Irian governor urges lower lending rates

JAKARTA (JP): Irian Jaya Governor Jakob Patipi suggested yesterday that the government take measures encouraging banks to lower interest rates on loans used to invest in the province.

If the government wants to help Indonesia's less-developed regions, including Irian Jaya, it should have the political will to reduce interest rates on funds destined for investment in those provinces, Patipi told the press during a break in a seminar on investment in Irian Jaya.

The seminar, held at Hotel Indonesia, presented State Minister of Investment Sanyoto Sastrowardoyo and Minister of Tourism, Post and Telecommunication Joop Ave as speakers.

Patipi said his administration has provided some incentives for investors, such as tax breaks for stone and sand excavation projects for road-building and other construction in the province.

Sanyoto noted in his speech that the government offers some incentives to investors in the fishery and mining industries. The incentives include a reduction of up to 50 percent on property tax and tax exemptions of up to 10 years for loss compensation.

Irian Jaya, with a total area of 414,000 square kilometers, is rich in fishery and mineral resources, he said.

"For example, the province has an annual capacity of one million tons of fish," he added.

Sanyoto said the government is considering subsidies for transportation in Irian Jaya.

He acknowledged that transportation difficulties within the province, as well as to and from the province, have been a major problem for investors.

One investor, who claimed to have invested some Rp 900 million (almost US$395,000) in the aquarium fish business in the province, wrote a letter to The Jakarta Post last month, complaining about the termination of the government-sponsored flights connecting Jakarta and Biak in Irian Jaya with Los Angeles in the United States.

He said he had made a large investment in the business with a view to exporting to the United States.(kod)