New investment target cautiously welcomed
JAKARTA (JP): Businessmen and legislators welcomed the government's intention to raise the target of investment for the next four years as hinted by President Soeharto, but cautioned that a more open and just economy was required to support that objective.
A.A. Baramuli, a member of the House's commission on trade, banking and cooperatives, said the government should expand business opportunities for foreigners to attract more foreign investors.
"We currently limit foreign ownership of the publicly listed companies to 49 percent of the listed shares. Since we expect to have free trade by the year 2020, we may as well start anticipating it from now and allow for foreign ownership of up to 70 percent, for instance," he said.
President Soeharto said in his National Day Address at the House plenary session on Wednesday that the country's economic growth target for the remaining four years of the current Sixth Five Year Plan should be revised upward from 6.2 percent to 7.1 percent
However, such an upward revision of the growth target would require the increase in the investment target from Rp 660 trillion (US$295 billion) to Rp 815 trillion, of which 77 percent is expected to come from the private sector.
Hamzah Haz, a member of the House Budgetary Commission, said that to support the target, the banking sector should expand its lending to productive businesses.
"Don't worry about inflation. As long as the loans go to productive businesses, banks should not hesitate in expanding their lending operations," he said.
Fadel Muhammad, the chairman of Bukaka Group, instead asked for easier business licensing and financing regulations and the provision of adequate market information, particularly for small and medium-scale enterprises.
"It is also necessary to differentiate the approaches used to develop the western and the eastern parts of Indonesia," he said.
Businessman Aburizal Bakrie of the Bakrie Group, argued that new investments could be encouraged only by easing licensing regulations.
"Banks should also be more active in supporting the new investment target," he said.
Minister of Industry Tunky Ariwibowo, also commenting on President Soeharto's speech, said that the government would give priority to investments in strategic industries which meet the domestic market demand; export-oriented industries; natural resource-based industries and those which have a strategic value in technological development and may encourage the development of other industries; and industries that stimulate economic activities in the regions outside Java, especially in the eastern part of the country.
State Minister of National Development Planning/Chairman of the National Development Planning Board Ginandjar Kartasasmita said that the government would improve efficiency by encouraging transparency and streamlining licensing procedures.
Incentives, he said, are unnecessary, "if what is meant by incentives are protection".
"We can no longer rely on protection of small and medium-scale businesses to enhance a more equitable distribution of income. What we can do is provide easy access to financial sources, increasing managerial training, information and technology," he said.
However, Tadjuddin Noer Said, a member of the House Budgetary Commission, had a different view, saying that it was most important to enhance economic justice for all Indonesians.
"If the government intends to increase investments, it must be followed by an increase in the people's economic capacity. The government should clearly take sides with the people and not with big businesses," he said. (rid/pwn)