Bureaucracy slows ASEAN's sub-regional cooperation

Bureaucracy slows ASEAN's sub-regional cooperation

JAKARTA (JP): Bureaucratic and fiscal problems hinder the
development of sub-regional economic cooperation in the
Association of Southeast Asian Nations (ASEAN), analysts said.

"I don't know what the quick solution to the problems is but
they are a reality that must be addressed to accelerate the
development of cooperation," Indonesia Forum Foundation's
chairman Mohammad Sadli said.

The Indonesian Forum Foundation, an organization promoting
trade and investment in Indonesia, opens a conference of the
Asian Region International Association of Cooperating
Organizations (ARIACO) Wednesday, and a three-day seminar,
"Indonesia and the World", on Oct. 18.

According to Sadli, the bigger the country, the bigger its
bureaucratic problems. "That's why a big country like Indonesia
is slower in implementing economic cooperation than smaller
countries like Malaysia and Singapore."

Decentralization can help streamline bureaucracy by giving
provincial and regency administrations more authority to approve
investments, Sadli said, but bureaucratic snarl is far from
untangled.

Dibyo Prabowo, the executive director of the Indonesia Forum
Foundation, said that tax, land and financial problems hinder the
sub-regional economic cooperation.

While 59 memorandums of understanding (MOU) were signed
between business leaders in North Sumatra and their counterparts
in Malaysia and Thailand recently, Dibyo said that only 32 have
been implemented. The others were either canceled by the
investors or left unfulfilled.

"Apparently Malaysian and Thai investors canceled the MOU due
to land problems or because the Indonesian partners failed to
meet their financial commitments," he said.

Business leaders in Sumatra say they need access to credit,
and have asked the Forum to help them work with banks so they can
more easily fund their businesses.

Another roadblock to trade within the ASEAN region, which is
made up of Indonesia, Brunei, Malaysia, the Philippines,
Singapore, Thailand and Vietnam, is the exit tax on leaving
Indonesia.

Dibyo said that the exit tax has affected the trading
activities of the inang-inang -- female traders from North
Sumatra who traditionally procure goods from neighboring Malaysia
and Singapore.

The policy, which requires all residents of Indonesia
traveling abroad by air to pay an exit tax of Rp 250,000 (US$107)
and those traveling by sea to pay Rp 100,000, makes it difficult
for the traditional traders to expand their business.

Dibyo did see some signs of progress. He praised the
government's new policy allowing foreigners to bring their own
cars to Indonesia. "Businessmen will benefit from the policy
because they are saved from problems in getting local
transportation," he said.

Seminar

The ARIACO conference, which will be opened by Minister of
Tourism, Post and Telecommunication Joop Ave, features speakers
from the Philippines, Malaysia, Indonesia, Australia and the
United States.

ARIACO is an organization of businessmen and economists that
is sponsored by the Committee for Economic Development of
Australia (CEDA).

The seminar "Indonesia and the World" will include speakers
Djisman Simandjuntak and Mari Pangestu of Indonesia; Suthad
Setboonsarng of the ASEAN Secretariat; Alan Oxley of Australia;
Edgardo Campos of the World Bank, and Ippei Yamazawa of Japan.

The Indonesia Forum Foundation holds a seminar every three
years. Its first one was held in Bali with the theme "Indonesia,
Asia Pacific and the New World". (13)