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)