Long licensing procedures remain problem for investors
JAKARTA (JP): Long licensing procedures in local administrations remain the main problem for investors, even though the government has introduced a series of deregulatory measures, State Minister of Investment Sanyoto Sastrowardoyo said.
"Procedures for investment licensing still consume much more time than promised," Sanyoto, who is also chairman of the Investment Coordinating Board (BKPM), told a three-day coordination meeting on investment here yesterday.
The meeting, opened yesterday with presentations by a number of ministers, proceeds today with closed-door sessions to discuss reports from provincial offices of the board.
Sanyoto said that, in some provinces, licensing procedures still took a couple of months.
Achmad Sobhana, head of BKPM's West Java office, told The Jakarta Post that his issuance of licenses needed for investment projects in his province could take longer than three months due to arduous procedures in the regency institutions.
"Many local officials do not have the sufficient knowledge or skill to issue licenses under the new deregulatory measures introduced by the government," he added.
The deregulatory package issued last October, popularly known as the Pakto 1993, was designed to reduce the time needed for obtaining investment licenses from 42 days to 17.
Investors previously had to obtain a number of letters of recommendation from authorities at the provincial and regency levels for getting permits for land appropriation and plant construction. Under the new plan, they are only required to obtain permits for the construction of their buildings and for the location of their projects. Location permits should now be directly issued by local agrarian offices, while building permits should be issued by the provincial offices of the Ministry of Public Works.
However, BHL Tobing, head of Irian Jaya's BKPM office, said that the complicated bureaucracy in his province also remains a problem for foreign investors.
"Security clearance and approval for foreign direct flights in the province or 'flag permits', for example, must come from Jakarta. It clearly takes time and investors have to wait some weeks for approval," he said, urging that this authority should have been delegated to local officials.
Infrastructure
Djalante, head of Southeast Sulawesi's BKPM office, said that in addition to the complicated bureaucracy, the poor infrastructure of his province have partly discouraged investors from developing businesses.
"There are, for example, only a few flights serving our province and investors must wait some days before visiting there," he said.
Sanyoto said: "We are now trying hard to streamline the complicated bureaucracy."
Sanyoto said that, according to a recent study, long licensing procedures contribute between 12 percent and 18 percent to investment problems in Java, between 11 percent and 26 percent in Sumatra, between seven percent and 10 percent in Kalimantan, between six percent and 20 percent in Sulawesi and between 10 between and 19 percent in other provinces.
Arrogance
Minister of Tourism, Post and Telecommunications Joop Ave told the meeting that lack of coordination among government agencies is also another major handicap in the country's investment activities.
"Some government agencies often feel superior to others and each agency tends to work only on their own programs," Joop said. He added that "this sectoral arrogance" should be discarded to achieve a better result in the country's investment activities.
Joop said that the lack of coordination has resulted in a number of weaknesses both in the implementation of new investment projects and in the promotion of the country's business opportunities overseas.
He said that the rate of the implementation of investment commitments could be higher if BKPM, the ministry of tourism, post and telecommunications, the ministry of mines and energy, and the ministry of public works all worked together.
Joop called for special meetings between BKPM, his ministry and the other two ministries to discuss services for investment activities. This would include the development of infrastructures such as telecommunication facilities, power supply and roads.
Sanyoto promised yesterday to improve efforts to improve services for investors.
Coordinating Minister for Economy and Finance Saleh Afiff said in his opening address that the government is now preparing another series of deregulatory measures which will give more authority to local administrations in dealing with licensing procedures. (hen/fhp)