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)