Development of the eastern region<\/p>\n
The choice of Biak, Irian Jaya, as the pilot project for the
\neastern region's comprehensive development program is laudable.<\/p>\n
The tax incentives and liberal regulatory procedures will most
\nlikely woo domestic and foreign investors. Besides the program,
\nthe government should probably also think in terms of:<\/p>\n
* Cost of communication. Communication is vital for national
\nunity. Today, a one-minute telephone call to the far eastern
\nregion costs about Rp 1,650, plus PPN (value added tax).<\/p>\n
In the developed world, relentless technological changes are
\ndriving down the cost of telephone calls, and a call from London
\nto New York costs virtually the same as carrying it from one
\nhouse to the next.<\/p>\n
If the cost structure is similar in Indonesia, it is probably
\ntime for a retrospection of the policy of distance-based charges
\nby telephone companies. With increasing affluence, people in
\ncities here are spending more time making telephone calls.<\/p>\n
When the affordability of the people and businesses of the far
\neastern region are taken into consideration, there seems to be a
\nsocial and business justification for economical pricing of long
\ndistance calls. This will make it possible to provide distant
\nareas with many of services in terms of information and develop
\nin these regions.<\/p>\n
* Subsidized air transportation to this region.<\/p>\n
* \"Investment allowances\" to companies operating in the
\ndeveloped region for investments in the far eastern region. When
\nexisting companies diversify and expand their operations and
\ninvest in industries in the identified backward regions, they may
\nbe allowed to claim investment allowances against the payment of
\nincome taxes from the profits of existing companies; the
\nallowances depending on the level of the region's prosperity and
\nthe type of industry.<\/p>\n
* Substantial reductions\/waivers in the personal income taxes
\nof executives taking up jobs in this region.<\/p>\n
* Ease in employing expatriates and waiver of expatriate-
\nrelated costs.<\/p>\n
Probably, benefits such as these are investments by the
\ngovernment which, in turn, will bring much higher returns to the
\nexchequer in the long run. These benefits would offset capital
\ncosts and the cost of doing business in these regions and attract
\ndomestic and foreign investors.<\/p>\n
D. PRABHAKAR<\/p>\n
Jakarta<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/development-of-the-eastern-region-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }