Jetro survey wide of the mark: Sanyoto

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)