ABSTRACT
There is anxiety over the near exclusivity of Japanese interests in major Indonesian exports and the increasing dominance of Japanese investment in parts of secondary industry. The disenchantment with foreign investment did not commence with the plunder of timber resources or with the displacement of national textile enterprises. The first source of hostility to the government's economic strategy arose over the prolonged liquidity crisis which was still affecting (non-export oriented) domestic productive capacity when the first foreign investments were being approved. Disenchantment with foreign investment had always existed but vocal opposition was better tolerated by the government earlier on. All future foreign investment has to be in the form of joint ventures with an indigenous Indonesian partner. If Japan's declining interest in Indonesian oil continues, if Japan steps in to finance Chinese technological expansion, and if mass purchasing power in Indonesia fails to grow, predictions of new massive Japanese investment in Indonesia may prove excessive.
