Foreign investment drop temporary: Minister Sanyoto

JAKARTA (JP): State Minister of Investment Promotion Sanyoto Sastrowardoyo said yesterday there was a 36-percent drop in foreign investment approvals in the first five months this year due to the recent election, but said the trend was temporary.

Speaking after installing new officials at his office, Sanyoto, who is also Chairman of the Investment Coordinating Board, said the trend was "nothing to worry about" because it happened every five years at general election time.

He said the election had caused foreign investment approvals to drop 36 percent in terms of volume and 25.5 percent in value compared to last year's first five months.

But he said the drop was less than the 40-percent decline around the time of the last election in 1992.

"Foreign investment approvals in 1992 dropped 40 percent compared to 1991, so there have been worse times," he said.

The figures cited by Sanyoto did not cover investments licensed in the financial, service, oil and gas sectors and were related only to licensed investment commitments not to actual or realized investments.

"This is a five-year cycle for us. It happens everywhere else in the world at election times. Businesses wait to see who will win and what will happen," he said.

Sanyoto said that during the January to May period, foreign investment approvals totaled US$14.4 billion and domestic investment approvals Rp 59 trillion (US$24.58 billion).

He said the situation would recover by October or November, as in the last election year.

Sanyoto said this year's drop was insignificant compared to the rapid growth in foreign investment approvals over the last five years.

He said that during the last Five-Year Development Plan (1989 to 1994), total foreign investment approvals reached $44 billion.

"But now -- in the fourth year of the current (1994 to 1999) Five-Year Development Plan -- we have already licensed $108 billion in new foreign investment commitments," he said.

"This means that even if until the end of this year we have no additional foreign investment approvals, what we have achieved in this Five-Year Development Plan is already twice as much as in the last," he said.

He said that during the current development plan, his office wanted to approve more than Rp 44 trillion in foreign and domestic investments a year, or Rp 244 trillion in five years.

Sanyoto yesterday installed Kuntoro Mangkusubroto as the Investment Coordinating Board's deputy for planning; Adhi Sunarto as the Sanyoto's assistant for national corporate development; and Mardjono as second assistant for national corporate development. (pwn)

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