Australia and RI promise more incentives for AIDA

By Riyadi

AMBON, Maluku (JP): Indonesia and Australia launched the Australia-Indonesia Development Area (AIDA) here yesterday.

AIDA is a sub-regional economic zone linking northern Australia with eastern Indonesia.

Indonesia's coordinating minister for production and distribution, Hartarto, and Australia's minister of foreign affairs, Alexander Downer, launched the zone.

At the first AIDA ministerial meeting Hartarto and Downer pledged to provide incentives and aid to encourage business activities in northern Australia and eastern Indonesia.

They said AIDA's main aim was to provide the private sector with a good business climate.

They said AIDA needed to become as attractive investment place as anywhere else to ensure long-term results.

"This is a win-win, complementary cooperation," Hartarto said after the one-day ministerial meeting.

Downer said AIDA should enhance Australian firms' profitability, create more jobs for Australians and benefit firms and people in eastern Indonesia.

"So, there is absolutely no doubt in my mind that we should contribute to the economic development of eastern Indonesia ... because we want to see a more prosperous eastern Indonesia in the interest of broader stability in the region," Downer said.

The meeting set up six sectoral working groups for agriculture, fisheries and animal husbandry, education and training, mining and energy, tourism, transport, plus trade and industry.

Hartarto said Indonesia gave AIDA equal status as other sub- regional economic zones it was involved in through ASEAN like the Indonesia-Malaysia-Singapore Growth Triangle and Indonesia- Malaysia-Thailand Growth Triangle.

Indonesians from AIDA regions traveling to Australia will be relieved of fiscal clearance.

"All facilitations given to sub-regional cooperation within ASEAN will be given to AIDA. The question is whether this is sufficient or not, and that is what I'm thinking now," Hartarto said.

Indonesia would look at what policy changes were needed to cover Australians holding temporary residence permits, he said.

"I'm pleased to announce that Indonesia undertakes to increase air services between Indonesia and Australia and in particular within AIDA and to explore the development of new air routes by Indonesian and Australian airlines," Hartarto said.

Visa-free short-term entry to Indonesia for foreigners from specific countries, including Australia, would soon be available at all AIDA international ports and airports, Hartarto said.

He said the government would review policies and procedures on expatriate work permits to attract qualified Australians to assist private sector business cooperation within AIDA.

To facilitate trade Indonesia had approved in principle to computerized customs services at certain AIDA ports, especially those with heavy international loads, he said.

Hartarto invited Australian investors to take advantage of the fiscal incentives available for investment in eastern Indonesian growth centers.

Downer said Australia would open two honorary consulates within the AIDA area to facilitate business activity and the movement of people.

Australia, through the Australia Agency for International Development (AusAID), would fund a major study of eastern Indonesia focusing on identifying opportunities and challenges to trade and investment, he said

Australia would also contribute to a feasibility study into the establishment of a World Bank International Finance Corporation office in eastern Indonesia, he said.

"This office would provide technical assistance to private firms to develop bankable investment project proposals," Downer said.

Australia's Department of Employment, Education, Training and Youth Affairs, will fund a pilot project on mining competency standards and fund the introduction of competency standards for tourism in Indonesia.

Australia had also set up a technical and vocational education development assistance for Indonesians, especially those from eastern provinces.

An Ausaid deputy director-general, Peter McCawley, said AusAid had allocated A$25 million for the technical and vocational education assistance, A$225,000 for the study on opportunities and challenges in AIDA and A$130,000 for the feasibility study into the establishment of an International Finance Corporation office.

AIDA will have a three-tiered meeting structure -- sectoral working groups will give inputs to periodic meetings of senior officials which will report to the annual ministerial meeting.

The next ministerial meeting will be held back-to-back with the Australia-Indonesia ministerial forum in Australia next year.

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