City promises better investment climate next year

Damar Harsanto, The Jakarta Post, Jakarta

In an effort to attract more investment to the city, the administration plans to revoke bylaws hindering development and create a one-stop-shop investor service, Deputy Governor Fauzi Bowo says.

The moves were highlighted after a World Bank study released on Sunday put the nation at the bottom of an international list, ranking its business climate as one of the worst in the world.

"We are planning to remove several bylaws which impede investment," Fauzi said on Monday after a meeting with the City Council to discuss the 2005 city development plan.

He did not specify the bylaws. The administration earlier announced it was preparing a new bylaw to provide a one-stop service for investors operating in the capital in an effort to cut down on bureaucratic red tape.

"We must realize that we can't create job opportunities by just relying on the city's potential," Fauzi said.

Any increase in investment would likely generate job opportunities for the 560,000 people estimated to be unemployed in the city.

Fauzi said the administration planned to provide more funds to small- and medium-scale enterprises in the city. "We will also establish a non-lending micro institution to help small- and medium-scale enterprises obtain loans from banks."

The administration would prioritize investment in the service sector in line with a plan to make Jakarta "a service city", he said.

With relatively few natural resources, the service sector provides a large contribution to the administration's revenue.

Despite the bleak outlook for Indonesia suggested in the World Bank report, which ranks Indonesia in the bottom quartile of 145 nations in terms of the ease of doing business, Jakarta had recorded promising growth in foreign investment during the past three years, the administration said.

This year, the administration has approved a total of US$864.50 million in foreign direct investment (FDI) in 288 projects.

The figure is an improvement on the level reached in 2001, when FDI was measured at $609 million, however figures for 2002 and last year were not available.

The 10 biggest investing countries in Jakarta are Japan, Singapore, Hong Kong, the United States, the Netherlands, the United Kingdom, Australia, Germany, South Korea and France.