Aussie investors still keen on RI: IABC

Aussie investors still keen on RI: IABC

Adianto P. Simamora
The Jakarta Post
Jakarta

Australian investors are still eager to invest in
Indonesia, but the government must swiftly take action to resolve
pressing problems in doing business here, the Indonesia-Australia
Business Council (IABC) said.
ABC chairwoman Elly Hutabarat said that both existing
Australian investors and prospective ones had temporarily delayed
their plans due to the unfavorable investment climate.
"They are now waiting for the government to seriously
tackle the long-standing problems," Elly told The Jakarta Post.
Legal uncertainty and poor implementation of regional
autonomy are among the problems, she said. "We actually have good
laws, but enforcement is weak."
Elly said that Australian investors expected the
government to implement the concept of equality before the law
for both domestic and foreign investors.
Despite the ups and downs in political relations between
the two countries, bilateral trade and investment have remained
strong.
Australia is one of Indonesia's largest foreign
investors. Today, there are about 400 Australian companies
operating across the country with total investment of about A$6
billion (Rp 3.1 trillion).
The majority of investment is in mining, financial
services and beverage sectors.
In 2002, the value of bilateral trade in goods and
services totaled A$9 billion, with Indonesia enjoying a trade
surplus of A$1.4 billion.
The Indonesian government has said it plans to double
trade value between the two countries to A$15 million in the
coming years.
The government has repeatedly promised to work hard to
resolve various pressing problems to prevent existing investors
from fleeing the country.
The year 2003 has been declared the Investment Year, a
campaign aimed at restoring investor confidence in the country
since it plunged into a political and economic crisis in 1998.
Elly said Indonesia lagged behind its neighbors in
attracting investment. "Neighboring countries are now intensively
offering attractive packages to investors, such as tax
incentives. But we offer nothing."
She advised the government to establish a special public
relations unit to help promote the country among global
investors.
"This is one of the ways to help regain investor
confidence. It will campaign for all the policies and actions
already taken by the government to improve the investment
climate."
Elly added that cutting down on bureaucracy and speeding
up investment licensing procedures were also crucial.
The central government must also supervise implementation
of regional autonomy, she added, as local governments were
implementing regulations that scared away investors.
Jakarta has often blamed regional governments for the
sharp decline in investments in the country. Many of the local
administrations, suddenly invested with far-reaching powers, have
been accused of squeezing investors with new revenue-seeking
policies.

1