Susilo pledges to curb red tape, corruption

Susilo pledges to curb red tape, corruption

Christopher Torchia, Associated Press/Singapore

Indonesia's president vowed on Wednesday to clear away red tape,
corruption and other obstacles that have long deterred foreign
investment in his vast nation.

President Susilo Bambang Yudhoyono also said his government
planned to achieve annual growth of 6.6 percent over the next
five years, with a planned investment of US$150 billion (euro115
billion) in infrastructure. Growth was 5 percent in 2004.

"Since the 1997 financial crisis, investment in infrastructure
has steadily been declining," Susilo said at a breakfast meeting
with business executives in Singapore.

"As a result, roads are deteriorating, power is in short
supply, new ports are not being built, and so on."

Susilo, a former military general who won Indonesia's first
direct presidential election last year, spoke in English and
projected confidence.

The polished manner of Susilo contrasted with that of his
predecessor, Megawati Soekarnoputri, who often appeared
uncomfortable in public. But some questions from the audience
highlighted problems that make Indonesia a difficult place to
invest even as democracy and political stability take hold.

One businessman who organized international conferences on the
resort island of Bali said business had dropped off by 90 percent
since terrorist bombings there in October 2002. He asked if
Susilo could push for the repeal of foreign travel advisories
warning of the danger of travel to Indonesia.

Susilo did not specifically address the advisory issue, but
said his government would "do our best to maintain our political
stability and security," adding that his government would
"continue conducting very intensive operations to combat
terrorism."

The operator of a company that delivers goods by air express
to Indonesia said he feared planned changes in customs
regulations would lead to "additional restrictions."

Another man said he spoke for everyone in the room when he
appealed for an end to red tape for investors who face time-
consuming visa requirements when they travel to Indonesia. The
audience applauded.

Susilo acknowledged the problems, but said they could not be
solved "overnight".

"We intend to streamline the bureaucracy in many key areas,
including customs," he said. "We believe that increasing
transparency and reducing red tape is the necessary first step to
address corruption."

Indonesia will also amend its tax, labor and investment laws
to make the business climate more attractive, said Susilo, who
holds a Master's degree in business administration from Webster
University in Missouri in the United States.

After the breakfast, Hassan Wirayuda, Indonesia's minister of
foreign affairs, and Lim Hng Kiang, Singapore's minister for
trade and industry, signed an investment guarantee agreement.

The deal grants preferential treatment to investors from each
other's countries and outlines options in the event of disputes.

Susilo said two-fifths of the US$150 billion investment in
infrastructure would come from domestic sources, including the
government budget, banking loans and capital markets. Donor and
multilateral agencies will provide another US$10 billion, he
said.

The president said he hoped the domestic and international
private sectors would provide the rest of the needed investment.
A tender process for 91 water, power supply and other projects
with a total value of more than US$22.5 billion will begin next
month, he said.