Government backs Australian investment
Government backs Australian investment
JAKARTA (JP): Indonesia will protect and secure Australian
investment despite the deteriorating political relations between
the two countries, a senior official of the Investment
Coordinating Board (BKPM) said on Thursday.
"Until now, I have not heard any reports of any Australian
investment venture being damaged," BKPM vice chairman Andung A.
Nitimihardja said on the sidelines of a meeting of BKPM and its
provincial offices (BKPMD).
Andung said the government was responsible to ensure the
safety of Australian investment.
Although no new Australian investment project was approved in
the last month, he said there was also no cancellation of an
investment project by Australian companies.
According to BKPM, the first eight months of 1999 recorded
the licensing of 38 Australian investment projects worth US$2.28
billion, of which more than $2 billion were earmarked for
electricity, gas and water.
He hoped the tension in bilateral relations would only be
temporary.
Anti-Australian sentiment is growing in Jakarta and other
parts of the country, especially in Balikpapan, East Kalimantan,
which is host to many Australian mining companies.
Australia's two biggest resources and mining groups, Broken
Hill Proprietary Co. and Rio Tinto Ltd. (RTP) pulled their staff
and their families out of Indonesia last week as tensions between
the two countries built over the crisis in East Timor.
Andung foresees a strong growth in foreign investment after
the presidential election in November.
Indonesia posted a 50 percent drop in approved foreign
investment to $5.88 billion in the first eight months from $11.7
billion in the same period last year due to political
uncertainty, he said.
"Indonesia should restore political stability to woo back
foreign investors," he said.
The establishment of a new government after the presidential
election is expected to return stability in the country, he said.
Andung said Indonesia was fundamentally more attractive for
foreign investors than any other Asian country but the current
political situation was not conducive for investment.
Andung said many investors from Europe, Asia and America
expressed their intention to invest in Indonesia once the
political situation was back to normal.
"President B.J. Habibie has in principle approved the granting
of a tax holiday incentive for foreign investors," he said,
adding that the details of the facility were being finalized at
the BKPM.
Andung added that a government ruling that would fully empower
the BKPMD to license foreign and domestic investment projects
would be finalized this week.
"BKPM will expedite the licensing procedures," he said. (02)