Japan unimpressed with RI foot-dragging on FTZ
Japan unimpressed with RI foot-dragging on FTZ
Fadli
The Jakarta Post
Batam/Jakarta
The Japan External Trade Organization (Jetro), an influential
Japanese government agency, said it was pessimistic over
Indonesia's stated plan to implement the Free Trade Zone (FTZ) in
Batam.
The pessimism was expressed by Jetro's senior investment
advisor Saburo Izumi on Thursday during a visit to the industrial
island to promote investment inflows into the country.
Based on the agency's talks with a number of sources in
Jakarta, Saburo said that Jetro was upset that the FTZ
implementation did not look likely in the near future.
While highlighting the importance of the FTZ status in luring
more investment to the island, the uncertainty in the process has
begun creating a lot doubt on the part of investors, especially
Japanese, he added.
Despite that the Indonesian government's expressed commitment
to the plan, the progress in the drafting of a law which will
grant the island the FTZ status has been too slow.
The National Economic Recovery Committee (KPEN) has repeatedly
criticized the slow progress in the drafting, saying that the
much-anticipated law was very important to strengthen legal
certainty for investors interested in Batam.
An FTZ status would enable companies on Batam to import goods
without paying customs duties and taxes, pending their eventual
processing, transshipment or export.
The island is home to hundreds of export-oriented
manufacturers, mostly international companies.
The industrial island was declared a bonded zone area in 1978.
But after decades of operation, Batam is now more like an FTZ as
local authorities give greater tax incentives to investors in a
bid to boost investment activities.
But existing investors are still worried that the government
might suddenly change the current FTZ-like benefits. In a bid to
attract more investment, a law has been drafted to make the FTZ
status legal and permanent.
Elsewhere, Saburo said that, of the total 1,100 Japanese
companies operating in Indonesia, 52 of which are in Batam with a
total investment value of US$429 million.