Govt rolls out red carpet for investors<\/p>\n
Fabiola Desy Unidjaja and Zakki P. Hakim, The Jakarta Post, Jakarta<\/p>\n
President Susilo Bambang Yudhoyono promised foreign investors on
\nMonday a much better investment climate as the government aims to
\nlure a whopping US$120 billion in new investment for the
\ndevelopment of roads, power plants and other crucial
\ninfrastructure facilities over the next five years.<\/p>\n
He said the government planned a \"new partnership\" that would
\nhelp ensure legal certainty for investors and aimed to eliminate
\ndistortions to investment and economic activities through
\nimproved tax and fiscal policies, an efficient and effective
\nadministration and higher economic competitiveness.<\/p>\n
\"We'll eliminate obstructions that have impeded investment and
\neconomic activities,\" Susilo said at the opening of the two-day
\nInfrastructure Summit, which nearly 600 domestic and foreign
\ninvestors attended.<\/p>\n
He explained that the lack of infrastructure in the country --
\nas a result of years of neglect since the 1997 regional economic
\ncrisis -- had led to, among other things, long traffic jams,
\npower outages and bottlenecks at seaports, all of which hampered
\neconomic activities and increased the cost of doing business
\nhere.<\/p>\n
The government has said it would need around $145 billion for
\nthe development of various infrastructure facilities on top of $4
\nbillion for infrastructure in tsunami-ravaged Aceh.<\/p>\n
Some $25 billion, or 17 percent of the funding needed, is
\nexpected to come from the state budget; $30 billion from domestic
\nfinance institutions; $10 billion from foreign donors; and the
\n$80 billion bulk from private and foreign investors.<\/p>\n
During the investment forum, the government offered 91
\ninfrastructure projects worth $22.5 billion to foreign and
\ndomestic investors. The government will start the bidding process
\nin February.<\/p>\n
Coordinating Minister for the Economy Aburizal Bakrie said the
\nnext batch of infrastructure projects worth $57.5 billion would
\nbe offered in November.<\/p>\n
He previously said that investment in the infrastructure
\nsector would generate a healthy investment return of between 15
\nand 23 percent.<\/p>\n
Fixing the infrastructure sector is crucial to help the
\ncountry enjoy higher economic growth of at least 6 percent per
\nyear, the minimum growth level needed to help resolve the chronic
\nunemployment problem. The largest Southeast Asian economy has
\nbeen growing at an average of around 4 percent over past years as
\ninvestors have been reluctant to pour in new money due to a
\nvariety of reasons, including legal uncertainty, security
\nconcerns, corruption and the threat of terrorism.<\/p>\n
Susilo said the country's failure to rebound from the 1997
\nfinancial crisis was partly due to its poor infrastructure, which
\ndiscouraged badly needed new investment.<\/p>\n
Some 45 percent of households in Indonesia have no
\nelectricity. The country also has the lowest telephone access
\nrate in the Asian region, with only four out of 100 Indonesians
\nhaving ready access to telephones.<\/p>\n
Meanwhile, Dutch water company Waterleidingmaatschappij
\nDrenthe director KJ Hoogsteen told The Jakarta Post that the
\ngovernment's presentation was quite promising, although he would
\nneed to see how the policies promised would be implemented.<\/p>\n
\"I'm looking forward to seeing how will it fix the legal
\nframework in the water supply sector, as many of the regulations
\ncontradict each other,\" he said on the sidelines of the summit.<\/p>\n
Foreign players in the water supply sector have complained of
\nlegal uncertainty as bylaws issued by local administrations often
\ncontradict central government rulings.<\/p>",
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"sponsor": "Okusi Associates",
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