Irian governor urges lower lending rates

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)