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SCMP Reporter

ALMOST all sectors of Indonesia's economy are now open for foreign participation, the Minister of Investment, Sanyoto Sastrowardoyo, has told Hong Kong business people.

  Mr Sanyoto was recently in Hong Kong to explain the latest deregulation package announced by the Indonesian Government.

     The new policy was aimed at relaxing the requirements of foreign ownership, divestment and at opening up some public-sector companies to foreign investors.

  Mr Sanyoto briefed Hong Kong business people at a recent Hong Kong-Indonesia investment forum.

  The discussion was jointly organised by the Chinese Manufacturers' Association, the Indonesian Consulate in Hong Kong and Indonesia's Investment Co-ordinating Board.

  Mr Sanyoto is also the chairman of the Investment Co-ordinating Board, known as BKPM.

  He told participants of the forum that joint ventures were now possible in sea ports; power generation and distribution; telecommunications; shipping; aviation; drinking water supply; railways; nuclear power; and mass media.

  He said there would be no more minimum investment levels.

  ''The total investment needed will be determined by assessing the economic feasibility of the project,'' Mr Sanyoto said.

  Direct foreign investment in Indonesia would also be allowed, he said. This meant situations in which all investment capital was held by foreign firms or legal entities.

  Before the changes, foreigners were banned from having full equity in Indonesian ventures.

   In addition, he said the new measures allowed foreign firms to locate their ventures anywhere in the country.

   The minister described the new package, Government Regulation No. 20, as ''the most aggressive and attractive foreign investment policy introduced by Indonesia in the past 26 years''.

  It would place Indonesia a step ahead of its competitors in the region in attracting foreign investment, he said.

  For Hong Kong investors, sectors such as chemicals, textiles and garments, shoes, electronics, metals, real estate and hotels and tourism would be attractive areas.

  ''We have practically opened all kinds of industries for foreign investment, be it for the domestic market or for exports,'' Mr Sanyoto said.

  ''We know that small and medium-scale industries form the backbone of Hong Kong's economy. With the new policy, you are welcome to build investment projects of any size in Indonesia.''   The deregulation measures were made public on June 2.

  Referring to Indonesia's economic development, Mr Sanyoto said the manufacturing industry had grown by more than 10 per cent each year over the past five years.

  Manufactured products accounted for 80 per cent of exports last year.

  He said per-capita income had risen from US$75 in 1969 to US$676 last year.

      The contribution of the agricultural sector to the Gross Domestic Product had declined to about 20 per cent, compared with about 50 per cent in the past.

  Mr Sanyoto said agriculture's contribution to the economy had fallen because the Indonesian economy had diversified in recent years.

    ''Few other countries have made this transition,'' he said.

   As a result of liberalisation in the past five years, foreign investments had ''grown at a respectable pace''.

   Mr Sanyoto said he hoped more Hong Kong investors would take the opportunity to look to Indonesia.

  Towards late last month, after the investment deregulation package was introduced, Indonesia also announced a broad trade liberalisation package.

  This package reduced import duties on many goods.

  Import duties were slashed on more than 730 products, non-tariff barriers were eliminated on 27 commodities and import surcharges on more than 100 import items were removed.



Limits on foreign ownership eliminated