Violence, legal doubts repelling investors: WB<\/p>\n
Agence France-Presse, Jakarta<\/p>\n
Violence and legal uncertainty are the main stumbling blocks
\nin Indonesia's push to attract the foreign investment it needs
\nfor economic growth, a World Bank official said Thursday.<\/p>\n
\"Currently many investors are frightened away by the inability
\nof the judicial system to enforce contracts (and) by the
\nincreased tendency to resort to violence to settle disputes,\" the
\nbank's country director Mark Baird told a seminar here.<\/p>\n
\"Indonesia cannot achieve a sustained growth rate of five to
\nsix percent per annum without significant amounts of new
\ninvestment and this will only happen if the policy environment is
\nwelcoming to new investment,\" he said.<\/p>\n
Baird said investor confidence could be restored by setting a
\nclear framework for reform and taking \"credible steps\" in the
\nright direction.<\/p>\n
Minister of Finance Boediono has predicted the recovery in the
\nglobal economy should help Indonesia top 3.3 percent in economic
\ngrowth in 2002, up from an earlier forecast of 3.0 percent.<\/p>\n
The government's move to decentralize and leave decision
\nmaking to the regions has given rise to a plethora of overlapping
\nregulations, taxes and levies, with many critics saying local
\ngovernment greed was discouraging investment in the region.<\/p>\n
The Asian Development Bank said last month that there was \"a
\nwidespread perception that the policy environment for investment
\nin Indonesia has turned harsh and unsupportive.\"<\/p>\n
A U.S. district court has declared Indonesia's state energy
\ngiant Pertamina to be in contempt of court after it used a
\nJakarta court to contest a US$261 million damages award against
\nit by an international arbitration panel.<\/p>\n
The judgment, over a canceled power plant project, was in
\nfavor of U.S.-controlled power firm Karaha Bodas.<\/p>\n
In another legal wrangle, the South Jakarta district court
\nlast month issued a ruling sequestering the assets of PT Kaltim
\nPrima Coal (KPC) following a $776 million lawsuit filed by the
\nEast Kalimantan administration.<\/p>\n
KPC, equally owned by Anglo-Australian Rio Tinto mining group
\nand British-American energy giant BP Plc., operates a vast coal
\nmine in East Kalimantan.<\/p>\n
The region's government accused KPC of deliberately delaying
\nits obligation to divest its 51-percent stake to local buyers.<\/p>\n
The World Bank's Baird said a strong global economy might help
\nIndonesia maintain an economic growth rate of three to four
\npercent this year but the country would have to do much better if
\nit wanted to reduce poverty.<\/p>\n
He said the government of President Megawati Soekarnoputri
\nshould be praised for what it has achieved over the past six
\nmonths.<\/p>\n
\"However there's no room for complacency. Continued policy
\ndiscipline is essential to protect the recent gains on macro-
\neconomic stability and more progress on reform shall be needed to
\nattract new investment and support the current rate of economic
\ngrowth.\"<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/violence-legal-doubts-repelling-investors-wb-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}