RI-Japan economic meeting spells out problems

The Jakarta Post, Jakarta

A one-day meeting between the government and a visiting Japanese delegation on economic and investment issues earlier this week concluded without a firm action plan to solve investment problems.

Ministry of Foreign Affairs Director for East Asia and the Pacific Hamzah Thayeb said that the meeting was just a preliminary one, aimed at identifying Indonesia's problems in attracting investors.

"We've tried to identify what our problems are and we took notes on what they think the main problems are," Hamzah told The Jakarta Post on Wednesday.

Based on the discussion, he said that the problems hampering investment were conflicting regulations, high import tariffs, poor infrastructure and labor demands.

Hamzah said that they also discussed the possibility of additional grants from Japan.

The meeting on Monday was chaired by Ministry of Foreign Affairs Director-General for Asia and Africa Makarim Wibisono. The Japanese delegation was led by Japan's deputy foreign minister Ichiro Fujisaki.

Previously, a diplomat at the Japanese foreign ministry was quoted as saying that the outcome from the meeting would likely be in the form of a recommendation or a list of action plans to be carried out by relevant ministries or agencies.

Hamzah, however, said that a second meeting would hopefully settle on some action plans and recommendations from the Japanese delegation to find solutions.

"We don't know yet when we'll hold the second meeting, but hopefully we'll have some concrete resolutions," said Hamzah.

Various bilateral discussions and public seminars have been held over the past few years and similar issues were pointed out, yet no strong action seems to have been taken by the government and thus foreign investment remains weak.

Asked if the meeting had been fruitless, Hamzah simply reiterated that the meeting was only a "preliminary" one.

"Well, I wouldn't say it was fruitless. The fact that we sat there together to figure out ways to boost investment into our country and advance our economic cooperation with Japan was a good start," he asserted.

Foreign investors have frequently cited the lingering problems of conflicting laws, labor disputes, poor infrastructure and legal uncertainty as the key contributors to Indonesia's unfavorable investment climate.

Japan has been a long-time major investor here. The latest data from the Investment Coordinating Board (BKPM) shows that during the first seven months of the year, Japanese investors topped new investment approvals in Indonesia.

Around US$916 million worth of new investment approvals from Japan were recorded, accounting for some 28 percent of total approved foreign investment.