Japan's investors adopt wait-and-see attitude on Indonesia

JAKARTA (JP): Japan External Trade Organization (JETRO) president Ikuta Shoichi said on Monday that Japan was still optimistic about Indonesia's economic future but investors had adopted a wait-and-see attitude for the new government to be formed.

Shoichi told reporters that national instability due to political uncertainty and corruption, collusion and nepotism (KKN) had affected the economic sector.

"The prevailing social unrest and KKN practices have tarnished Indonesia's image in the eyes of Japanese investors," he told a news conference held to announce JETRO's participation in the Resource Indonesia Exhibition in Jakarta later this month.

He added that investors are waiting for the new government to be formed and hoped that stability could be restored to create a favorable economic condition for investors.

According to the Investment Coordinating Board (BKPM), Japanese investment licensed in the first eight months of this year totaled only US$318.5 million, compared to $1.33 billion in 1998.

Shoichi also stressed the importance of transparency, clarity and consistency of regulations and efficient licensing procedures to attract foreign investors.

JETRO is an organization which was founded by Japan's government to promote Japan's imports from developing countries and initiate economic development from the export sector.

Since it begun operation in Indonesia 40 years ago, JETRO has assisted at least 200 small and medium local companies to improve the quality of their products through technical assistance, consultation, training and promotional activities, Shoichi added.

The organization, he added, also provides market information to Indonesian companies to help them penetrate the Japanese market.

He said JETRO also cooperates with the National Agency for Export Development (BPEN) to boost exports by small and medium scale companies.

"A highly competitive market demands quality products that meet international standards," he said, adding that Indonesian companies must improve its competitiveness with other developing countries.

JETRO, he said, would continue to promote Indonesia among Japanese investors and importers.

Shoichi said his organization would display various furniture and handicraft products from ten local companies under its technical assistance program in the upcoming trade fair in the Kemayoran area from Oct. 20 to Oct. 24. (06)