Japanese trade groups meet with Megawati
Japanese trade groups meet with Megawati
Adianto P. Simamora, The Jakarta Post, Jakarta
Japanese investors renewed calls on the government to immediately
improve the investment climate here to encourage foreign
investors to return to the country.
A visiting official from the Japan and Tokyo Chamber of
Commerce and Industry (JCCI) warned that Indonesia had tough
competition from fellow Southeast Asian countries and China to
snag investments from Japan.
"Japanese companies are trying to make up their mind as to
where their investments should go. They (Japanese) tend to decide
on investment areas by measuring them against China," Nobuo
Yamaguchi, the chairman of JCCI, told a news conference on
Tuesday.
Officials from JCCI and the Tokyo Chamber of Commerce (TCCI)
visited Jakarta to study the investment climate in Indonesia.
The lobby groups will also visit the other member countries of
the Association of Southeast Asian Nations (ASEAN). Their main
mission is to compare the investment climate in ASEAN countries
and China.
Japan is one of the largest sources of foreign investment in
the country.
In Indonesia, the lobby groups on Tuesday met with President
Megawati Soekarnoputri. They also held meetings with Coordinating
Minister for the Economy Dorodjatun Kunjoro-Jakti and other
economic ministers.
During the meeting with Megawati, the trade groups raised
three issues that would help encourage Japanese investors to make
new investments here. Those were minimum wage, tax incentives and
legal uncertainty.
He said that the minimum wage in Indonesia was relatively
higher compared to the wage in China and that was one factor
discouraging Japanese investors from returning to the country.
"The current minimum wage in Indonesia is higher compared with
China's," he said.
Earlier reports have said that some Korean manufacturers had
relocated their operations to other countries partly due to the
high wage here.
Japanese investors have long called for the introduction of a
tax holiday, a policy that is also applied in China and other
ASEAN countries to woe foreign investments.
China, for instance, offers tax holidays to foreign investors
during the first two years of their operations.
China, along with its territory Hong Kong, last year attracted
80 percent of the foreign direct investment (FDI) in the Asian
region outside of Japan.
Japan's Bank of International Cooperation survey showed that
Indonesia had continued to fall further behind China and Thailand
in the competition for Japanese investment.
Legal uncertainty has also been a major factor creating
confusion among foreign companies in doing business here. One
prominent case is the recent court ruling that said the local
unit of Canadian life insurance giant Manulife Financial Corp.
was bankrupt. The controversial ruling was then overturned
following pressure from the government.