Govt to revive investment in Aceh, Maluku, Poso
Govt to revive investment in Aceh, Maluku, Poso
The Jakarta Post, Jakarta
In an attempt to boost investment, the government plans to revive
business and investment activities in some conflict-torn areas in
the country, such as Central Sulawesi's town of Poso as well as
the provinces of Aceh and Ambon.
At the top of the agenda is to seek ways to improve local
businesses' access to financing from banks, Bank Indonesia
governor Burhanuddin Abdullah said on Friday following a meeting
with Vice President Jusuf Kalla.
"A memorandum of understanding between the central bank and
the government will be signed, which will then be followed by the
setting up of a team assigned to draw up steps and policies,"
Burhanuddin told a press briefing.
On his part, Burhanuddin added, the central bank would provide
a formula that could revive lending from the banking sector to
local enterprises in the conflict areas.
The team will comprise officials from the central bank,
Ministry of Finance, the office of the State Minister of State
Enterprises and the Indonesian Credit Insurance (Askrindo) -- all
to be coordinated by the office of the Coordinating Minister for
the Economy.
In the first phase, however, the plan would focus only on the
plantation industry, Burhanuddin added, which had been largely
abandoned and even damaged after years of bloody conflict.
Decades ago, the government had opened plantations in several
post-conflict areas with the support of Bank Indonesia, banks and
the private sector, he said.
"And for those plantation businesses to get back on track,
they need fresh capital," he said.
As to what obstacles the government might face in carrying out
the plan, he said most would stem from the fact that many
plantations had "yet to settle their old debts from the previous
projects".
"For example, the National Private Plantation in Aceh ... have
unpaid debts of Rp 250 billion (US$27.53 million), so how are we
going to resolve that? That's why there is going to be a team to
assess all these (aspects)," he said.
The government of President Susilo Bambang Yudhoyono has
pledged to prioritize improving the business climate on its must-
do list.
In order for economic growth to attain the level necessary to
reduce the country's chronic unemployment and poverty problems, a
boost in investment was vital, analysts have said. But during
the past couple of years, investment particularly foreign direct
investment has been scarce due to a host of problems including
security, labor conflict, poor implementation of regional
autonomy, and unfavorable tax policy.
The country can no longer rely merely on robust domestic
consumption as the main driver of growth, as this is deemed
unsustainable.