Invisible costs discourage investors<\/p>\n
By Arif Suryobuwono<\/p>\n
HONG KONG (JP): Indonesia remains an appetizing investment
\ndestination for the Hong Kong business community, but long
\nstrings of invisible costs have left a bad taste, says an
\nofficial of the Indonesian Consulate General.<\/p>\n
Economic affairs consul Fadillah H. Nurwawi said here that
\npayoffs, starting with airport customs officers and reaching down
\nto neighborhood community offices near the investment projects,
\nmake it difficult for Indonesian officials to convince Hong Kong
\ninvestors that investing in the country is not a headache.<\/p>\n
\"It is our job here to attract as many Hong Kong
\nbusinesspeople as possible to invest in Indonesia, but words
\noften stick in our throats when the investors confront us with
\nthe ugly costs,\" Fadillah said.<\/p>\n
Fadillah said examples of the invisible costs varied from
\nbribes demanded by local Army officers to the cost of waiting
\nyears for import tax refunds worth millions of dollars.<\/p>\n
He said although Hong Kong investors basically look for low
\nlabor costs, they would rather pay the yearly wages hikes than
\nthe invisible costs of corruption.<\/p>\n
Compared to the invisible costs, the increase in labor wages
\nis minimal, Fadillah added.<\/p>\n
His comments were made in connection with a one-day seminar
\nbeing held today at One Pacific Place to discuss investment
\nopportunities in Indonesia and the current investment
\nenvironment.<\/p>\n
Indonesian State Minister of Investment\/Chairman of the
\nInvestment Coordinating Board (BKPM) Sanyoto Sastrowardoyo will
\ntell seminar participants about the latest deregulation package
\nand economic development in the country.<\/p>\n
Sanyoto will be accompanied by 17 Indonesian businesspeople
\nlooking for Hong Kong partners to set up joint ventures in
\nIndonesia. The keynote speaker from Hong Kong will be Patrick
\nK.K. Tang, executive chairman of KTP Holdings Ltd.<\/p>\n
Tang's company operates in Bekasi, West Java, under the name
\nKong Tai Indonesia. It produces shoes and employs 11,000 workers.<\/p>\n
The seminar is jointly organized by the consulate general,
\nBKPM and the Chinese Manufacturers' Association of Hong Kong.<\/p>\n
Fadillah said Sanyoto might announce the government's plan to
\nintroduce another deregulation package next month.<\/p>\n
Fadillah said the invisible costs will soon make it hard for
\nIndonesia to compete against Vietnam, Myanmar and East European
\ncountries, all of which offer generous incentives to investors.<\/p>\n
From 1967 to May 4 this year, Hong Kong, with accumulative
\ninvestment commitments of US$18.0912 billion in 343 projects,
\nranked the third largest investor in Indonesia after Japan
\n($31.4678 billion in 853 projects) and Britain ($23.0825 billion
\nin 187 projects).<\/p>\n
Most Hong Kong investments are in the textile industry (55
\nprojects), the metal industry (36 projects) and trading (35
\nprojects).<\/p>",
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"sponsor": "Okusi Associates",
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