Corruption a serious threat to business sector, Kadin says
Corruption a serious threat to business sector, Kadin says
Fitri Wulandari, The Jakarta Post , Jakarta
Rampant corruption, coupled with ineffective bureaucracy and
unfavorable industrial relations, remains the main obstacle in
doing business in this country, the Indonesian Chamber of
Commerce and Industry (Kadin) said in its year-end assessment.
Kadin chairman Aburizal Bakrie told a media conference on
Monday that corruption and collusive business practices had
created uncertainty and worsened the investment climate here.
Aburizal cited a study from the prestigious University of
Indonesia that shows that businesses have to set aside 10 percent
to 11 percent of production costs for bribes.
He explained that one of the direct impacts of the above
problems was a slowdown in the recovery of the country's crucial
manufacturing sector, which has seen a decline in production
capacity, as new investment in the sector remains low despite
hard-won macroeconomic stability.
The recovery of this sector is important as it can provide a
huge number of jobs for the millions of people left jobless
following the late-1990s economic crisis.
Aburizal also criticized the country's ineffective
bureaucracy.
He cited a World Bank study, which shows that it takes 196
days to set up a company in Indonesia, while it only takes 50 in
Vietnam and 5 in Singapore.
He said that corruption and the ineffective bureaucracy had
worsened the country's competitiveness.
The World Economic Forum recently ranked Indonesia 60th of 102
countries surveyed in terms of business competitiveness.
Aburizal said it was urgent to reform the bureaucracy in the
country to reduce corruption and collusive business practices.
Kadin plans to work with different groups as part of the
organization's drive to combat corruption. The organization
signed an antibribery pact last week with Muhammadiyah Students
Association (IMM), under which IMM will be involved in an
antibribery campaign.
"We shall sign an antibribery pact with different groups,
including students. We want to inform the public that bribery is
damaging and needs to be eliminated," Aburizal told The Jakarta
Post.
Aburizal added the business sector needed a business-friendly
government.
"We need a strong leader who can ignore political parties and
select capable people who understand business and the economy,"
he said.
Aburizal cited the government's minimum wage policy as an
example of what was undermining the country's business
competitiveness. He said that minimum wages in Jakarta were
higher than those in Hanoi and Shanghai.
The upcoming election also raises concern on whether it can
produce a government that is committed to economic development,
Aburizal added.
"They want a government that can tackle problems like the
rising price of goods, unemployment and other matters," he
remarked.
He said that improving the investment climate at home was
crucial to attracting new investment to the country to help the
economy grow at a faster rate and create more jobs.