Indonesia still attractive for foreign investors: Minister

Indonesia still attractive for foreign investors: Minister

JAKARTA (JP): State Minister for Investment Sanyoto
Sastrowardoyo remains bullish on foreign direct investment flows
despite expected political tension come May's general election.

Sanyoto told a year-end press conference that there was no
correlation between the general election and investment.

"I don't see any relationship between the general election and
foreign investors' interests in Indonesia," he said. "The
election, which is held every five years here, is just a normal
political practice."

The May general election will elect most of the House of
Representatives and almost half of the People's Consultative
Assembly, which will elect the President and Vice President in
March 1998.

Most private sector analysts are also upbeat on national
economic prospects despite the election.

They believe the ruling Golkar grouping will enjoy a landslide
victory or at least maintain its control of the legislature.

Sanyoto cited the steadily rising incomes of the population as
one factor which would continue to encourage domestic and foreign
investment.

The country's per capita income of around US$1,000 is still
among the lowest in Southeast Asia. But its steady robust
economic growth of more than 7 percent a year is expected to turn
the country into a major market within the next few years.

Sanyoto, also the chairman of the Investment Coordinating
Board, said the government's pledge to keep introducing
deregulatory and bureaucratic reforms would help improve the
investment climate.

Sanyoto said a shortage of skilled workers rather than
political factors was more likely to discourage foreign
investors.

"Limited technology, poor marketing access, poor
infrastructure outside Java and arduous regulations will also
discourage foreign investors," he said.

Investment approval data released by the board yesterday
showed that 959 foreign investment projects were approved in
1996, up 20 percent on 799 approvals in the previous year. But in
terms of value, approved foreign investment fell 25 percent this
year to US$29.9 billion, from $39.9 billion last year.

The decline occurred because not as many big projects were
approved this year, he said.

Sanyoto could not give accurate figures on project
implementation rates because most investors had not reported to
the board after obtaining their licenses.

In the past, between 45 and 50 percent of licensed projects
have been realized. (icn)