Japanese businesses want security in Indonesia

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.