Provinces asked to honor contracts signed by Jakarta
Provinces asked to honor contracts signed by Jakarta
JAKARTA (JP): President Abdurrahman Wahid urged provincial and
district administrations on Monday to honor business contracts
concluded by the central government and to act as good hosts to
businesses.
Abdurrahman told a meeting with provincial governors, who are
holding a two-day conference, that efforts to promote foreign
investment by the central government would be futile if local
administrations did not help maintain a conducive business
climate.
"We have to abide by our international commitments and local
administrations cannot change business contracts without approval
from the central government," the President said.
He cited a recent decision by the central government which
ruled that autonomy rests with provincial administrations, not
district administrations.
"Provincial administrations will act as the extended executive
arm of the central government in the region," he said.
It was initially expected that the new law on regional
administration, which will become effective in January, will vest
district administrations with autonomy.
But given the lack of bureaucratic capability at most district
administrations, the Cabinet recently decided to vest provincial
administrations with autonomy for the next two years at least.
District administrations, he said, had no right at all to
change business contracts sanctioned by the central government,
and any changes intended for existing business contracts should
be proposed to the central government.
He said the numerous claims, either reasonable or insensible,
were made to provincial administrations either by district
administrations or locals.
The President said provincial administrations should be able
to act as an effective bridge or conduit of the interests of
district administrations to the central government.
Abdurrahman reiterated the crucial importance of foreign
investment for helping accelerate Indonesia's economic recovery.
"Therefore, promotion of foreign investment was made one of
the top priority programs of my administration," he said.
The problem, though, is that investors will not come to
Indonesia if security and political stability, most notably in
provinces, is not maintained.
In fact, he added, most foreign investors have decided to wait
for the outcome of the upcoming annual session of the People's
Consultative Assembly (MPR) before making decisions to do
business in the country.
"They want to see whether I'll be toppled or not from
government," he said, referring to the MPR session in August when
the President will account for his administration's performance
since October.
He added, however, that the government and people should not
wait for foreign investors to come to the country.
"We should do something to maintain our economic recovery.
Hence, an export drive should be made to fuel economic
activities, creating jobs," the President said.
But he again warned that export promotion would become a
futile exercise if "we don't honor our international
commitments".(prb/vin)