Riau more attractive to S'pore

Riau more attractive to S'pore

SINGAPORE (AP): A new Indonesian law giving local regions more autonomy has made the country more attractive to business people in neighboring Singapore, the city-state's foreign minister said.

Indonesia enacted a fiscal decentralization law in January that gives additional powers and a greater share of government revenue to the vast archipelago's 364 local districts.

"With regional autonomy we can expect more Singapore businessmen to explore business opportunities in the regions and deal directly with the provincial authorities," Foreign Minister S. Jayakumar said in Parliament on Tuesday.

Despite Jayakumar's optimism, investment prospects in much of Indonesia are uncertain because of recent communal violence in several regions and concerns surrounding President Abdurrahman Wahid's ability to govern the country.

But prospects appear to be better in the mineral-rich Riau province, which is only 20 kilometers (12 miles) from Singapore. Singaporean investors hope more autonomy there will mean less bureaucratic red tape, since transactions won't have to go through the capital, Jakarta.

"Riau will be especially attractive, I think, to our businessmen because of the region's proximity to Singapore and the already extensive links which many of our private sector have in the area," he said in response to minister's questions about Singapore-Indonesian relations.

Riau's people have been pushing for more autonomy amid complaints that profits from natural resources there lined pockets in Jakarta.

Jayakumar said Singapore had set up a consulate and a trade office in the capital of Riau, Pekanbaru, in anticipation of further business in the region.

Singaporeans have invested heavily in Bintan and Batam, the Riau islands closest to the wealthy city-state. Most of the golf and beach resorts and some of the industry on the islands are controlled by Singaporeans.