Political conflict 'no longer scares foreign investors'

Political conflict 'no longer scares foreign investors'

JAKARTA (JP): Foreign investors in the manufacturing sector
were more concerned about poor security and law enforcement than
rivalries among the political elite, an analyst said.

"It (concern) is not about politics, but more about guarantee
of security, law enforcement and consistency of investment
regulations," Herman Latief, member of the advisory board of the
Indonesian Industrial Estate Association (HKI), said on the
sidelines of a seminar on prospect of investment in the
industrial estate sector.

He said major foreign investors in the industrial estates had
told the association they were not worried about the possibility
of worsening political situation and had no plans to pull out of
the country for that reason.

"That's because they've seen the worst during the 1997/1998
economic and political crisis. No matter what will happen in the
political sector, it will not hurt us more," he said.

However, investors are very concerned about the rampant
looting on their properties and conflicts over land ownership
with locals, not to mention robbery of container trucks during
delivery, he said.

Members of the association of electronics manufacturers
recently complained about the rampant robberies of container
trucks transporting electronics goods from factories to the
harbors.

Investors in the forestry and pulp and paper industry have
raised concerns with the government over land disputes with
locals.

At the Batam Industrial Estate, management said investors in
the area were particularly concerned about the government's
inconsistency in the implementation of regulations, such as those
regarding taxation.

Minister of Investment and State Enterprises Development Rozy
Munir, who attended the seminar, acknowledged that his office had
received many complaints from foreign investors about poor
security, law enforcement and legal protection.

Rozy said one investor, being fed up with the country's lack
of law enforcement and uncertain regulations, decided to pull
out, while another investor canceled investment plans over the
same concerns.

Rozy, however, declined to name the companies.

Despite all the problems, Basroni Rizal, head of foreign
affairs of HKI, said industrial estate operators started seeing
positive growth in their business.

He said the operators were optimistic about the prospects for
their business after seeing that most of the manufacturers had
recovered from the impact of the crisis and started boosting
output and hired more workers.

Herman, who is a commissioner of Lippo Cikarang Industrial
Estate in Lemahabang, Bekasi, said sales of new industrial space
had also improved.

"We saw sales increasing in the first quarter," he said, but
did not provide details.

There are currently 65 industrial estates across the country
accommodating more than 4,570 factories, about half of which are
owned by foreign investors and manufacturers, especially Japanese
and Korean, such as Sumitomo, Hyundai, Marubeni and Itochu.

Most of the estates, or 43 sites with about 2,100 factories,
are located in Jakarta and West Java. (cst)