Foreign investment to decline by 30 percent

JAKARTA (JP): Foreign investment approvals are likely to decline by about 30 percent this year to US$21.9 billion from $33.8 billion in 1997, according to a senior investment official.

Asril Noer, the secretary to the State Minister of Investment, said here on Thursday that foreign investment approvals for the first 10 months of this year declined nearly 50 percent in value to $12.9 billion from $25.3 billion during the same period last year.

But in term of projects, foreign investment approvals increased 5 percent to 834 projects during the Jan. to Oct. period, up from 790 projects in the corresponding period last year.

"The President (B.J. Habibie) is expected to approve another four foreign investment projects for oil refineries and petrochemicals worth $9 billion later this year," Asril said on the sidelines of a seminar on quality controls, industry reforms and business opportunities.

The seminar was organized by the Indonesian Professional Engineer Association to celebrate National Quality Month.

As of Oct. 31, Asril said, the government had approved 42 projects worth $4.7 billion for British investors; 179 projects worth $2.7 billion for Australian investors; 53 projects worth $1.2 billion for Malaysian investors; 107 projects worth $1.2 billion for Singaporean investors; and 64 projects worth $1.2 billion for Japanese investors.

It has also approved 38 projects worth $564 million for U.S. investors; 25 projects worth $399 million for Dutch investors; and 50 projects worth $8.1 million for Canadian investors.

Asril also said that the value of domestic investment approvals for the first 10 months of the year dropped 57 percent to Rp 57.4 trillion ($7.6 billion) from Rp 100.3 trillion during the same period last year.

"Many people had predicted that the current political turmoil would considerably affect the interest of foreign investors in the country, but the fact is that the impact is less than expected and investors keep coming to the country," Asril said.

Asril said that foreign investors told the ministry that they were still optimistic about the country's economy, and the current political turmoil was seen as a necessary step toward a democratic country. (jsk)