BKPM seeks to complete new investment bill
BKPM seeks to complete new investment bill
The Jakarta Post, Jakarta
The Investment Coordinating Board (BKPM) said on Monday the foot-
dragging process in the drafting of a crucial investment bill was
mainly caused by stiff resistance from the Ministry of Forestry.
The strong rejection of the ministry had forced the state
secretary to send the bill back to the Office of the Coordinating
Minister for the Economy for further study, putting the bill's
status in jeopardy, BKPM Chairman Theo F. Toemion lamented.
"The bill stipulates that investment in the forestry sector
will be coordinated by BKPM. They strongly object to this, which
has stalled the progress (in drafting) of the bill," Theo said
after attending a hearing with House of Representatives
Commission VI on trade and industry.
Theo added that his office received an official letter from
the ministry -- the minister was then M. Prakosa -- about three
months ago stating its rejection of the bill.
Under existing regulations, any bill proposed by one or more
ministry has to pass through the state secretary before being
submitted to the House for deliberation.
The new investment bill is meant to replace the existing 1967
Foreign Investment Law and 1968 Domestic Investment Law -- both
exclude investment in certain sectors such as forestry.
Aside from the forestry sector, under the existing laws
investment in sectors such as mining, banking and other financial
services, stock and currency markets are not included in BKPM's
portfolio.
The bill -- which contains clauses to open up new sectors to
foreign investors -- is expected to help boost foreign direct
investment (FDI), a crucial element to help the country generate
economic growth at a level sufficient to deal with the chronic
problems of unemployment.
Besides opening up new sectors to foreign investment, the new
bill would also contain measures to minimize the obstacles facing
foreign investors, such as excessive red tape.
The media and transportation are among sectors to be opened up
for foreign ownership.
President Susilo Bambang Yudhoyono has pledged to boost growth
to pre-crisis levels of 6 percent to 7 percent to help create
more jobs for the millions of unemployed and job seekers entering
the market each year.
Before the crisis, investment was one of the country's main
economic growth engines, but it only accounts for about 20
percent of the growth in gross domestic product (GDP), with
consumption contributing more than 70 percent.
Legal uncertainty, security fears, labor disputes and poorly
managed decentralization are among a few of the problems that
have put a brake on investment.
BKPM data showed that as of October, approvals for foreign
direct investment (FDI) stood at US$8.85 billion, or a 11 percent
decline from the same period last year.
Elsewhere, Theo said that he had asked to meet Malam Sambat
Kaban, the new Minister of Forestry, to discuss the problem.
"Hopefully, we'll be able to meet soon and find a solution to
this problem," Theo said.