RI capital goods sector needs Malaysian investment
RI capital goods sector needs Malaysian investment
JAKARTA (JP): State Minister of National Development Planning
Ginandjar Kartasasmita invited Malaysian firms yesterday to
increase investment in the Indonesian capital goods industry.
The minister said the industry was promising for investors.
"Manufacturing will increase from a quarter of GDP (gross
domestic product) to a third and be increasingly dominated by
heavy industry, machinery and increasingly skill-intensive light
industry sectors," he said in a one-day Malaysia-Indonesia
Partnership forum here.
He said Indonesia, with solid macroeconomic management and
increased involvement in the world and regional economy, would
maintain an annual growth of about 7 percent in the next 20
years, supported by increasing production in capital goods.
Iman Taufik, a vice chairman of the Indonesian Chamber of
Commerce and Industry, acknowledged that Indonesia still suffered
a deficit of US$15.2 billion in its international trade of
capital goods -- including automotive products and electronics --
in 1995 even though it gained a surplus in its total trade.
According to the Central Bureau of Statistics, Indonesia's
exports reached $45.4 billion in 1995, while its imports were
recorded at $40.6 billion, thereby resulting in a trade surplus
of $4.8 billion.
Iman said the country's exports of oil and gas, plywood, pulp
and paper, natural rubber and palm oil products were the main
contributors to the trade surplus.
"Malaysian business communities are therefore invited to
strengthen cooperation in the capital goods industry in
Indonesia," he said.
According to Malaysian Industrial Development Authority
chairman Tan Sri Zainal Abidin Sulong, Malaysia's industrial
activities had moved toward the industrial sectors with high
technology.
"Malaysia's business sector is more capital intensive rather
than labor intensive," he said, adding there were opportunities
for both countries to cooperate in the capital goods industry.
Based on data, between January and November 1996, Malaysian
investors were committed to investing in 145 projects worth $3.89
billion in various sectors, such as telecommunications, financial
services, agribusiness, manufacturing, property and
infrastructure development.
According to Iman, who is also president director of PT
Gunanusa Utama Fabricators, the Indonesian government is
currently planning to strengthen the domestic capital goods
industry through the promotion of joint ventures with foreign
companies as well as developing human resources and development.
He said there were currently around 750 Indonesian companies
producing machinery, equipment and spare parts with total
installed capacity of about 400,000 tons annually. In addition,
37 enterprises were engaged in providing engineering services.
He also said Indonesia would need a total investment of $200
billion for the development of infrastructure, $50 billion in the
oil and gas sector and $450 billion in non-oil industries to
maintain an annual economic growth of 7 percent in the coming 10
years.
Meanwhile, chairman of Lippo group James T. Riyadi and
chairman of PT Gemala Group Sofyan Wanandi said yesterday that
opportunities were plentiful for Indonesian and Malaysian
businesspeople to form partnerships but both governments were
expected to introduce more supportive rulings.
They said businesspeople of both countries needed to seek more
cooperation as neighbors of the same culture.
Both countries could complement each other in many sectors.
Malaysia, which lacks manpower, could relocate its labor-
intensive industries to Indonesia which has plentiful human
resources.
Indonesia, meanwhile, could benefit from Malaysia's developed
financial sector.
"The chances are big. But some government regulations don't
seem supportive," said James.
James criticized the Malaysian government for its policy to
bar foreign investors from investing in the financial sector --
including in banks, securities houses and life insurance -- while
Indonesia has allowed foreign investment in that sector. (10/jsk)