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.