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uropean businesses are still keen to invest in Indonesia even though it has yet to sign a free trade agreement (FTA) with the European Union (EU), an executive of a European business association says.

Senior adviser at the international relations department of Businesseurope, an association representing 40 central industrial and employers’ federations from 34 European countries, Pascal Kerneis, said Tuesday that European companies were highly interested in Indonesia due to its numerous potentials.

“Our industries have many interests in Indonesia, there’s no doubt about that,” Kerneis said after the closing of the 2010 EU-Indonesia Business Dialogue in Jakarta.

The two-day dialogue involved private businesses and government representatives from Indonesia and EU countries in discussing possibilities to enhance economic cooperation in the future.

“The country is so huge and its population ranks fourth largest in the world,” Kerneis said.

“Jakarta and its surrounding places alone form a big market for European products.”

Kerneis cited automotive, textiles, infrastructure and pharmaceutical industries as well as infrastructure projects as areas in which European companies were keen to invest.

He said European countries could still invest in Indonesia even without an FTA with the EU.

“There are still many things that we can do without the FTA,” he said, adding that both parties could establish a joint agreement and put in some bonds to guarantee investment.

Kerneis said, however, that Indonesia should not limit the foreign ownership to ensure that foreign investors could fully control their investment.

“Many sectors in Indonesia still require equity caps, which are up to 49 percent, and this means that we have to find a local partner,” he said.

This requirement, he said, indicates to foreign investors an inability to control their assets and makes them reluctant to transfer their technology. (lnd)