Govt urged to resolve high cost economy

The Jakarta Post, Jakarta

A number of Japanese investors complained to the Minister of Industry Andung A. Nitimihardja over obstacles in investing in the country, which led to a high cost economy and turned away potential investors.

"Although overall the country's investment climate has improved, there are still a number of problems that need to be resolved by the new government," said Yoshihiro Koki, the president director of PT Megapolis Manunggal Industrial Development (MMID), on Friday.

Koki expressed his concerns to Andung, during the minister's visit to the MM2100 industrial area in Cikarang, Bekasi, as reported by Antara.

The problems include the lack of infrastructure such as roads, ports and telecommunication facilities, while at the same time investors had to deal with bureaucratic red tape both in the central and local governments, illegal fees, and local "mafia," he explained.

"All these problems result in a high cost economy, which makes it hard for us to compete with other companies investing in other countries," Koki said.

Andung said that the new government was determined to quickly resolve the problems faced by investors.

"The government is committed to improving the welfare of the nation, therefore we take investment problems very seriously," he said.

The new government is under pressure to attract new investment, which is crucial to accelerate economic growth and to curb unemployment.

According to Koki, there are 182 firms from various countries in the MM2100 industrial area, which was first opened in 1990.

Out of the 182 companies, he said, 137 firms were fully operational, 13 were still developing their sites and the remaining 32 were still in the stage of preparation.

Japanese firms dominated the area with 104 companies, followed by 46 local companies and 32 companies from various other countries.

"The other countries include South Korea, Taiwan, Spain and the Philippines," Koki said.

Furthermore, he said that the investment value of the 137 firms reached US$3.4 billion.

"Our target by the end of 2008 is to have 210 companies investing in the area. Therefore, we urged the government to tackle the problems faced by investors seriously," he said.