Japan is likely to hold course with Indonesia

JAKARTA (JP): Japanese Ambassador Kimio Fujita says the ascension of Tsutomu Hata as Prime Minister and the inauguration of a new cabinet will not signify a shift in Japan's policy towards Indonesia.

"Mr. Hata served as a deputy Prime Minister during the previous administration, so in that sense the continuity of the government policy has been assured," Fujita said yesterday.

He explained that in Japan, there is a very strong tradition for continuity and thus no new drastic trends are likely to emerge.

"He (Hata) himself made it very clear he would follow the basic lines of the former government," Fujita said.

The 58-year old Hata was last week selected to replace former Prime Minister Morihiro Hosokawa who resigned as a result of allegations of financial impropriety.

"Please feel assured that our basic friendly relations will have no impact," Fujita said after signing a 1.192 billion Yen ($11.7 million) grant to Indonesia at the Foreign Ministry.

Commenting on the durability of the current minority government, Fujita said that everyone in Japan is hopeful of political stability in the months to come.

Further pursued if his answer meant the situation in Tokyo was currently politically volatile, the ambassador quickly retorted, "no, not at all, I think Japan is a quite stable country like Indonesia."

Fujita also tried to calm fears that the new minority government would signify a shift in Japanese interest away from Indonesia and bring forth a further weakening in Japanese investment here.

Japanese investment fell by about 40 percent in 1993 to just over US$836 million from the previous year's total of US$1.51 billion.

Investment

With the decline in oil prices, Indonesia is in critical need of investment to propel the Second Long-Term Development Plan, requiring Rp 660 trillion ($315 billion) over the next 25-years.

About three-fourths of the investment will have to come from the private sector, half of which is expected from direct foreign investment. Japanese investments represent at least 10 percent of all foreign investment.

"I entirely share your concerns," Fujita said about the decline in Japanese investment.

However he denied that the decline was due to a shift in policy from Indonesia towards other countries, blaming it more on the economic recession in Japan.

Fujita conveyed optimism on an increase in Japanese investments this year saying, "I have personally been following the trend of applications from Japan and I think it shows favorable signs."

The signing of diplomatic notes for yesterday's grant was conducted by Fujita and Wisber Loeis the Director General for Foreign Economic Relations.

It involves assistance for the improvement of vocational training equipment and of training for South-South Cooperation. (07)