Fri, 20 Jun 2008
From: The Jakarta Post
By Desy Nurhayati, The Jakarta Post, Jakarta
President Susilo Bambang Yudhoyono has urged stakeholders of industrial zones to improve their services in order to enhance the country's competitiveness in the manufacturing sector.

During the opening event of the Indonesian Industrial Zones Association's meeting Thursday, the President requested close cooperation between the association and the government in improving the business environment.

"Our industrial zones have improved in the last four years, but we still have much to do, including accelerating infrastructure development, easing bureaucracy, upholding an accountable tax system and maintaining security order," he said.

In a bid to forge better cooperation and coordination between stakeholders, the President urged Industry Minister Fahmi Idris to expedite the drafting of industrial zone regulations, to be completed within the next two months.

According to the President, the industrial zones contributed 70.6 percent of the country's total export revenue for the non-oil and gas sector, or around US$46.92 billion last year.

It is estimated to provide some 900,000 jobs this year, double the 2004 figure of 400,000, he said.

"Manufacturers in industrial zones benefit local people by creating more jobs and community development," he said.

There are 86 industrial zones nationwide, comprising 6,350 factories on 31,956 hectares of land over 13 provinces. The industrial zones employ about 880,500 workers, according to the Trade Ministry.

"Although the government has done its best to speed up infrastructure development, overcome security problems and improve legal certainty and an authorization system, we are yet to see significant results," said the President.

Lack of roads and a low power capacity have hindered service improvement in industrial zones.

In spite of allocating Rp 32.7 trillion ($3.55 billion) for highways, bridges and dams this year, the government has been unable to boost improvements in infrastructure, primarily due to delays in budget planning and spending.

During the ceremony, the President also renewed pledges to ease red tape processes and urged local administrations to cut unnecessary bureaucracy that might discourage investment.

Finance Minister and acting Coordinating Minister for the Economy Sri Mulyani also called on businesspeople not to worsen the bureaucracy by giving kickbacks to state officials in exchange for speeding up the process.

The President also asked the police to improve security conditions in the industrial zones by eliminating intimidation and illegal fees.

"How can we be efficient and have a low-cost economy if intimidation and illegal fees are still everywhere?" he said.

"Sometimes I want to get on a truck to Surabaya and disguise myself in sunglasses and a fake moustache just to find out what practices go on, but of course my ministers and security guards won't let me do so," he joked.



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