Fifty economic bills await new government

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.