Foreign investment in small businesses

Future Japanese investments will be dominated by small and medium-scale businesses. This was disclosed by the Japanese foreign trade (Jetro) director, Masanori Osumi, to the press in Jakarta on Monday.

According to Osumi, Jetro has received many requests for information on investment opportunities in Indonesia from Japanese small and medium-scale businesses. This new trend is caused by the fact that Japanese big businesses which are already established in Indonesia need small and medium-scale supporting businesses, especially those based in Japan.

Another reason is the appreciation of the yen against the U.S. dollar, which has weakened the competitive standing of many Japanese companies because of high cost pressures.

We naturally hope that many small and medium-scale investments will come to Indonesia to help open more job opportunities, earn foreign exchange, promote the transfer of technology and so forth.

The opportunity was already opened through the deregulation package of May 1994, which, among other things, permits 100 percent foreign investment operations. The amount of money invested can be adjusted to match the economic viability and type of operations of the business concerned and is no longer restricted to US$ 1 million as before. Practically all lines of business have been opened to foreign investment.

Jetro, however, still complains about infrastructure and bureaucratic constraints. This is an old complaint which we must answer.

-- Suara Karya, Jakarta