Central and regional administrations to cooperate in investment projects
Central and regional administrations to cooperate in investment projects
Urip Hudiono, The Jakarta Post, Jakarta
The central government has decided concentrate on regional
investment as it extends last year's Indonesian Investment Year
program until 2005.
"We expect full cooperation and active participation of all
local administrations in promoting investment in their
territories," Investment Coordinating Board (BKPM) head Theo F.
Toemion said during the signing of a memorandum of understanding
(MOU) on Monday between the board and all the country's 30
provincial administrations.
The Indonesian Investment Year program was launched in
February last year by President Megawati Soekarnoputri to boost
investment.
BKPM data shows domestic investment approved by the board in
2003 reached Rp 48.8 trillion (US$ 5.74 billion), an increase of
92 percent from 2002.
Foreign investment, meanwhile, was recorded at $14.7 billion,
a growth of 50 percent.
But experts have said a large part of the foreign investment
figure consisted of existing domestic investments switching to
foreign investment schemes.
Foreign money flowing into the country has remained weak due
to uncertainties and problems at home.
Coordinating Minister for the Economy Dorodjatun Kuntjoro-
Jakti said the MOU was a positive step for promoting investment
in the country.
"It will help dispel the current perception that the recent
regional autonomy policy has only brought uncertainty for
investment," he said.
Indonesia still needed more investment to further boost the
country's economy, he said.
During the past few years it had been growing at a "mediocre"
rate of about 4 percent due to poor investment and sluggish
exports.
The government has set a growth target of 4.8 percent this
year. A healthy investment market is crucial for the economic
growth necessary to create sufficient jobs for millions of
unemployed people.
Meanwhile, BKPM deputy head Yus'an said local administrations
would still be given freedom under the regional autonomy policy
to manage investments in their own territories.
"It will be better, however, if there is a concerted
coordination and cooperation between the administrations and the
central government," he said.
The cooperation, explained Yus'an, would include the provision
of information and promotional materials, the identification of
areas with investment potential, and the creation of favorable
conditions.
The latter should include the abolishment of local regulations
which could inhibit investment.
The government is also preparing several other policies to
promote investment in the country.
These include the drafting of a new, unified investment law to
replace Law No. 1/1967 on foreign investment and Law No. 6/1968
on domestic investment, as well as the setting up of a "one-tier"
investment service system.