BKPM chief lashes out at media

The Jakarta Post, Nusa Dua, Bali

Chairman of the Investment Coordinating Board (BKPM) Theo Toemion lashed out at the media for exaggerating the country's problems, which in turn had created a "negative perception" of the investment climate.

Theo said that during talks with investors, he had often been repeatedly bombarded with negative remarks on increased corruption, inefficient bureaucracy, messy decentralization procedures, inadequate legal certainty, a confusing political process and recently a "haven for terrorists."

He claimed that the government had actually begun to address such problems and the local media only liked to highlight the difficulties, thus leading the international press to be deceived and write exaggerated reports about the country's problems.

"Unfortunately, the media has not been kind enough to recognize our efforts to deal with these issues. Our free press encourages our writers to freely highlight our difficulties, rather than give some credit to our government for trying to improve.

"The International press takes its cue from our local reports and further exaggerates our problems by perpetuating an adverse perception on our investment climate," he told hundreds of local and foreign businessmen at the second-day of the first ASEAN Business and Investment Summit.

"This is a self-fulfilling negativism and scares investors to move us off their investment map... It is discouraging and 'de- motivating'."

Theo appealed to the media to present a more balanced picture on Indonesia's investment climate and give credit to the government for whatever efforts it has made to resolve the various problems.

Foreign direct investment into the country has significantly weakened since the late 1990s economic and political crisis. The recent outbreak of Severe Acute Respiratory Syndrome (SARS) and terrorist bomb attacks including those in Bali and in Jakarta have further aggravated the situation.

Although the government and the central bank have managed to bring about a semblance of stability in some of the country's macroeconomic indicators, it has yet to translate into brisk investment activities.

The low investment level has caused the country's economy to grow at a relatively meager rate of around 3 percent to 4 percent during the past couple of years as it has become increasingly reliant on domestic consumption. In order for the government to push growth to pre-crisis levels of around 7 percent, enough to be able to create more jobs to millions of new job seekers each year, investment has to play a more significant role.

Theo urged investors to return to the country because the government had prepared to take a number of steps to address its problems.

He said that plans to set up the so-called National Team for Investment and Exports could soon be acted upon.

The team, which will be chaired by the President and include Cabinet members, will try to address the complex bureaucracy and other problems relating to various conflicting government regulations.

Theo added that the investment coordinating board would provide a "one roof" service facility to help streamline investment procedures for "qualified investors". Meaning that all licensing approvals could be located within the BKPM. Many ministers, however, have openly opposed the plan, as they are concerned that such streamlined procedures would not be "effective".

Theo said that the BKPM would soon submit the country's long- awaited investment bill to the House of Representatives for approval.

The key features are unification of the existing investment laws on foreign and domestic investment, commitments on freedom to invest, and delineation of authority between the central and regional governments.

"The enactment of this law should provide a comforting assurance for investors," Theo said.

"Under the new law, we are hoping to be able to provide additional investment incentives to those who meet the qualifying criteria."

He added that the government was also planning to reduce the number of 'closed' sectors, to allow foreign or joint venture companies to operate in other sectors, not including defense, the environment, religion or health because of the importance to keeping those in the hands of local citizens exclusively.