Poor services still hamper investments
JAKARTA (JP): Poor services, inadequacy of regulations and high-cost economy are hampering investment, chairman of the Jakarta investment coordinating board, Ery Chayaridipura says.
Ery said yesterday the three factors had become the main constraints in the city administration reaching its target in the Sixth Five-Year Development Plan (Repelita VI).
"Services must be improved so investors get everything they need, including information as soon as they want. Whereas proper regulations are needed to guarantee a healthy business climate," Ery said, adding that illegal levies and bribery, which cause high-cost economy, must be eliminated.
To attract more investors the administration should provide adequate infrastructure such as roads, electricity and telecommunications. Clear regulations on coordination among related offices in charge of investment affairs and establishing infrastructure are badly needed, he said.
A one stop service for investors to obtain permits quickly must also be made available.
According to Ery, the city administration must deal with these problems appropriately if it wants to reach its target of gaining Rp 127 trillion (US$56.44 billion) in investment commitments in this Repelita VI, beginning in April last year.
He said eliminating the obstacles is imperative because most of the target is expected from private investors. "We expect 6 percent of the investment from the government."
Board records show that investment commitments in the first six months of this year reached $1.28 billion.
About $350 million worth of commitments is from 63 foreign investors, while the remaining $935.81 million (Rp 2.05 trillion) is from 66 domestic investors.
Ery admitted it would be difficult for the administration to reach the target. He, however, said he was optimistic because he saw the administration's determination in eradicating the obstacles, and the significant economic growth.
"The target was actually set based on the Jakarta economic growth of 8.23 percent per year," Ery, former head of the city development planning board, said.
He said he planned to visit all offices concerning investment affairs periodically to make sure that investors obtain good services and complete information.
"However, an investor must also provide the proper documents as required by regulations."
Speaking of the investment climate, Ery said that there has been a transition since the beginning of the Sixth Five-Year Development Plan. "Investors tend to invest in service, business and tourism sectors."
The transition is influenced by various aspects such as land prices. "Investments which need large areas and water are not interesting to investors. Land is too expensive here," he said.(yns)