Imports of capital goods plunge 37.68 percent

JAKARTA (JP): Indonesia's imports of capital goods dropped 37.68 percent to US$5.69 billion last year from $9.28 billion in 1997, due to plunging investment activities in the country, the Ministry of Industry and Trade said on Monday.

According to ministry data, the import of capital goods for production dropped 25.37 percent to $2.88 billion last year, the import of supporting equipment declined 38.34 percent to $1.66 billion while imports of other forms of capital goods plunged 54.45 percent to $1.24 billion.

Imports of stone processing machinery shrank 79.67 percent to $22.54 million, imports of edible oil processing machinery dropped by 74.17 percent to $13.8 million and imports of leather processing machines declined 63.09 percent to $4.46 million last year.

Power generation machinery imports dropped 48.5 percent to $356.89 million while factory equipment imports fell 39.48 percent to $729.21 million in 1998.

Imports of passenger vehicles plunged 77.63 percent to $28.31 million, imports of telecommunications and electronic equipment fell 71.65 percent to $347.79 million, while imports of farming machinery and equipment slipped 55.37 percent to $52.34 million.

The Investment Coordinating Board (BKPM) earlier reported that foreign direct investment approvals fell by 60.7 percent last year to US$13.3 billion, while domestic investment approvals shrank to Rp 59.4 trillion last year from Rp 199.9 trillion.

The number of domestic investment projects dropped by 56.7 percent to 308 projects, but the number of foreign investment projects rose by 23.9 percent to 979 projects this year despite the sharp drop in their value.

BKPM attributed the low investment realization to limited financial support, shortage of raw material supplies, unskilled labor, low technology and ineffective marketing. (gis)