JAKARTA (JP): Taiwan considers Indonesia one of the best places for investment in Asia, especially since the Indonesian government has promised more deregulations in the near future to ease foreign investment procedures.
Chairman of a delegation of Taiwanese businessmen, Tai-Ying Liu, who met with Indonesian businessmen yesterday, told The Jakarta Post that the promised deregulation measures have been an important factor in increasing Taiwanese entrepreneurs' interest in the country.
"Therefore, although there may be some infrastructural problems, such as shortages of power supply, transportation and communications, I am convinced they can all be solved," he said.
In fact, he added, Taiwanese businessmen were also considering investing in infrastructure projects in Indonesia.
"Indonesia offers the advantage of low-cost labor and abundant natural resources such as land," Liu said.
According to Liu, Taiwan is currently facing a shortage of labor, and labor costs in that country are about 10 times higher than they are here.
Liu also considered the Indonesian government's free foreign exchange system as an additional incentive to prospective investors.
He said that the investment climate in Indonesia is better than that in the Philippines, mainly because labor wages and land prices in that country were higher.
"Although Indonesia's investment climate is similar to that in mainland China and Vietnam, they are not comparable. During the last five years, we have already invested more than US$10 billion in mainland China and we have just started to invest $2 billion in Vietnam," he said.
Politics
Liu, who is also president of the Taiwan Research Institute, said that due to political constraints, many Taiwanese firms shun investing in mainland China. "That is why we have come to seek opportunities here," he said.
Taiwan is particularly interested in investing in up-stream petrochemical industries, as well as in steel, cement, sugar and fertilizer production.
"Our total investment commitments here are about $5 billion and, I think, within the next three to five years the figure will double," Liu said.
"We are currently looking for a suitable industrial estate for the relocation of our industrial plants," he said.
Sugihono Kadarisman of the Foreign Promotion Bureau at the Investment Coordinating Board said that Taiwan is Indonesia's number one priority as a source of foreign investment.
"They have the funds and are also familiar with the way we work," he said.
During the meeting, Sugihono specifically invited them to invest in power generation, agroindustry and tourism.
"Indonesia still needs at least an additional 23,000 megawatts of electricity, of which 10,000 megawatts are expected to be supplied by the private sector since the government's funding is very limited," he said. (10)