Malaysian firms in RI stop operations

Malaysian firms in RI stop operations

KUALA LUMPUR (Reuters): A number of Malaysian companies in Indonesia have stopped operations while waiting for the situation there to stabilize, local newspapers reported yesterday.

The papers quoted Malaysian Trade and Industry Minister Rafidah Aziz as saying that political developments and financial problems in neighboring Indonesia have stopped some of the companies from carrying on their businesses.

"Some have stopped operations for a while, and others are thinking of suspending operations but are still maintaining their workforce," she was quoted as saying by the Sunday Star.

"They are withholding operations not only because of the present political conditions there but also because financing has not been forthcoming."

The newspapers did not say when the companies stopped their operations or the number involved.

Rafidah said Malaysia's investments in Indonesia were quite substantial. "I do not have the figures but we have a variety of investments which range from plantations, manufacturing to the services sector, located not only in Jakarta but in other parts of Indonesia as well," she said.

Latest figures were not available but it was reported that Malaysian investments in Indonesia for 1996 totaled about US$4 billion.

Rafidah also urged Malaysian investors in Indonesia to register with the trade office in the Malaysian embassy to enable the government to provide assistance.

The situation in Indonesia is beginning to return to normal after weeks of riots which left more than 500 dead.

Widespread protests against former president Soeharto's regime led to his resignation and replacement by B.J. Habibie, who promised to implement political reforms and boost the economy which suffered its worst slump in decades.