Susilo told to fix investment climate

Susilo told to fix investment climate

Zakki P. Hakim, The Jakarta Post, Singapore

Singapore is hopeful that Indonesia's business climate will
improve following its successful presidential election, Prime
Minister Lee Hsie Loong said here on Monday.

"In Indonesia, a new president is elected. The markets have
reacted positively to the election of Dr. Susilo Bambang
Yudhoyono as president, and investors are looking forward to an
improvement in the business climate," Lee said in part of a
speech to open the annual investment and trade forum, the Global
Entrepolis @ Singapore (GES) 2004.

The five-day event involves some 10,000 participants from 30
countries, including a delegation from the Indonesian Chamber of
Commerce and Industry (Kadin).

In a brief meeting later in the day with Kadin chairman M.S.
Hidayat and other officials, Lee said he also expected Indonesia
would recover from its economic problems under Susilo, who has so
far received a positive response from financial markets.

"Next month, the Prime Minister will visit Jakarta to
congratulate the new president," Hidayat said, adding that
Singapore would soon urge a meeting with senior officials and
business players from the private sector of both countries.

Susilo will be sworn in on Oct. 20, when he is also expected
to announce his Cabinet.

Analysts have said Susilo needed to form a credible and
business-friendly Cabinet to indicate to the investment community
that he was determined to resolve the various uncertainties that
have discouraged investors from entering the country.

Singapore is a major source of foreign investment, which is
crucial for accelerating economic growth, but which has been
weakening over the past few years.

According to the Investment Coordinating Board, foreign direct
investment from the city-state reached US$692.4 million last year
through 5,000 companies, making it the fifth largest investor to
Indonesia.

For the past couple of years, Singaporean firms have been
aggressive in buying key local assets. Recent acquisitions
include: 42 percent shares in telecommunications company PT
Indosat by Singapore Technologies Telemedia; 62 percent shares in
Bank Danamon by a consortium led by Temasek Holdings; ownership
of Bank International Indonesia by a consortium comprising
Temasek and South Korea's Kookmin Bank; and 34.3 percent shares
in automotive giant PT Astra International by Singaporean auto
firm Cycle & Carriage.

Meanwhile, Singaporean Foreign Minister George Yeo urged in an
earlier meeting with Kadin officials that the next government
resolve legal uncertainties, complex investment regulations and
unfavorable labor laws to attract new investment to the country.

"Investment regulations have been confusing businesses,"
Hidayat quoted Yeo.

Yeo also promised that Singapore would encourage its
businesses and their partners to invest in Indonesia if the new
government simplified regulations and ensured fair competition.

GES expects to attract more than 3,000 leading executives,
entrepreneurs and venture capitalists from across the globe, with
high participation from India and China, as well as the U.S.,
Japan, Russia, Korea and regional groups from Southeast Asia, the
Middle East and the European Union.