Clearer policies vital to attract investors
Clearer policies vital to attract investors
JAKARTA (JP): The government's ambiguous policy on the role
and shares of industries in the domestic market may shun
prospective foreign and domestic investors from expanding their
businesses in Indonesia, a businessman warned yesterday.
Sofyan Wanandi, president of the Gemala group of companies,
told reporters yesterday that clear rules and transparency were
needed to guarantee a sound investment climate in the country.
"I am afraid that if we continue to blame each other for the
current economic situation, and bicker among ourselves, we will
lose many opportunities," he said, responding to increasing
rumors of cartels, monopolies and oligopolies in Indonesia, as
hinted at last month by the World Bank.
According to the World Bank, such practices have caused high-
economic costs in the country and escalated prices on the
domestic market.
Earlier this week, State Minister of Investment Sanyoto
Sastrowardoyo announced that his office, the Investment
Coordinating Board, would not allow companies already holding 50
percent or more of the shares on the domestic market to expand
their capacity.
On Tuesday he clarified his remarks, saying that industries
holding more than 50 percent of the domestic market shares are
still allowed to expand their capacity if any additional
production is destined for the export market.
Sofyan, who is also an executive of the Prasetiya Mulya
Foundation, said yesterday that such restrictions can only be
applied if there are clear government regulations on this matter.
"If such restrictions were established, it must be for
national interest," he said.
In the case of monopolies, Sofyan said that, as long as the
government did not have any regulations against it, there should
actually be no problem with their existence.
However, he pointed out that the market must be more open, to
encourage investments, since relying on imports would cut back
foreign exchange earnings.
"If, for example, an anti-monopoly ruling is needed for this
purpose, then the government should make one and put it into
effect clearly and transparently," he stressed.
Electricity supply, he cited, was easily controlled by the
government through the monopoly of one of its state enterprises.
"If this can be applied to electricity, the government should
also try to use a similar approach in other sectors. All they
(the government) have to do is make regulations," he said.
The government, he said, should be able to control, manage and
drive market forces so that the economy can run smoothly without
excessive protection to anyone.
"As long as the government knows what is going on and is
capable of taking quick steps and decisions, no problems should
arise," he said. (pwn)