Jan 28 (Reuters) - Institutional reforms by Indonesian President Susilo Bambang Yudhoyono in his second term are seen as critical to spurring investment in Southeast Asia's largest economy. Here are some facts about the political system and policy making in Indonesia: PARLIAMENT AND PRESIDENT The President is the head of state and head of government and, along with the vice president, is elected in a direct presidential election as in the U.S. system. A separate election is held for parliament.

Indonesia’s 100 worst tax-dodgers, including a slew of state-owned enterprises and some well-known private and listed companies, owe the state nearly $1.9 billion in back taxes, the Finance Ministry revealed on Thursday. “As of December 2009, the 100 top tax-dodgers [owed] Rp 17.5 trillion,” Tjiptardjo, the ministry’s tax chief, told a hearing with the House of Representatives’ Commission XI, which oversees finance.

The government is drafting incentives meant to develop value-added industries that process agricultural products, Industry Minister MS Hidayat said on Thursday. “I have already informed the Ministry of Finance, and they have agreed to fiscal incentives for companies processing raw [agriculture-based] materials,” Hidayat said in Jakarta. He said the development of downstream industries would increase employment and contribute more to the economy than the simple export of raw materials.

President Susilo Bambang Yudhoyono has promised that Indonesia’s power crisis will end this year. Yudhoyono said on Thursday that he had released a presidential decree and supporting regulations to ensure his promise will be kept. “The goal will be reached by buying excess power from factories, expanding PLN’s [PT Perusahaan Listrik Negara] transmission and distribution network, and encouraging private producers to develop more power plants,” he said.

Indonesia looks increasingly like a worthy member of the economically enviable “BRIC” group of nations, following this week’s upgrade of its sovereign debt and a nod of recognition from influential global asset manager Templeton Asset Management After boasting Asia’s second-best performing stock market last year, the country may be ready for full-fledged membership in the BRIC group of major emerging nations, Templeton said.

It is hoped that private companies backed by private investors may be able to start to build up to 150 new power plants to provide up to 1,000 megawatts (MW) of electricity nationwide, to help cope with the frequent blackouts in the country. State SOE Minister Mustafa Abubakar said Thursday that state-owned electricity utility PT PLN would cooperate with the private sector to help push forward a major expansion of small power stations especially in the provinces.