Govt Courts Foreign Investors, with Projects worth $19bn on Offer

JAKARTA ~ President Susilo Bambang Yudhoyono opened a forum on Monday seeking billions of dollars in foreign direct investment to boost employment and growth, amid unease about local barriers to business.

Yudhoyono said the Indonesian Regional Investment Forum aimed to boost the economy of the sprawling archipelago, as organizers said nearly US$19 billion of projects were on offer.

The president said the forum sought to achieve “higher growth through exports and investments, stimulating the real sector to create employment and promoting rural and agricultural development to reduce poverty.”

The gathering in the capital offered opportunities in hundreds of projects scattered across the nation, from agribusiness to the oil, gas, property and tourism sectors.

“We have about 200 projects and they are worth close to $19 billion,” forum organizer Benjamin Tan said. “In the last year we did this, 2006, we had a total of around 20 projects, and this year it has increased tenfold.”

But the conference came amid unease over Indonesia’s investment climate, with clashes between local and national laws and an often arbitrary legal system seen as significant barriers.

Earlier this month a court upheld a heavily criticized ruling by the competition watchdog ordering Singapore-based investment giant Temasek to sell one of its stakes two Indonesian telecom operators.

Critics in both Singapore and Indonesia said the watchdog’s ruling was arbitrary and politically motivated.

“(Indonesia has) a lot of potential. But the main thing is there’s a lot of legal uncertainty, and if that’s sorted out you’ve got everything going,” one Middle Eastern investor at the forum, who declined to be named, said.

“The central government seems to be very positive and so do the regional governors but they have to get their act together,” he said.

A Malaysian businessman at the forum said the investment climate in Indonesia had changed but warned there were still problems.

“I think it is the right moment for investors from abroad to invest in Indonesia,” said Zaenal Shahab, an executive at Malaysia-based Syariah investors Asian Finance Bank.

“The climate has changed … they have kind of opened up to investors, there is more security. (But) I think a lot of the judicial system still needs to be reformed,” he said.

Foreign direct investment in Indonesia reached $10.34 billion last year, 73.2 percent higher than the year before, despite the concerns.

Singapore was the biggest investor, sinking some $3.75 billion into the economy.

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