Indonesia still attractive for foreign investment

JAKARTA (JP): Indonesia has the potential to become the most attractive country for foreign investment, said Chairman of Harvest International Inc. Harvey Goldstein.

Goldstein told a two-day seminar on joint ventures, which ended yesterday, that Indonesia's single-digit inflation and 18 major deregulation policy packages released since 1982 offer advantages to foreign investors.

In spite of the labor riots which occurred in Medan, North Sumatra last week, Goldstein cited Indonesia's low labor wages, political stability and large consumer market as factors which make Indonesia attractive for foreign investment.

However, Goldstein said several shortcomings remain to hamper foreign investment in Indonesia, such as the divestiture laws (Pakto 1993) which require divestment to minority shareholders within 20 years of initial operation, weak human resource development and monopolistic practices by various strategic sectors.

He added that special treatment of elite businessmen, non- transparent investment regulations and land title rules are some impediments to foreign investment in Indonesia.

Indonesia needs to refocus its economic and investment policies and allow greater domestic market access to foreign investors due to increased competition from other Asian countries. (03)