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)