Poor coordination mars subregion's growth: Official

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.