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)