Investment: Indonesia Waits
Friday, Nov. 10, 1967
Investment: Indonesia Waits
Last week in Geneva, Indonesian Foreign Minister Adam Malik and Economics Minister Sultan Hamengku Buwono faced an extraordinary audience of businessmen.* In a three-day meeting sponsored by Time Inc., top executives of European, Japanese, Australian, Cana dian and U.S. companies gathered to hear just how vital foreign investments can be to the future of Indonesia.
“In your own way, you could help bring about the desired economic and political stability of our country,” said Foreign Minister Malik.
That “stability,” to be sure, is still around the corner. Inflation has been slowed down but still saps the economy. For the first time in more than a decade, efforts have been made to balance the budget; but the austerity measures have not been completely successful. Later this month, Indonesia will have to make a bid for $325 million in aid from such creditors as the U.S., Britain, Australia and Japan. Unemployment is up to 3,000,000 from last year’s 2,100,000, and 15 million people are underemployed. Rice last week cost twice the July price, obliging the government to order $85 million worth abroad.
Unknown Treasure. Nevertheless, several Western firms that had their property taken over by the Sukarno regime see a better economic climate under Suharto and are making plans to return. Among these are Goodyear Tire & Rubber Co. and Lever Bros. Others, enticed by a four-year tax holiday and easy repatriation of profits, are showing interest. The Freeport Sulphur Co. is prospecting for copper and stands ready to invest $75 million if sufficient ore is found. ITT has signed a $6,000,000 contract to build a satellite relay station near Djakarta.
But far more investment is needed. Said the Sultan of Jogjakarta in Geneva to the businessmen: “The popular world view is that Indonesia is a treasure house of resources. I may inform you in all frankness that nobody—and that includes ourselves—knows exactly the wealth we have in and on the ground and in our seas. Indonesia is waiting for you to bring your advanced technology, your experience, your capital and your entrepreneurial spirit.”
* A sampling: Gianni Agnelli, chairman, Fiat; George W. Ball, chairman, Lehman Bros. International; Eugene Black, director, Chase Manhattan Bank; Norton Clapp, chairman, Weyerhaeuser Co.; Howard L. Clark, president, American Express; Russell R. De Young, chairman, Goodyear Tire & Rubber Co.; Floyd D. Hall, president, Eastern Airlines; Robert V. Hansberger, president, Boise Cascade; John D. Harper, president, Aluminum Co. of America; Earl B. Hathaway, president, Firestone Tire & Rubber Co.; H. J. Heinz II, chairman, H. J. Heinz Co.; Robert C. Hills, president, Freeport Sulphur Co.; Edward B. Hinman, president, International Paper Co.; Dr. Koji Kobayashi, president, Nippon Electric Co.; Rudolph A. Peterson, president, Bank of America; Frederik Jacques Philips, president, N. V. Philips’ Gloeilampenfabrieken; David Rockefeller, president, Chase Manhattan Bank; Dr. Samuel Schewizer, chairman, Swiss Bank Corp.; Dr. Gerd Tacke, director, Siemens A.G.; Abderrahman Tazi, executive director, International Bank for Reconstruction and Development; Henry S. Wingate, chairman, International Nickel Co. of Canada.
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