U.S. investors maintain `wait and see' stance

JAKARTA (JP): U.S. investors are continuing to hold off on new investment in Indonesia despite signs of improvement in the country's economy and social conditions, an American trade official said here on Wednesday.

U.S. commercial attache Richard Rothman said American businesspeople needed more time to learn about the economic progress made before becoming involved in new businesses.

"The image of Indonesia is improving. However, the U.S. investors will need time to learn about the business situation here," Rothman said at a news briefing to announce the U.S. government's plan to hold a trade exhibition in Indonesia in July 2000.

He acknowledged that political and social stability as well as economic activities improved significantly following the election of President Abdurrahman Wahid in October, but U.S. businesspeople needed certainty that the promising signs were sustainable.

Ensuring the stability of the rupiah would also serve as a key factor in the return of foreign investors, he added.

The rupiah, which fell to below 10,000 against the U.S. dollar, has strengthened to the 7,000 to 7,500 level in recent months in line with an improvement in the country's economic fundamentals.

He was confident the eight-month-period before the trade show would provide enough time for the investors to gauge the progress in the economy and to learn about the business situation.

"We think that in the next eight months, investors will begin to return to Indonesia."

Many American investors are interested in purchasing the assets of local companies which are currently under the management of the Indonesia Bank Restructuring Agency (IBRA), he said.

The American Product and Hi-Tech Show 2000 trade expo will be held in Jakarta from July 1 to July 4 to commemorate U.S. Independence Day. It will be sponsored by the Commercial Service of the U.S. Department of Commerce in cooperation with Indonesia's Ministry of Industry and Trade, the office of the State Minister of Research and Technology and the Indonesia Exhibition Companies Association.

About 200 companies are expected to take part in the show, which will feature mainly consumer-oriented products. (06)