RI less attractive to Taiwan
RI less attractive to Taiwan
JAKARTA (JP): A Taiwanese economic study illustrates that
Indonesia is less attractive for doing business than Malaysia and
Thailand.
Tain-Jy Chen, a visiting director of the Chung-Hua Institution
for Economic Research, said yesterday that out of the 253
Taiwanese companies established in five Southeast Asian countries
since 1960, only 39 were set up in Indonesia, as compared to 62
in Thailand and 123 in Malaysia.
Vietnam attracted 21 while the Philippines only attracted
eight of the companies.
According to his study, which was conducted with cooperation
from economic research centers in Asia, including Indonesia's
Centre for Strategic and International Studies (CSIS), about one
third of Taiwanese companies in Southeast Asia have a paid-up
capital of between US$1 million and $3 million.
"Indonesia is still more attractive than Vietnam and the
Philippines for Taiwanese investors," he said during a seminar at
CSIS on Taiwanese investments in Southeast Asia .
Licensing
The CSIS's chief economist, Mari Pangestu, said that Indonesia
is less attractive than Malaysia and Thailand partly due to its
complicated bureaucracy, which hampers licensing processes.
"The government has introduced a series of deregulatory
measures but are very slow in implementing them," she commented.
Mari, who was also involved with the Taiwanese study, said
that it takes 14.3 months to complete the documents required for
investment projects in Indonesia, as compared to the 11.7 months
needed in Malaysia and the 10 months in the Philippines.
She added that it takes 17 months in Thailand and 15 in
Vietnam to finalize investment documents.
She suggested that the Indonesian government continue to
streamline bureaucratic procedures and improve the enforcement of
existing deregulatory measures. "Otherwise, Indonesia will
continue to fall behind Malaysia and Thailand," she asserted.
She also said that poor infrastructure was a major complaint
lodged by Taiwanese investors when doing business in Indonesia.
The study found that almost 40 percent of the surveyed
Taiwanese companies strongly required an improvement in
infrastructure and legal certainty in Indonesia to support their
operations, she said.
"I believe that the Indonesian government should improve the
legal infrastructure to allow for more certainty when doing
business here," she said.
Marie added that Indonesia should try to get more investment
from Taiwan, considering that Taiwan usually invests in labor
intensive small and medium sized businesses overseas.
Because most Indonesian companies are also small it would be
easy for them to deal with Taiwanese partners, she concluded.
Taiwan, according to the Investment Coordinating Board, is the
seventh biggest foreign investor in Indonesia. It has a total
investment commitment of $6.6 billion spread over 327 projects
from 1967 to Jan. 31 this year. (fhp)