Investments canceled

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