Jakarta – Indonesia is planning new incentives to raise foreign direct investment after a slump last year, an official said Thursday.

Actual foreign investment last year totalled 50 million dollars compared to approvals of nine billion dollars, said Investment Coordinating Board chairman Theo Tumion.

He told reporters after a cabinet meeting that his office wants more authority to grant investment incentives such as tax breaks. Tumion said at least 11 different government offices have the authority to offer incentives to investors even though a presidential decree gives such power to his board.

His office has also drafted a new bill which will give equal treatment to domestic and foreign investment projects.

In the first two months of this year the government approved 149 foreign direct investment projects worth 489.3 million dollars against 189 projects worth 2.33 billion a year earlier.

The Asian Development Bank, in its annual report released this month, said there was "a widespread perception that the policy environment for investment in Indonesia has turned harsh and unsupportive." Political opposition to privatisation was one symptom.

Approved foreign investment projects totalled six billion dollars in the first ten months of 2001, about one third the total in the same period of 2000, the bank said.

The fall would seem to be "part of the broader, longer-term problem of capital flight seen in Indonesia since the financial crisis," the report said. "Continuing problems of financial governance, lack of credibility of the legal and judicial system and political uncertainty have all discouraged investors from making longer-term commitments."