Companies urged to participate in subregional areas

JAKARTA (JP): Coordinating Minister for Production and Distribution Hartarto said that the government plans to give top priority to new projects in the 18 provinces linked to subregional cooperation areas in order to attract more private investment.

After installing his new assistants and expert advisors yesterday, Hartarto said that cooperation among members of the Association of Southeast Asian Nations (ASEAN) should be viewed as an integral part of provincial and local development at home.

"Businessmen from the 18 provinces, together with the provincial administrations, should make use of the cooperation areas to accelerate the economic growth of the provinces," he noted.

He added that the subregional cooperation groups developed by Indonesia and five other ASEAN countries are meant to help prepare the provinces for the year 2003, when the ASEAN Free Trade Area (AFTA) is to go into effect.

"If they (local investors) are not ready, they should create synergy with more established businessmen from other provinces, particularly from Jakarta."

Hartarto also hinted that the government is planning to announce fiscal incentives on Thursday to bring more investors into the 18 provinces.

Today, Indonesia is part of three subregional economic cooperation groups, formerly known as growth triangles, with all of ASEAN's members except Vietnam: the Indonesia-Malaysia- Thailand Growth Triangle, the Indonesia-Malaysia-Singapore Growth Triangle and the Brunei-Indonesia-Malaysia-Philippine East ASEAN Growth Area.

The 18 provinces participating are Aceh, West, North and South Sumatra, Riau, Bengkulu, Jambi, Lampung, four provinces in Kalimantan, four provinces in Sulawesi, Maluku and Irian Jaya.

No harmony

Hartarto recognized that local businesses in the 18 provinces and the provincial administrations have yet to harmonize their perceptions of the arrangements.

Success in the areas will depend on a conducive business climate created by the government and active private participation.

Hartarto said that only four of the 18 provinces have shown positive developments, which he attributed to good coordination between provincial government officials and private sector companies. They are West and North Sumatra, Riau and West Kalimantan.

To promote greater private sector participation, Hartarto's office has invited the Indonesian Chamber of Commerce and Industry and its provincial offices to join a forthcoming coordination meeting on Sept. 19.

President Soeharto is expected to open the meeting, which will be attended by the governors from the 18 provinces. (alo)