Govt asked to give additional power to provinces

By Riyadi

AMBON, Maluku (JP): Business people in eastern provinces have asked the government to give local administrations more power to form trade and investment policies.

They said decentralization was the best way to stimulate business activities in eastern Indonesia's less developed areas.

South Sulawesi businessman Muhammad Yusuf Kalla said here last week the government's centralized trade and investment policies had helped deprive local businesses and people.

"We used to be really prosperous because of the free trade in logs, cobras, cloves and nutmeg. But these commodities' prices have tumbled since trading regimes were imposed ... because people can no longer export them but have to sell them to Java," Kalla said.

He called on the (central) government to liberalize agro- industrial trade, saying trade restrictions on those products had been disastrous for prices.

Kalla, who is the chairman of Bukaka Teknik Utama, said agro- industrial products from Indonesia's eastern provinces had been ready for free trade for a long time.

"Don't wait until 2003. We are ready now. Certain industries in Java are afraid of free trade because they are not competitive. But the competitiveness of the agro-industry is not because we have a strong resource base here," Kalla said.

He also said the government should loosen its grip on licensing for local fisherman buying boats.

The people in some of Indonesia's eastern provinces like those in Sulawesi and Maluku have a tradition of fishing but were being marginalized because of the government's hold on them.

"I believe if we were not controlled so strongly in fishing, people's incomes would be much higher," said Kalla, who is also the chairman of the Kalla business group.

Maluku businessman Nico Pieter said the licensing requirements for buying fishing boats were expensive.

Currently any fishing vessel with a dead weight of more than 100 tons requires a government license.

"This kind of regulation has sparked resentment and disappointment among local people, especially fishing firms. So, the government should deregulate," Nico said.

Nico, who is also chairman of the Maluku Chamber of Commerce and Industry, laments the lack of support for local businesses from banks.

Credit proposals by local businesses for over Rp 1 billion (US$413,220) have to go through Jakarta first, he said.

"This way, local businesses are not able to compete with big businesses from Jakarta. Eventually only big businesses from Jakarta can really invest here in Maluku," Nico said.

He also criticized the centralized investment licensing procedures for local and foreign projects.

This policy created high costs for local businesses, Nico said.

Local businessman had to go to Jakarta at least three times to process one license for an investment project in Maluku, he said.

"That's not very efficient. If one trip costs this businessman Rp 2.5 million, three trips means Rp 7.5 million. That's only traveling costs, not other costs," he said.

He said the government had goodwill and wanted to help local businesses but that it was not enough.

"Goodwill is not enough. It needs good actions to improve the situation," Nico said.

Nico and Kalla were here to attend the first ministerial meeting of the Australia-Indonesia Development Area, a sub regional economic zone involving Australia and Indonesia's eastern provinces.

Deputy chairman of the Investment Coordinating Board, Sugihono Kadarisman said the board was looking at delegating certain investment licensing powers to local investment boards.

He said the government was considering setting up an independent investment licensing authority for certain economic growth centers like Batam in Riau.

"But the problem is that local businesses sometimes still demand licenses from the central government because without such a license, they cannot realize their investment plans," he said.

He said the central investment board was only processing principal licenses and that other licenses, like location and building licenses, were already issued by local administrations.

"Many times, the problems happen in local administrations. So far, many complaints in investment have something to do with local administration services," Sugihono said.

The coordinating minister for production and distribution, Hartarto, said the government was pursuing decentralization in all aspects of government.

"Our government is heading toward decentralization. The government, for instance, has decentralized sectors like agriculture and certain industrial sectors, especially those with small businesses," Hartarto said.

"But decentralization is a process. So, the government will continue to grant autonomy to local administration, but will do so gradually," he said. (rid)