RI remains attractive to foreign investors: Sanyoto

JAKARTA (JP): Foreign investors still see Indonesia as an attractive site for investment despite the economic crisis, State Minister of Investment Sanyoto Sastrowardoyo said yesterday.

Sanyoto said as many as 54 foreign investment projects worth US$3 billion were approved last month alone.

His office is studying another 97 foreign investment projects for approval.

"The foreign projects (approved last month) are long-term projects and investors believe Indonesia will be able to cope with the economic crisis in the not too distant future," he said after a meeting with President Soeharto at his residence on Jl. Cendana, Jakarta.

Sanyoto estimated that the number of foreign investment projects to be approved this month would be about the same as last month.

He added domestic investment approvals remained high last month totaling Rp 9.6 trillion ($800 million) in value with 49 projects.

Last year, foreign investment approvals rose 13 percent in value to $33.8 billion but declined 11.4 percent in terms of the number of projects to 790.

Last year's domestic investment approvals totaled Rp 119.9 trillion with 718 projects.

"These figures show that foreign investors still believe in Indonesia's prospects and think the current economic crisis is only temporary in nature," the minister said.

The monetary crisis, which hit Indonesia in early July, has slashed the value of the rupiah by over 75 percent, causing uncertainty in almost all business activities.

Mining

Sanyoto, who is also chairman of the Investment Planning Board, said the President approved 80 mining contracts of work (COWs) last week, 72 to mine mineral deposits and eight to develop coal deposits.

The 72 mineral COWs and the eight coal COWs are respectively parts of the seventh generation mineral COWs and the third generation coal COWs that were approved by the House of Representatives last year after months of discussion.

Differing from investment in other sectors, the existing law requires that foreign investment in the mining sector be approved by the House before being approved by the President.

Applications for the seventh generation mineral COWs and the third generation coal COWs were filed in 1996.

The government initially received 164 applications for the seventh generation mineral COWs and 12 applications for the third generation coal COWs.

As the House reviewed the contracts, 31 companies withdrew their applications due to financial difficulty or failure to find enough resources in their proposed contract areas.

The House approved the remaining 145 applications.

An informed source at the Ministry of Mines and Energy said, however, the President later asked the ministry to reduce the number to 80 in line with the government retrenchment program to cope with the current economic crisis. (jsk/prb)