Business in Indonesia still relies on political rather than technical or professional support, Vice President Jusuf Kalla said Saturday, which allowed unfair competition among businessmen close to the government.
His remarks, read by Agriculture Minister Anton Apriyantono at the 49th anniversary of Tanjungpura University here, pointed at the continuing prevalence of "delinquent" importers, capital flight and bad business practices of Indonesia's entrepreneurs.
Ever since the economic crisis of the late 90's, the government had introduced various policies to attempting to reestablish economic foundations to create sustainable and high quality economic growth, Kalla had said.
But the fact that the economy had maintained growth rates below seven percent had impeded efforts to reduce the country's unemployment and poverty levels, the statement said.
Most provinces in Indonesia continued to struggle with classic issues, like limited human resources, which has led to an inability to fully utilize the nation's natural resources, Kalla said, as quoted by Antara.
"We are not even obtaining half of our targeted average investments," he said, adding that the government's investment (or public spending) budget was gradually improving, particularly in dealing with structural problems like government infrastructure.
Chris Kanter (chamber of commerce and industry deputy chief of investments, transportation, information technology, telecommunication and tourism) said the government's effort to stymie political lobbying to boost businesses would never be successful.
Even in developed countries like the United States, Chris said, business lobbying continued, adding that it became acceptable when done for an apparent good.
Business lobbying had decreased significantly since the fall of the New Order, he said. Back then, businessmen close to the government had controlled roughly 75 to 80 percent of the business investments in Indonesia, he said.
Chris said the Chamber of Commerce would continue to work to strengthen the local investment climate.
According to data from the State Investment Coordination Agency, investments in between January and September, 2007, had shown a 169.02 percent increase, to US$13.99 billion, from $8.28 billion for the same period a year earlier.
The industry with the highest amount of domestic investment was paper. Paper and plastic manufactured goods gained Rp 14.54 trillion from eight projects.
The food industry came in second, with investments totaling Rp 5.13 trillion for 24 projects. Basic metals industries, metal goods, machinery and electronics followed with a combined value of Rp 3.54 trillion for 17 projects, basic crops and the plantation industry gained Rp 3.4 trillion and the construction sector gained Rp 2.11 trillion.
The transportation sector gained the highest amount of foreign investment, Rp 29.61 trillion for 41 projects, followed by the basic chemical industry, chemical goods and pharmaceuticals, Rp 14.49 trillion, while the metal industry, metal goods and electronic machines gained Rp 6.33 trillion for 98 projects.
Approximately Rp 6.2 trillion in foreign investment went to 53 projects in the food industry and the paper industry, paper and plastic based goods received Rp 6.06 trillion for 11 projects. (anw)
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