Jetro survey wide of the mark: Sanyoto

JAKARTA (JP): State Minister for Investment Sanyoto Sastrowardoyo said yesterday that the latest survey of the Japan External Trade Organization (Jetro), which describes Indonesia's bureaucratic procedures and customs services as the most difficult in ASEAN, did not reflect the facts.

"Jetro's survey does not reflect the facts and does not represent the judgment of most Japanese investors in Indonesia," he said in a hearing with the House of Representatives.

In its survey of the investment climate of the member countries of the Association of Southeast Asian Nations (ASEAN), Jetro ranked administration procedures as the second most difficult problem encountered by Japanese investors in doing business in Indonesia, after customs services.

Increases in wages was ranked in the third place, taxation in the fourth and fluctuations of currency in the fifth.

According to Jetro's survey, the administration and taxation problems were exclusive to Indonesia; as neither is considered an obstacle in other ASEAN countries.

In yesterday's hearing with the House's Commission for Investment, Industries and Mining, Sanyoto said that the results of Jetro's survey also did not reflect the current trend of the country's foreign investment activities.

"If Jetro's findings are correct, why do foreign investments continue rising in Indonesia?" he asked.

Double

Sanyoto, who is also the chairman of the Investment Coordinating Board, said the value of foreign investment approvals, which reached US$23.7 billion in 1994, was expected to double this year as the result of improvements in the country's business climate.

In the period between Jan. 1 and June 15, the value of foreign investment approvals reached US$20.03 billion, nearly the same as the total value of foreign investment approvals in 1994, he said.

He said that the value of Japanese investments, which also rose to over $1 billion last year from around $836 million in 1993, was also expected to markedly increase this year.

"From January to June 15 alone, the value of the Japanese investment approvals already reached $824 million," he said.

Sanyoto acknowledged, however, that foreign investors still encountered a number of administration problems, especially in the provinces, despite the government's decision in 1993 to reduce bureaucratic backlogs in licensing processes.

He said that foreign investors still had to get a number of licenses from different offices, such as land clearance permits from the secretary of the provincial administration, building permits from the local office of the Ministry of Public Works and operating licenses from the Provincial Investment Coordinating Board.

"Ideally, provincial administrations should provide one-stop service to facilitate new investment projects," he said, adding that his office and the provincial administrations were studying possible solutions to the licensing problem.

Sanyoto said that his office was proposing tax and non-tax incentives for investors doing business in Indonesia's eastern provinces.

The proposed incentives will include a cut in the income tax rates, he said, as well lower lending rates and more favorable lending requirements. (hen)