GE pinning high hopes on Indonesian economy

Benget Simbolon Tnb., The Jakarta Post, Jakarta

Despite Indonesia having yet to fully recover from the financial crisis, and bedeviled by seemingly intractable problems with the legal system and bureaucracy, giant multinational General Electric still has high hopes of the country.

"Indonesia is really, I think, the lynchpin of Asean (Association of Southeast Asian Nations). It is the biggest economy in the Southeast Asia region, which is continuing to integrate more and free-trade more," Stuart L. Dean, GE's president for Southeast Asia told The Jakarta Post on Thursday.

But obviously, he said, the financial crisis of the late 1990s had had a much bigger impact on Indonesia than on Thailand and Malaysia.

And burdened with budgetary constraints, the Indonesian government still had limited options at its disposal, thus putting a further brake on the efforts to bounce back.

"But I think it is heading in the right direction."

To accelerate economic growth, he stressed the need for the Indonesia to speed up the development of its infrastructure.

"Every time we meet Indonesian officials and business people, the first thing they say is that Indonesia needs more infrastructure. We hope that we can help Indonesia to build world-class infrastructure," Dean said.

He explained that in the future GE would continue to expand its businesses in Indonesia. "Our chairman is visiting Indonesia this week to really get a chance to see what Indonesia's priorities are and how they align with what we can help with."

Dean said that GE, the world's biggest infrastructure company, was considering expanding into the locomotive construction and biofuel industries in Indonesia.

He said that in 1998, GE had secured contracts to refurbish and upgrade old locomotives belonging to state-owned railways operator PT. Kereta Api Indonesia (PT. KAI). On Thursday evening, GE handed over two refurbished locomotives to PT. KAI.

Dean said that the upgrading of an old locomotive usually cost about US$2 million.

"But we're thinking of making new locomotives in the future. The Indonesian minister of transportation has also said on several occasions that Indonesia needs to expand its railway infrastructure. So they will need new locomotives," he said.

GE has been operating in Indonesia since the 1930s. It has five subsidiaries -- PT. GE Lighting Indonesia, PT. GE Finance Indonesia, PT. Astra Sedaya Finance, PT. GE Technology Indonesia and PT. GE Nusantara Turbine Services -- which trade in a wide variety of fields, including industrial equipment, machinery, aircraft leasing, water treatment, turbine repair and overhaul, consumer finance and credit cards.
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