($1.6 billion) and housing and industrial
estates ($1.1 billion).

Most domestic investment was in the chemical industry (Rp 4.7
trillion), housing and industrial estates (Rp 4.3 trillion) and
the paper industry (Rp 3.4 trillion). (kod)