Foreign investment in Indonesia

Minister of Trade Mari E. Pangestu's comments and concerns with regard to "out of control regional administrations' levies on foreign investors" (The Jakarta Post of Feb. 14) are to be commended.

We will, however, wait and see if these words are finally going to turn into concrete action. Foreign investors have been patiently waiting six years for Indonesia to change legislation to attract or keep foreign investors. History, so far, has only seen lip service paid to this very serious economic obstacle by previous administrations.

How are regional authorities going to take seriously any requirement by the central government to stop levies when the Indonesian government independently levies foreign investors from every direction? When a foreign investor has to pay between 40 and 70 million rupiah just to register a business in Indonesia then something is fundamentally wrong. Our closest neighbors like Vietnam offer free company registration and working visas for foreign investors.

A yearly fee of Rp 4 million per person for a temporary stay permit (KITAS) and the contentious work permit for expatriates (Ikta) fee of US$1,200 per year are not indicators of a foreign investment friendly government.

On top of all this, now the foreign investor must pay into Jamsostek for his personal medical insurance and pension. Last but not least, the much debated fiscal tax to depart from Indonesia.

So, before the central government looks at cleaning up regional administration levies it would be prudent to lead by example by repealing regulations presently strangling foreign investors. The Indonesian government needs to take into account the foreigner business culture when spending huge amounts of money trying to attract foreign direct investment.

The only way foreign investment will flow into Indonesia is when established foreign investors relay positive sentiments about the present business environment through the business grapevine used by potential foreign investors before making decisions on investing their hard earned capital in the country.

A level playing field is all that is required to reinvigorate stalled foreign investment and retain those investors who have in the past supported Indonesia's economy and created much needed employment. MARGARETTE HASKELL Bali