Kadin asks govt to pay more attention to long-established investors

Jakarta (ANTARA News) - The government should not only favor new investors but also pay attention to old investors with good track records in Indonesia so that they will continue to expand their operations in the country, a senior Indonesian Chamber of Commerce and Industry (Kadin) executive said.

"The government should pay more attention to established investors in the country. The more so, because of the difficulty in attracting new foreign investment," Rachmat Gobel, Kadin vice chairman, said here Thursday.

He made the remarks after the laying of the first corner-stone of PT Panasonic Gobel Battery Indonesia (PGRI)`s second lithium battery plant. Rachmat is the company`s president commissioner.

Noting that most of the world`s major multinational companies engaged in elctronic and automotive industries were already present in Indonesia, he said : "If the government pays more attention to them, I think they will step up their investment in this country. Today, we have seen concrete proof of this."

Rachmat related that after Industry Minister Fahmi Idris paid a visit to the Matshushita battery factory in Japan last November, the Japanese company which is owner of the Panasonic trademark eventually chose Indonesia (from among a number of Southeast Asian countries) as the location of a lithium battery plant whose output would be marketed world-wide.

"In terms of production costs, setting up the plant in another Southeast Asian country, might have been more economical for Matshushita but thanks to our lobbying together with the government, they were successfully persuaded to increase their investment in Indonesia," Rachmat said.

He said he was envious of prospective new foreign investors to whom the government was offering special privileges like incentives although it was still uncertain whether they would really come to Indonensia and feel committed to developing domestic industry.

"Let it not happen that new investors whose commitment is atill unclear are given a `red-carpet` treatment in the form of all sorts of incentives while long-established investors are forgotten. If this happens, the old ivestors may eventually relocate to other countries that offer more attractive treatment," Rachmat said.

He said old investors with good track records should also be given facilities to maintain and develop their businesses in the country. To determine what kinds of facilities and incentives should be granted to old investors, Indonesia could learn from other Southeast Asian countries that are its competitors in attracting foreign investment, he added.

In response to Rachmat`s statements, Industry Minister Gahmi Idris said in a new investment law which was now still in the making, there would be provisions on incentives for pioneer industries producing goods and using technology.

In Government Regulation No 1/2007 the government had also opened the possibility for old investors that expand their operations in certain industries outside Java to enjoy incentives in the form of tax allowances, Fahmi said.

The minster called on industries to report to the government when they use state-of-the art technology in their production processes or are pioneers in the production of certain goods. "If they keep quiet, it will their own fault (if they don`t enjoy the available incentives}," the minister said.