Japanese group to help resolve looming power crisis

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.