GOVERNMENT ATTITUDE TOWARD FOREIGN CAPITAL INVESTMENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83-00423R000500470002-3
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 2
• Document Creation Date: November 9, 2016
• Document Release Date: February 18, 1999
• Sequence Number: 2
• Publication Date: April 23, 1953
• Content Type: REPORT

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Apprbverj1For Release 1999/09/10: CIA, . DP8 - 005004700
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25X1X6
Country: Indonesia
Subject: Government attitude toward foreign capital investment.
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Supplement to Newsletter No. 10/53?
Chairman of the Dewan Ekonomi Indonesia Pusat (DEIP) on
foreign capital investments.
In connection with the forthcoming government statement on foreign
capital investment in Indonesia "P.I.Aneta" had an interview recently with tk
the chairman of the Central Economic Board, Mr. Tedjasukmana. The chair-
man said that it could be expected that this statement would appear very
shortly, which would outlinethe scope and fields in which foreign capital
would be welcome,is,according to Mr.Tedjasulana, to be construed as being
intended for "prospective investors" abroad. The chairman of the DEIP
thought however, that it again necessary tp point out that Indonesia no
longer has any great powers of attraction for capital in international
markets. Nor will a "statement" alone bring about much change in the
situation.
Every owner of capital, whether or not Indonesian, takes facts
into account, and if the government is seriously planning to attract
capital from abroad, then, according to Mr. Tedjasukmana, it is a good
thing to remind them of these facts again.
Everyboby seems to be convinced that the saatement will be
acceptable, as far as the regulations with regard to the possibilities
of transfer of profits, periods of depreciation, taxation, etc. are
concerned. However, the potential foreign investor looks even farther
ahead. He watches primarily the stability, continuity, and fundamental
principles underlying the government's policies. In the first place,
every investor will try to ensure a certain degree ofhsafetye artic arly
with regard to the fact that government regy of an
unchanging nature, and not subject to the whim of every new minister
or Cabinet, which later may come into power. "It is necessary therefore
that definite regulations are laid down by law" said Mr. Tadjasukmana.
Furtrmore, once these regulations have become kaw, the type
and number of inquiries which the authorities will receive will be of
great importance. An infamous law bureaucracy should be very carefully
avoided. Objectivity, Elasticity and Service will be expected from
officials in charge of such matters. The "prospective investors" must
not be frightened off on first acquaintance, by the departments they
will have to deal with later on.
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According to Mr. Tedjasukmana, the labor policyis of paramount
importanve. Every modern investor is convinced of the necessity for
social welfare facilities, reasonable wages, family allowances, health
schemes, recreation possibilities for the workers, as well as old age
pensions. But the foreigninvestor of today asks himself rather uneasily
whay kind of labor policy will a new state, and certainly Indonesia,
be likely to favor.
The Chairman was of the opinion that after three years of
self-government, Indonesia would certainly be expected have plans on
the Statute Book calaulated to remove all uncertainties on this point.
This should be done in the form of labor statutes, details of which were RM
now available from the results of the arbitrary commissions, which had
been set up for solving labor differences. As far as conditions govern-
ing the employment of Indonesian labor in the higher branches of
foreifn business is concerned, Mr. Tedjasulnana was of the opinion
there would be few objections to this.
He thought it most necessary to make it quite clear, from
the start, what was meant by Indonesian capital; particularly with
reference to the conditions under which Indonesian capital would
also take an increasing part in the new opportulities for business.
Approved For Release 1999/09/10: 1WWIDI 0470002-3