ASEAN growth areas need govt backing: Kadin
JAKARTA (JP): Members of the Indonesian Chamber of Commerce and Industry (Kadin) called on the government yesterday to issue limited deregulatory measures to support business activities in the growth areas of ASEAN.
Chamber member Fadel Muhammad said that the provincial administrations involved in the growth areas should be authorized to issue investment licenses.
"Only with such a measure will the development of business activities in the growth areas be accelerated," he said.
Over the past five years members of the Association of South East Asian Nations have developed three subregional growth areas to facilitate business activities in their bordering areas.
The first growth area is called the Indonesia-Malaysia- Singapore Growth Triangle, or Sijori, integrating Indonesia's province of Riau, the Malaysian state of Johor and Singapore.
The second is the Indonesia-Malaysia-Thailand Growth Triangle, connecting North and West Sumatra in Indonesia, the southern provinces of Thailand and western states in Malaysia.
The Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area is the latest, grouping the provinces of Central and South Kalimantan as well as Central, South and Southeast Sulawesi in Indonesia; Sarawak of Malaysia; and the southern provinces of the Philippines and Brunei.
Business activities on the islands of Batam and Bintan, part of the Sijori cooperation area, have increased rapidly over the last five years due to the Indonesian government's strong backing. Domestic investors and those from Singapore and Malaysia receive special tax treatment from Indonesia. In addition, the procedures for obtaining investment licenses in the two provinces are reportedly no longer a problem because the government has established a special body to serve investors.
The investment climate and trade activities in the other two growth areas are much different. Many business memoranda have been stalled due to difficulties in obtaining investment licenses.
Two years ago, businesses in Kalimantan and their partners from Malaysia, Brunei and the Philippines signed 12 memorandums of understanding (MOU) to carry out joint business activities on the island.
Ruben Tumade, the chairman of Kadin's East Kalimantan chapter, said that only one of the 12 business memoranda has been realized due to the difficulty of obtaining investment licenses.
"It's sad if we have to spend two years just to get a license," he told a business consultation forum.
Ruben said the delays occurred because all the investment licenses, especially those applied for by foreign investors, need to be approved by the Investment Coordinating Board (BKPM) in Jakarta.
The forum, which was opened by Coordinating Minister for Production and Distribution Hartarto, was held by Kadin to encourage business activities in the subregional cooperation centers.
Other provinces involved in the growth areas have had similar problems.
Other participants at the forum complained that the government was just paying lip service and not supporting the areas.
They said that the Indonesian government has been much slower than its regional partners in reacting to the needs of business.
"The Philippine government has been much faster in this case," said a businessman from Manado, the capital of North Sulawesi.
In addition to lowering tariffs, the Philippine government no longer imposes a travel tax on businesspeople traveling to those provinces linked to the subregional cooperation centers, he said. (hen)