Poor coordination mars subregion's growth: Official
By Benget Simbolon Tnb.
MANADO, North Sulawesi (JP): Poor coordination among the four countries developing the East ASEAN Growth Area (EAGA) has hampered the implementation of the subregion's trade, investment and tourist cooperation programs, a government official said yesterday.
"We have a kind of master plan to develop the EAGA, but a lack of coordination among government agencies in the four countries has slowed its realization," Kosim Gandataruna, an assistant to the coordinating minister for production and distribution, told a seminar here on investment opportunities in eastern Indonesia under the EAGA cooperation scheme.
The EAGA, one of three subregional cooperation zones under the Association of Southeast Asian Nations (ASEAN), was established in 1994 to cover Brunei, Indonesia's provinces of East Kalimantan, West Kalimantan and North Sulawesi, Malaysia's eastern states of Sabah and Sarawak and the southern Philippine islands of Mindanao and Palawan. The EAGA was established to promote trade, investment and tourism cooperation in the area.
Kosim said the ministers from the four countries in charge of developing the EAGA held meetings every six months to discuss cooperation programs. And 13 working groups deal with the development of 13 economic sectors in the area. The working groups meet more frequently than the ministers.
"But bureaucratic problems hamper the implementation of their decisions, which have to be discussed with other government agencies related to the programs," he told the press after reading a speech by Coordinating Minister for Production and Distribution Hartarto at the seminar, which was officially opened by Minister of Information Harmoko.
Kosim cited the simplification of export and import procedures in the growth area as an example of the problem: "In Indonesia, for example, the Office of the Coordinating Minister for Production and Distribution has to first discuss (the matter) with the Directorate General of Customs and Excise, the Ministry of Transportation, the Ministry of Industry and Trade and the provincial administrations before an agreement can be implemented."
"Such a problem also happens in the other three countries," he said, adding that there seemed to be no quick solution to the problem.
Kosim admitted that Indonesian provincial administrations could not make decisions without central government approval.
Asked how to overcome the problem of poor coordination, he replied: "We're considering simplifying bureaucratic procedures, such as giving more authority to provincial administrations."
"For example, we will allow governors and regents to approve investments up to a certain level. For regents, the level may be up to US$25 million," he said.
Replying to questions on the inadequate infrastructure which discourages investors from entering the growth area, Kosim said the four governments would properly address the problem. He did not elaborate.
A recent study sponsored by the Asian Development Bank (ADB) concluded that while the EAGA offered many investment opportunities, project implementation may be hampered by depleted natural resources, poor infrastructure and a shortage of skilled workers.
The study identified the following sectors for cross-border investment: fertilizer, paper and paperboard, transport equipment, clothing, food, live animals, iron and steel, chemicals, minerals, animal and vegetable oils and non-fuel crude oil.
The population of EAGA was estimated at 30 million in 1995 and was projected to grow by 2.5 percent a year, reaching around 44 million by 2010.
According to the study, the other issues needing to be addressed were the appreciation of exchange rates, tariff and non-tariff barriers and a lack of investment incentives.
The three-day seminar, organized by the Confederation of ASEAN Journalists (CAJ), is being attended by approximately 100 journalists from the seven ASEAN member countries.