RI wants Australia to triple investments to US$5 billion

SYDNEY (AFP): Indonesian Investment Minister Sanyoto Sastrowardoyo yesterday urged Australia to almost triple its investments in his country to US$5 billion.

Australia had the necessary finance, technology, expertise and marketing capabilities for such an investment.

"Combined with your competitive advantage and our competitive advantage we do believe we can work together, develop together to serve world demand," Sanyoto said.

"At the same time we can strengthen economic bilateral agreement between Australia and Indonesia," he said.

Australia is the 10th largest foreign investor in Indonesia with 143 projects worth $1.5 billion. Some 62 of those projects are in mining.

But it had only a 2.1 percent share of total foreign direct investment in Indonesia, which totaled $70.8 billion.

"That number does not represent the real capability of Australian investment," Sanyoto said.

Japan was the number one foreign investor in Indonesia with $16.4 billion, Hong Kong second with $5.9 billion and Taiwan third with $5.2 billion.

Indonesia had introduced deregulatory measures and last year reduced the number of sectors closed to foreign investment to 14, Sanyoto said.

He said the Indonesian government was preparing to relax regulations further with details to be announced in about two months.

Sanyoto rejected claims that foreign investors would be scared off by racial tension which erupted in rioting in Medan, North Sumatra, and claimed one life on Friday.

Workers demanding wage increases rioted and killed a Chinese factory owner, Kwok Joe Lip.

Sanyoto, the first Indonesian investment minister to visit Australia, said the incident was sparked by a wage dispute, Kwok's death was an accident and he hoped "it won't affect anything."