New investment target cautiously welcomed

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)