Export, investment teams

Export, investment teams

The business community reacted skeptically to the recent
issuance of a presidential decree on the establishment of an
Export and Investment Promotion Team, saying that this move would
not significantly improve policy coordination -- nor would it
expedite the decision-making process within the government.

Business leaders wonder what the team can do in the remaining
10-month tenure of the Megawati administration, as the new
government that will take over in late October 2004 might simply
disband the team anyway.

Moreover, the team has yet to convene its first meeting and
form its core staff and set its working programs, operational
procedures and other technical details.

At first glance, the team appears to be very powerful with a
strong leadership, as it is headed by President Megawati
Soekarnoputri herself and includes all coordinating ministers and
other Cabinet members who are directly or indirectly involved
with promoting export and investment.

The team will work mainly through two operational arms: the
National Export Promotion Task Force, to be headed by the
minister of industry and trade, and the National Investment
Promotion Task Force, to be led by the chief of the Investment
Coordinating Board. Both task forces have yet to be formed.

Notwithstanding the significant improvement in macroeconomic
stability, the Megawati administration has been notorious for its
acute lack of leadership in pushing through economic reform
measures and for being virtually devoid of any sense of urgency
and an appropriate sense of priority.

Given these constraints, one cannot avoid feeling that the
executive order on the team's establishment was issued merely to
fulfill, at least in its appearance, one of the targets
stipulated in the government's White Paper on reform measures.

What is really needed is not another team, but a sense of
urgency and effective leadership to implement what has been set
out in the reform agenda. The monthly Cabinet meeting on economic
affairs is already adequate to make and coordinate policies.

What has been missing so far from the monthly meeting is a
true spirit of teamwork and an urgency to act, as discussions
seem to be more a formality than a vigorous, thought-process
about policy instruments.

The most outstanding shortcoming of the monthly meetings,
though, is the absence of business leaders or representatives
from various industrial associations -- people who are supposedly
the most apprised of developments in various business sectors.

Since the government has decided to establish the team any
way, concerted efforts should be undertaken to make it as
effective a team as possible.

The first order of the day requires President Megawati to make
it clear from the outset that the team means real business. This
further means that the top priority is to better policy
coordination so as to resolve problems in the field as quickly as
possible.

The membership of each of the two task forces, therefore,
should be formed in such a way so that each task force has the
authority and capability to decide on concrete measures to
increase export and investment.

Take, for example, the export promotion task force. Its
membership should include all representatives from government
institutions as well as industry and trade associations directly
related to foreign trade -- such as tax and customs offices,
distribution services, banks, port authorities and stevedoring
companies.

Export is an inter-sectoral economic activity, and is at the
end of a long chain of operations starting from the import of
materials to port handling, to distribution, processing and
shipment. A defect in even one link of the chain could adversely
affect the competitiveness of exports from either delayed
delivery or higher prices.

Likewise, the investment promotion task force should consist
of inter-ministerial representatives authorized to make decisions
in their respective areas. Similar to export promotion,
investment promotion is influenced by policies in various
sectors.

The investment task force should focus on streamlining the
investment licensing system and transform it into a one-stop
service center, while empowering investment bureaus at the
provincial level to address investors' grievances.

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