Fri, 28 Jan 2011

From: The Jakarta Globe

By Camelia Pasandaran
Representatives from the British government on Thursday urged Indonesia to provide better investment conditions, including improved infastructure.

“Lord Powell expressed some concerns about improvements needed for investment, including the roads, the harbors and electricity,” spokesman Yopie Hidayat said at the Vice Presidential Palace on Thursday.

“There was also discussion about some regulations which are contradictory, such as the regulation of the Energy and Mineral Resources Ministry and Environment Ministry.”

Powell, co-chairman of the British government’s Asia Task Force, met Vice President Boediono to discuss the Indonesian economy as well as global conditions.

“Lord Powell said that Indonesia is still the main investment target of the United Kingdom with its high economic growth, and he promised to support us more,” Yopie said.

Britain, Singapore and the United States were the primary overseas investors in Indonesia last year, according to data from the Investment Coordinating Board (BKPM).

The UK, which came in second, had a total realized invesment of $1.89 billion last year, while Singapore’s investment rose to $5.01 billion from $4.4 billion in 2009.

UK investment accounted for 4.3 percent of all overseas investment in Indonesia with 84 projects.

The US, in third place, had a total realized investment value of $931 million in 2010.

Total investment in Indonesia amounted to Rp 208.5 trillion ($23.1 billion) last year, with overseas investors accounting for Rp 148 trillion while Rp 60 trillion came from domestic investors, according to BKPM data.

Boediono told Powell that the government had already started work on the areas of concern, Yopie said.

“Regarding the road problem, as we all know, we have intensively tried to accelerate the construction of the TransJava toll road,” Yopie said. “We’re evaluating the contract to accelerate it.”

As for the harbor development, he said, the government is in the process of expanding Tanjung Priok seaport, the largest in Indonesia.

“On the contradictory regulations, we have conducted several meetings to coordinate the regulations,” Yopie said.

“On oil lifting, a couple weeks ago, the vice president said that oil lifting was crucial, so regulation harmonization is needed to support oil production.”

Indonesia has struggled to improve its infrastructure, which is seen as a prerequisite to attracting more foreign investment.

President Susilo Bambang Yudhoyono has pledged to invest $140 billion through 2014 to improve infrastructure and boost economic growth to an average of 6.6 percent annually by the end of his second term.