[Kabar-indonesia] AFR: Top end of town abandons investment in Indonesia

[Joyo at aol.com]

Australian Financial Review
Thursday, November 16, 2006

Top end of town abandons investment in Indonesia

Morgan Mellish, Jakarta

A sharp slump in foreign investment in Indonesia so far this
year has dented hopes South-East Asia's biggest economy is
on the verge of catching up with some of its fast-growing
neighbours.

Foreign direct investment from January through to October
fell 48 per cent to $US4.5 billion ($5.9 billion) compared
to the same period last year, according to government data.

The figures from the state investment agency also showed
actual domestic investment fell 19 per cent to 13.6 trillion
rupiah ($2 billion) over the same period.

"The large projects are just not there at the moment," said
International Business Chamber chairman Peter Fanning.
"Companies are continuing to invest but not at the top end
of town. The essentials are still not in place," he said.

Many companies are still being put off by concerns about
corruption and red tape which make Indonesia a poor choice
compared to some of its regional rivals.

"The easiest infrastructure to get moving is roads, but
we've still got the government unable to find a reasonably
simple solution to land acquisition," Mr Fanning said.

Macquarie Bank, which is bullish on Indonesia, said another
reason investors were staying away was problems with
electricity.

"The drop in FDI and domestic investments realisation,
although disappointing, is quite expected due to the lack of
infrastructure projects in 2006 and the high interest rates
environment," the investment bank said in a note to clients.

------------------------------------------
Joyo Indonesia News Service
------------------------------------------