Major provinces guarantee existing foreign investments

JAKARTA (JP): In an effort to woo foreign investors, officials from the Regional Investment Coordinating Board (BKPMD) of seven major provinces, including Jakarta, gave their guarantee on Tuesday to maintain and protect all existing foreign investments in their respective areas.

Deputy chairman of BKPMD for investment services and facilitation, Yus'an, said the guarantee was made during a meeting of senior BKPMD officials from Jakarta, East, West and Central Java, Yogyakarta, Bali and Lampung at Jakarta's City Hall.

According to Yus'an, such a commitment from the local authorities was urgently needed as many existing foreign investors had started to worry, about the future of their investments in Indonesia, ahead of next year's implementation of regional autonomy.

"That is why we want to assure all foreign investors that we will secure the existing projects and have standard regulations to avoid uncertainties in the permits issued for foreign investment," Yus'an told a media conference.

"What have been decided by the government on existing foreign investments will continue. The regional autonomy will not affect the projects at all," he remarked.

According to Yus'an, a significant change with regional autonomy, however, would be that foreign investors would need to obtain permits issued by regency administrations where the projects are located.

The provincial authorities, he said, would only have the right to supervise the process. In order to avoid different policies (from related government agencies), we would coordinate with the related parties to formulate standard guidelines which will not burden the investors," Yus'an said.

For that purpose, he added, the government would set up "one- roof" services in each regency to settle problems or disputes related to the investments," he added.

Yus'an, whose office is currently under the Ministry of Industry and Trade, further said the government realized that direct investments was the most important factor for economic recovery.

"We seriously want to convince all foreign investors that the country is ready and the implementation of regional autonomy will not cause significant differences," he said.

Yus'an also said standard procedures for investment in all 360 regencies in Indonesia were being discussed by the Ministry of Home Affairs and his office.

"The standard procedures will be issued in December at the latest, so there will be similar interpretations of the regulations in each regency on foreign investment," he added.

"With standard procedures, we hope to have fair competition among the regencies in attracting foreign investments."

Meanwhile, Jakarta's BKPMD chairman Albert Napitupulu said the capital recorded a significant growth in investment this year as compared to last year.

"So far this year, we have 360 contracts for projects from foreign investors worth US$676,773,480 and 44 from domestic companies worth Rp 1,323,753,530,000. However only some 30 percent of this have been realized thus far," Albert said.

Last year, the capital had 298 contracts for projects worth US$524,945,860 from foreign companies and 21 from domestic companies worth Rp 728,936,550,000. Most of them were in the trading and service sectors.

"These investors are given three years to fulfill their contractual obligations before their permits are canceled," Albert added. (dja)