Harvest promotes investment in agribusiness

Harvest promotes investment in agribusiness

JAKARTA (JP): The government will cooperate with United
States-based business consultant PT Harvest International
Indonesia to promote foreign investment in the agribusiness
sector.

Under a memorandum of understanding (MOU) signed here on
Monday, Harvest, the Agribusiness Agency of the Ministry of
Agriculture and the Investment Coordinating Board (BKPM) will
create a resource center to provide information on prospects and
opportunities in agribusiness to overseas investors.

Harvest's chief executive Harvey Goldstein said as a
consequence of the wide coverage of political turmoil, existing
foreign investors would be more credible to investors abroad than
the government itself.

"Businessmen and foreign investors in particular are tricky to
handle and cautious. They don't easily believe the government,
not even their own," he said after the signing of the MOU
agreement.

He said many foreign companies abroad were daunted by reports
of the economic turmoil and political disintegration and were
reluctant to invest in Indonesia.

Harvey said the center would not aim to tell foreign investors
Indonesia was a trouble-free zone.

Rather, the center would aim to attract investors now "to look
at opportunities, so when the economic and political turn around
occurs, foreign investors would be first in line, not last".

State Minister of Investment and chairman of BKPM Hamzah Haz,
and Minister of Agriculture Soleh Solahuddin also attended the
signing ceremony.

Hamzah admitted the foreign investment sector continued to
feel the impact of economic and political turmoil, which had
affected the country since mid-1997.

"We sincerely hope the June elections will run smoothly so
that it can end the crisis and help restore our image," he said.

Foreign investment approvals dropped by about 70 percent last
year to US$13.5 billion due to the crisis, he said.

Agribusiness, however, is an exemption.

Haz said foreign investment in the agribusiness sector
recorded a 100 percent increase in value from $465.3 million in
1997 to $938.5 million in 1998.

"The trend for foreign investment in agribusiness will most
likely remain throughout 1999."

Soleh emphasized that political will from the government was
urgently needed to boost the development of the agribusiness
sector.

Opportunities for investment in agribusinesses were available
in seed growing, especially high quality unhusked rice and soya
bean seeds, and fertilizer production, which required an adequate
supply of potassium, he said.

Foreign investment opportunities were also available in the
supply of machinery and equipment, particularly tractors and
dryers, and the marketing and distribution of commodities, he
said.

Soleh said most foreign investors currently eying the
agribusiness sector were from Asia and included Malaysia,
Singapore and Taiwan.

"Investors from Middle East countries have just started to
find information on investment opportunities on agribusiness
here," he said.

"While it seems to me that investors from Europe and the
United States, except for major companies existing here, are
maintaining a wait-and-see policy." (cst)