Indonesian firms urged to invest more overseas

JAKARTA (JP): Christianto Wibisono, the chairman of the Indonesian Business Data Center, urged yesterday Indonesian businessmen to invest abroad.

Christianto said claims that investing abroad caused capital flights should not discourage investment overseas.

He said direct investment abroad, including in industrialized nations, was important because Indonesia had to catch up with other Asian investors.

"It is now time to see that investing abroad is part of the efforts of improving our economic performance," he said while commenting on the United Nations conference on Trade and Development's (UNCTAD) annual investment reports.

"How can our companies become global economic players if we discourage them by saying that investing will cause capital flight?" he said.

He cited Hong Kong, Taiwan and South Korea as nations that were increasing their investments abroad, particularly in Europe.

UNCTAD released a new report on Asian investment yesterday titled Sharing Asia's Dynamism: Asian Direct Investment in the European Union.

The report did not mention Indonesian companies' foreign companies although many had made significant investments abroad.

"I don't know why this report misses them. Perhaps it is because the Indonesian companies keep a low profile because they are scared of being accused of causing capital flight at home," he said.

He said Texmaco Group had set up a textile plant in Northern Ireland, Gemala Group a storage battery plant in England, while Salim Group had bought a trading house company in the Netherlands.

He said they used foreign countries' financial facilities and were smart not to take funds from Indonesia.

"They can always rely on the international funding system that has become very sophisticated," he said.

The report said foreign direct investment (FDI) from developing Asian countries to Europe rose from an average of US$100 million between 1989 and 1991 to an average of $860 million between 1992 and 1994.

While North America remains their investment location beyond Asia, their activities in Europe have gathered momentum, both in manufacturing and services.

At least three of the new industrialized economies -- Hong Kong, South Korea, and Taiwan -- are now net outward investors, the report said.

China and several Southeast Asian Economies, have become countries with large outward FDI but were not yet net outward investors. (bnt)