High costs discourage investment: Deiss<\/p>\n
Zakki P. Hakim and Riyadi Suparno, The Jakarta Post, Jakarta<\/p>\n
High costs in the Indonesian economy remain the main barrier to
\nattract foreign investment, including investors from Switzerland,
\naccording to visiting Swiss Minister of Economic Affairs Joseph
\nDeiss.<\/p>\n
Speaking to journalists here on Monday, Deiss said that a
\nsurvey of Swiss businessmen in Indonesia revealed that they find
\ninvestment here promising, but they also continue to encounter
\ninnumerable problems investing here.<\/p>\n
Lack of protection for intellectual property rights is one of
\nthe main problems, Deiss said, noting that the presence of so
\nmany counterfeit products here discourages foreign investors.<\/p>\n
Also, the continuing poor law enforcement has been driving
\naway foreign investment.<\/p>\n
The next problem is related to governance in the public
\nsector, especially the inefficient bureaucracy.<\/p>\n
\"To acquire a business license, for example, it takes about
\n150 days now. The government has realized this problem and has
\npromised to reduce it to 30 days at most,\" Deiss said.<\/p>\n
He added that he raised these concerns of Swiss businessmen
\nduring his meeting with various government officials, including
\ntrade minister Mari E. Pangestu.<\/p>\n
Deiss also noted that many Swiss-based multinational companies
\nwere interested in investing in the country, especially following
\nthe positive improvement after the reform movement that brought
\ndown the corrupt New Order administration.<\/p>\n
However, democratization itself is not enough, this must be
\nfollowed by reform in the bureaucracy and improvement in
\nsecurity, he said.<\/p>\n
Basically, he said Switzerland's private sector would invest
\nin places that promised the best earning and met the five basic
\nrequirements to attract investment.<\/p>\n
They include available estate and grounds to do business,
\nflexible labor market, availability of adequate infrastructure,
\ndomestic security and safety and efficient tax system.<\/p>\n
\"In order to compete with other countries like China,
\nIndonesia must overcome at least four of the five issues,\" he
\nsaid.<\/p>\n
Swiss direct investment in the country has reached more than
\n$1.5 billion in Indonesia. The country of 7.3 million is among
\nthe 20 largest foreign investors and approximately 100 Swiss
\nfirms and joint ventures are operating in the country.<\/p>\n
Among its top firms in the country are Nestle, Roche,
\nNovartis, Clariant and ABB.<\/p>\n
Aside from promoting investment, Minister Deiss also aimed to
\nboost bilateral trade, which has been declining since before the
\nfinancial crisis.<\/p>\n
\"Trade between the two countries has been considerably low
\nsince the 1997 crisis,\" he said.<\/p>\n
According to data from the Swiss government, Switzerland's
\ntotal exports to Indonesia stood at 286 million Swiss franc
\n(US$343 million) last year, down from 289 million franc in 2003
\nand 381 million franc in 1997.<\/p>\n
Imports from Indonesia meanwhile were valued at only $157
\nmillion franc last year, compared to 167 million franc in 2003
\nand 179 million franc in 1997.<\/p>\n
\"To at least reach a trade level we had before the 1997
\ncrisis, it is important for Indonesia to promote its exports in
\nthe Swiss private sector,\" he said.<\/p>\n
Indonesian exports to Switzerland are mainly textiles,
\ngarments, agricultural products, footwear and furniture.<\/p>\n
To boost bilateral trade, Switzerland, along with three other
\ncountries in the European Free Trade Association (EFTA) --
\nNorway, Iceland and Liechtenstein -- is pursuing a free trade
\nagreement (FTA) with Indonesia and other countries in the region.<\/p>\n
\"If we could do it at the multilateral level of the World
\nTrade Organization, it would be best. But bilateral negotiations
\nwould certainly bring benefits for both sides,\" he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/high-costs-discourage-investment-deiss-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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