Legal certainty key for more Japanese investment: Envoy
Legal certainty key for more Japanese investment: Envoy
Adianto P Simamora, The Jakarta Post, Jakarta
The Japanese Ambassador to Indonesia, Yukio Takeuchi, said on
Friday the government needs to restore a conducive investment
climate, by ensuring legal certainty, if they want to attract
more Japanese investors.
"The best way to attract foreign investment is by creating a
condition where all foreign companies operating in Indonesia can
continue to conduct business in a fair and certain legal
environment," Yukio told reporters, at a media conference held by
Japanese automaker Honda Motor Co. Ltd. to announce new
investment plans here.
The occasion was also attended by Minister of Trade and
Industry Rini Soewandhi.
Legal uncertainty, in addition to domestic political and
economic woes, has been a factor discouraging foreign investors
from entering Indonesia.
Japan is the largest foreign investor in Indonesia.
The Investment Coordinating Board (BKPM) said on Thursday that
foreign direct investment approvals dropped sharply by 41.5
percent to US$9.02 billion in 2001.
Meanwhile, Rini admitted that there were still problems
causing foreign investors to stay away from the country, but said
that the government was determined to resolve them.
"We realize that there is still a negative image of investing
in this country, but the government has taken measures to address
this problem," Rini said.
Honda Motor Co. managing director Satoshi Toshida expressed
confidence that the investment climate in Indonesia would
continue to improve over the next year.
"That is one reason, why we have decided to start investing in
this country," he told The Jakarta Post.
Honda Motor Co Ltd., Japan's third largest automaker, said on
Friday that it would spend US$30 million to build a new car plant
in Indonesia.
"We (Honda) are very happy to be here and we will continue to
expand our business in this country," Satoshi Okamoto, vice
president of PT Honda Prospect Motor, the sole agent for Honda in
Indonesia, told The Post.
He said that domestic market demand on automotive products
would continue to rise.
The new plant at Karawang, West Java, will start its
operations in April 2003 with a total annual production capacity
of 40,000 units.
"When it starts operation, the Karawang factory will take over
the production of all Honda automobiles in Indonesia," Hiroyuki
Yoshino, president and CEO of Honda Motor Co Ltd, told reporters.
A groundbreaking ceremony for the construction of the new
Honda plant was held in Kerawang on Thursday.
Honda currently produces passengers vehicles in Indonesia with
its joint venture partner, PT Honda Prospect Motor, at a plant in
Sunter, North Jakarta, with an annual production capacity of
17,000 units.
Honda Prospect has a 51 percent stake in the joint venture,
while the remaining 49 percent is held by Honda Motor Co. Ltd.
The share structure is to be reversed later this year, Kusnadi
Budiman, the vice president director of Honda Prospect, announced
at the same media conference.