Investments canceled

It would be interesting to find out why during the first half of 1996 the number of investors, both foreign and domestic, who canceled their investment plans increased so drastically compared to the same period last year. Whereas between Jan.1 and July 15 last year the total of foreign investments that were canceled totaled only US$29.3 million, that value jumped by 1,464.8 percent during the same period this current year. For domestic investments the value rose by 12.5 percent this year.

Although according to Wardijasa, Assistant to the Minister of Investment/ Chairman of the Investment Coordinating Board, the cancellations were generally due to financial constraints and unfavorable market survey findings, one cannot simply disregard the non-technical aspects that may be involved. Investment decisions are closely related to the social, cultural, political and even security and defense aspects affecting a country. It seems that policies encouraging investment are not enough. Policies are also needed that affirm legal security as well as other aspects besides purely technical ones to help create a climate that is more conducive to investment.

Stability is a prerequisite for making investors feel at home in this country, while the present situation does not seem to support such stability. It appears that we need to apply greater wisdom in trying to preserve the balance so that the social dynamics at work pending next year's general elections do not spoil the favorable investment climate that is needed by investors, particularly foreign.

-- Bisnis Indonesia, Jakarta