Fifty economic bills await new government

Zakki P. Hakim and Rendi A. Witular, The Jakarta Post/Jakarta

The next government will face the challenging task of completing deliberations of about 50 draft laws and regulations on the economy, or existing investors would flee the country, the top economics minister said on Wednesday.

Speaking at an investment forum attended by members of the Indonesian Chamber of Commerce and Industry (Kadin) and foreign trade associations, Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti said the proposed laws and regulations were crucial in improving the country's investment climate.

Dorodjatun, however, acknowledged that the current government could not finish deliberations before their term ended, and said the bottleneck was caused by the House of Representatives.

"I do not want to blame the House, but the fact is, only four or five drafts are deliberated during each session," he told reporters after the meeting.

Among the unfinished drafts are a presidential decree on labor wage council, regulations on upstream and downstream oil and gas businesses, a trade bill and bills on information and electronic transactions, investment and taxation.

The country must boost investment to accelerate economic growth and resolve the chronic unemployment, but for the past few years, investment has been weak due to the poor investment climate.

Foreign direct investment approvals fell 33.62 percent in the first seven months this year to US$3.30 billion from $4.97 billion on-year, the Investment Coordinating Board said on Monday. During the same period, domestic investment approvals rose 34 percent year-on-year to Rp 18.72 trillion ($2.02 billion), it said.

Meanwhile, British Chamber of Commerce chairman John B. Arnold said instead of focusing on creating new laws and regulations, an immediate solution would be to ease red tape.

"I admit that the country might be short of laws, but in some areas, we are overregulated. (The government) must get the balance right. Deregulation is a must," he said.

He also criticized the government's poor investment policy as lacking in specific details and targets.

For example, he said, businesses had long heard about planned tax incentive, but since no details were provided, no new investments were coming in.

"The government said 2003 was the year of investment, and then, 2004 is also the year of investment, but the government has done nothing significant to improve the investment climate up until today," said Arnold.

American Chamber of Commerce (AmCham) president Joe Bartlett said in a written statement made available to the Post that AmCham recommended that the government work with existing investors to restore confidence and to assist them in becoming the country's best advocates for attracting new investors.

Amcham also suggested that the government attract new private investment capital by eliminating business risks and uncertainty that eroded Indonesia's competitiveness.

Furthermore, the government should eliminate surprises and inconsistencies, control corruption, enforce the rule of law and improve coordination among government departments, as well as between the central, provincial and regional governments.

Amcham suggested specifically that the next government set up an intellectual property rights agency chaired by the top economics minister, which also involved the National Police, the Attorney General's Office and customs department.