Foreign investment rose to US$12.9b: Sanyoto
Foreign investment rose to US$12.9b: Sanyoto
JAKARTA (JP): Minister of Investment Sanyoto Sastrowardoyo said yesterday that foreign investment approvals during the first three months of this year reached US$12.9 billion.
"This is the highest level of foreign investment recorded among members of the Associations of South East Asian Nations (ASEAN) ... This shows that Indonesia remains an attractive site for foreign investment," Sanyoto said after opening a seminar on backward linkages of investment projects.
By comparison, approved investment projects during the first two months of last year reached US$10.4 billion. For the whole of 1994, Indonesia recorded an impressive record of US$23.7 billion in approved foreign investment, up by almost 300 percent from the previous year.
Power generation and oil refining projects accounted for the bulk of licensed foreign investment during the first three months of this year. Among the approved projects are the Sabang Oil Refinery, with a total investment of US$1.59 billion, Indo Sox Ltd -- also an oil refinery -- with $2 billion, Norco Internusa, with $1.8 billion, and Jawa Power, with $1.98 billion.
The figure released yesterday apparently does not include investment in the multi-billion dollar Natuna gas liquefaction project in Riau province.
Sanyoto said that many of the licensed projects were small investment ventures, including supporting industries in electronics, automotive manufacturing and machinery.
"So, what Nomura concluded in its research report is not borne out by the evidence down here," Sanyoto said, referring to a 1993 study by Japan's largest securities firm, the Nomura Research Institute.
According to Nomura's research, which covered 625 Japan companies, Indonesia ranked fourth as a favored site for Japanese investment, after China, the European Union and the United States.
Nomura put Indonesia in fifth place for Japanese investment in the electronics industry, after China, the European Union, the United States and Malaysia.
Sanyoto said that Nomura's findings seemed inaccurate, and said that Panasonic of Japan provided a counter example.
Panasonic, he said, had committed itself to relocating its largest loudspeaker manufacturing plant to Indonesia. The project is intended to produce 50,000 loudspeakers per year.
A number of foreign semiconductor companies have also promised to relocate their plants to Indonesia, Sanyoto said.
Indonesia gained a bad reputation in the semiconductor industry when both Fairchild and National Semiconductor -- two semiconductor companies -- left Indonesia in 1986.
Sanyoto rejected any notion, yesterday, that Indonesia's country risk for foreign investment was increasing. "Some even say Indonesia's country risk is higher than Pakistan or even Bangladesh. That is a groundless argument."
In its Indonesia Risk Report 1995, Hong Kong-based Political and Economic Risk Consultancy Ltd grades Indonesia's foreign investment risk at 3.25 in a range of zero (the lowest) to ten points (the highest), which is the same as the grade Indonesia received last year from the same firm.
Indonesia's foreign investment risk is the lowest among the risk factors assessed by Risk Consultancy, such as exchange rates, foreign credit, trading, and social disorder and political risks. (rid)