Japanese group to help resolve looming power crisis

A'an Suryana The Jakarta Post Jakarta

The looming electricity crisis in this country is worrying Japanese investors and is one of the various problems discouraging them from making new investments here.

A press release issued last week by the Office of the Coordinating Minister for the Economy said that the government, with the help of the Jakarta Japan Club (JJC), would try to resolve the power supply problem, focusing on improving the financial soundness of state-owned electricity company PLN and increasing the capacity of existing power plants.

The statement did not provide further details about the plan.

Indonesia may suffer a serious power supply problem in 2004 and 2005 unless there is sufficient new investment in the power sector to generate more electricity amid fast rising demands.

Japan is one of the country's largest foreign investors and trading partners. Maintaining the flow of investment, which has been dwindling in the past couple of years, is a top priority of the Indonesian economic agenda, as investment is key to a sustainable economic growth that could generate enough jobs for millions of unemployed.

JJC members consist of top executives of all Japanese businesses operating in Indonesia.

Since last year, the government has been working with JJC to try and resolve the various problems faced by Japanese investors in Indonesia.

At least 81 different problems faced by Japanese businessmen had been drawn up in detail, and according to Mahendra Siregar at the Office of the Coordinating Minister for the Economy, 21 problems had so far been resolved.

He said that the government was now working hard to resolve the remaining problems in cooperation with JJC, and was optimistic that they could be overcome.

"The cooperation program (with JJC) began last January, but even within this short period of time, we have already been able to produce some results," Mahendra told The Jakarta Post on Sunday.

Among the 21 problems which have been resolved are those focusing on customs and excise, taxation and labor issues.

In regards customs and excise, government measures had focused on how to combat illegal levies and to accelerate customs clearance of imported raw materials.

In the tax sector, various uncertainties had also been resolved, one of which dealt with how to settle miscalculations of corporate tax.

In labor, a clearer definition on lawful employee strikes was provided, as well as a more appropriate severance pay policy.