Mon, 07 Aug 2006

Yudhoyono promises to improve services to foreign investors

M. Taufiqurrahman, The Jakarta Post, Singapore

The government has invited Singaporean businesspeople to invest in crucial projects and assured them it would trim the notorious red tape that deters many investors from entering the country.

Speaking to executives of leading firms from Indonesia's largest investor, President Susilo Bambang Yudhoyono said Sunday his government had initiated thorough bureaucratic reform aimed at providing faster, cheaper and better service to investors.

"Reform is not easy, but trust us that Indonesia is very serious about improving so many things," Yudhoyono told the group.

Present during the meeting were executive director and chief executive officer of Temasek Holdings Ho Ching, president of ST Telemedia Lee Theng Kiat, chairman of KEPPEL Corporation Lim Chee Onn and the chairman of Danone Asia, Simon Israel.

He encouraged them to invest in infrastructure, housing, electricity and biofuel plants, repeating a similar call made to Malaysian businesspeople Friday in Kuala Lumpur.

Indonesia needs foreign and domestic investment for upgrading infrastructure, estimated at US$150 billion in the next five years, he had said in the Malaysian capital.

Recently, the government set aside $343 million in infrastructure and guarantee funds to attract foreign investors to project financing in the country.

Yudhoyono was in Singapore Sunday for a talk with Prime Minister Lee Hsien Loong and senior minister and former prime minister Lee Kuan Yew.

Susilo and Lee were expected to discuss efforts to implement an agreement on a special economic zone covering Bintan and Batam islands, signed by the government last April.

The agreement is aimed at revitalizing and expanding existing trade and investment agreements in Batam and Bintan, located only 20 km from Singapore.

Both countries have agreed to establish a joint commission overseeing the special economic zones.

Singapore has requested Indonesia streamline investment procedures and improve industrial relations on the two islands to allow bigger investment flow from the city state.

Yudhoyono responded that the Indonesian side had carried out intensive reform in Batam, where a one-stop service for investors had been set up.

"I have ordered officials in Batam, Bintan and Karimun to effect a revolution in their services. I hope that everything is in place."

But some of the businesspeople were displeased by the pace of reform in Batam.

James Kong, CEO of CIBA Vision, a leading producer of contact lens, said that he saw no significant changes in Batam and experienced a worsening business climate.

"I really could not feel that changes have taken place at all," Kong said. "At times we don't know whom we should speak to. The labor union recently demanded the abolition of contract workers and we were left alone in the legal recourse when dealing with them."

Singapore ranked as Indonesia's third biggest trading partner in 2005 and the largest investor in the country, with investment of $3.9 billion.