RI doesn't need 'large investments'

RI doesn't need 'large investments'

JAKARTA (JP): Indonesia does not need large scale investments
within the next five years as most companies were still operating
below their production capacities, a senior minister said on
Tuesday.

Minister of Industry and Trade Jusuf Kalla said many
production facilities remained idle despite an increase in
production levels.

Kalla said sectors, which were still unable to operate at full
capacity, included hotels and the chemical, steel and textile
industries.

He said the country's production capacity utilization level at
manufacturing companies increased to 55 percent this year from 45
percent last year.

This year's production level was still below the average of 69
percent recorded in 1996.

Kalla said many manufacturing companies had to cut their
production levels not only due to lower demands but also due to
liquidity problems resulting from the country's worst ever
economic crisis.

He said the impact of the crisis would likely linger for the
next two or three years because local financial institutions were
still unable to extend loans, especially to large-scale
industrial projects.

He said the government preferred businessmen to invest in
small and medium-scale companies, especially those which focused
their production on exports.

"Prospects for new, large investments in small and medium
scale industries is very good," he added. (cst)