Japanese businesses want security in Indonesia

By Sylvia Gratia M. Nirang

TOKYO (JP): Japan's business community of the Japan Federation of Economic Organizations (Keidanren) have asked the Indonesian government to give full attention to handling the country's security situation and to give more certainty for investors.

Senior Managing Director of Sumitomo Corporation Tatsuo Nishida, which operates industrial estates in Jakarta and Surabaya, said on Tuesday that the Japanese investors were highly concerned about Indonesia's security condition.

"Over 100 firms of both local and joint ventures have been developing their industry in our industrial estates in Jakarta and Surabaya," Nishida said.

"They are very concerned about the country's current security stability, especially before and after the general election. They said that they could not operate amid uncertainties," he said in a Keidanren's meeting with Indonesian Minister of Industry and Trade Rahardi Ramelan.

Nishida said that those companies might leave Indonesia if the situation becomes worse.

"If this happens, it will not only kill the industrial park developers but also the whole economy. So please do not let it happen and make the story of your success appear again," he said.

Rahardi, who is leading a trade mission to Japan, said that he understood the Japanese investors' problems and pledged to do his best to protect the foreign investors' interest.

"General Wiranto, the Indonesian Armed Forces Commander earlier pledged that the armed forces would guarantee that your investment in Indonesia is safe," he said.

In his meeting with Keidanren, Rahardi also encouraged the business community to benefit from the crisis by taking over factories left idle by ailing local owners.

He said most of Indonesian companies were now operating far below their production capacity.

"The automotive industry is now operating only at 15 percent of their capacity. Other businesses are now able to operate only at 30 percent of their capacity before the crisis.

"This is an opportunity you have to catch. There are many factories lying idle in Indonesia. So I encourage you, the Japanese business community, to be daring and invest money in Indonesia and take part in the country's efforts to lift itself out of the crisis," he said.

Japan is the largest foreign investor in the country, with approved investment totaling $1.36 billion last year, or about 9.5 percent of the total foreign investment approval of $13.6 billion.

During the meeting, the business community also asked the government to further ease restrictions in foreign investment to attract more investors to the country.

Yoshiro Kuwata, executive vice president and representative director of giant electronic equipment maker Hitachi applauded the government for allowing foreign investors to own 100 percent of the shares in companies operating in Indonesia and said it made good progress in attracting foreign investors.

But some restrictions, he said, such as those related to the mandatory divestment requirement had yet to be relaxed. He said having a local partner sometimes created difficulties.

Hitachi, he said, had acquired the stakes of its Indonesian local partners due to the financial difficulties suffered by the partners.

Deputy chairman of the Investment Coordinating Board, Sugihono Kadarisman said the government was studying the possibility of reviewing some regulations to facilitate foreign investors.

He said the mandatory divestment requirement could, for instance, be relaxed by eliminating the amount of shares which should be divested by foreign investors.