Foreign investors 'need level playing fields'

Foreign investors 'need level playing fields'

Riyadi Suparno, The Jakarta Post/Jakarta

Harassing foreign investors is never a good thing, moreover in
times of a poor investment climate. The best advice would
probably be to offer fair treatment and a level playing field.

According to U.S. Treasury Assistant Secretary Randal K.
Quarles, the protracted battle between the government and Karaha
Bodas Company over the former's compensation payment to the
latter, and between the police and PT Newmont Minahasa over
alleged pollution by the latter, could send wrong signals to
investors in general and deter their return.

"They are all causing concerns. I think these sorts of issues
are deterring investment in Indonesia, and these are the sorts of
things that need to be addressed," Quarles told journalists here.

When asked if he raised Newmont and Karaha Bodas cases during
their meeting with Indonesian officials, Quarles said: "As
examples, we raised some specific issues that raised concerns.
But, it's not the topic of any of our meetings."

Not only those cases, Quarles said, investors were also
deterred by other issues such as high-profile and unfavorable
court decisions, corruption, conflicting regulations, and tax
administration issues.

"If foreign investors are to begin investing in Indonesia
again," Quarles said, "they are going to have to be confident
that they will face a level-playing field, a level playing field
in judiciary, in regulatory systems and in general availability
in business opportunities."

Bringing back investors to Indonesia was a challenge for the
new government, Quarles said, noting that foreign investment was
badly needed to bring economic growth back to the pre-crisis
levels.

Indonesia has been suffering negative foreign investment since
the crisis, meaning that there has been more capital outflows
than inflows into the country.

During his visit here, Quarles met with Bank Indonesia
governor Burhanudin Abdullah, Finance Minister Yusuf Anwar,
Minister of National Development Planning Sri Mulyani Indrawati
and members of the House of Representatives' Commission XI on
finance and banking.

Quarles commended efforts by the new government to review
conflicting regulations between the center and local governments
and reduce bureaucratic obstacles, which could be the first step
in addressing Indonesia's bleak investment picture.

"We look forward to the government continuing to dedicate its
full energy to all aspects of improving the investment climate so
that it will succeed," he said.