U.S. businesses say corruption a hurdle

U.S. businesses say corruption a hurdle

JAKARTA (JP): American businesses remain committed to
investing and doing business in the country, but said corruption
and policy inconsistency could be possible hurdles.

Louis A. Clinton, president of the American Chamber of
Commerce-Indonesia, said here Saturday that American investors
would continue to come here because of the sustained political
stability and large market potentials offered by the country.

Clinton quoted U.S. Ambassador to Indonesia J. Stapleton Roy
as saying that Indonesia would become the fifth largest economy
in the world and a developed country by 2020.

"It will occur faster if inefficiencies created by corruption
can be eliminated. It is one of the issues Indonesia is difficult
in dealing with because of budgetary constraint in improving
government employees' salaries," Clinton said.

He added that American businesses would prefer pursuing a
constructive engagement to reduce corruption practices here
rather going to a confrontational approach.

"We are going to work on it with a constructive engagement,
work with the country and explain why it is important to have
transparency in your business venture, and it will make Indonesia
more competitive," Clinton said after the closing of the 53rd
conference of the Asia-Pacific Council of American Chambers of
Commerce (APCAC) here.

The conference was attended by 21 delegates from American
Chambers in the Asia-Pacific countries. The conference listed
common issues to be brought before the annual meeting of American
Chambers in Washington next June.

A statement issued by the council following its two-day
meeting said; "APCAC supports efforts by the U.S. government to
promote transparency in international procurement and to deal
with governments throughout the world to adopt and to enforce
measures against bribery and corruption in all business
transactions."

The newly-appointed APCAC chairperson, Ken Richeson, said:
"There is a feeling within the business community that if
companies from all countries operate in the same category, it
will be beneficial for businesses as a whole."

He said corruption was not an issue limited to one particular
country as it was found in almost every country, even in the
United States. "It is something everyone worldwide needs to work
against."

The U.S. State Department's annual human rights survey of 194
countries and territories, announced earlier this year, found
that the fruits of Indonesia's booming economy are widely
dispersed but that "pervasive corruption remains a problem."

And last month, Hong Kong-based Political and Economic Risk
Consultancy Ltd. rated Indonesia as the most corrupt country in
Asia.

To reduce the level of corruption here, Clinton suggested, the
Indonesian government must improve the well-being of civil
servants by increasing their salaries.

"I think the main thing is that you have a very large number
of civil servants, but they do not get paid very well. In
Singapore, some government officials get some US$100,000 a year;
here, you have director generals that make less than $1,000 a
month," Clinton said.

He said U.S. businesses have also been concerned about
Indonesia's policy inconsistency. He cited the national car
policy, which grants only PT Timor Putra Nasional with tax and
duty breaks to develop a national car, as an example of policy
inconsistency.

"American companies are very compliance-oriented. If the rules
are clear, they obey the rules. So, when you have changes and the
rules are not applied consistently, it creates problems for
American businesses," Clinton said.

Similarly, he said, the American Chamber of Commerce-Indonesia
also got concerned when U.S. policies affect Indonesian matters,
like the linkage between trade and human rights issues.

"We try to educate Americans on all positive things about
Indonesia because Americans are largely ignorant about
Indonesia," Clinton said.

Ken agreed and said: "We do not believe that economic and
trade sanctions are the proper way to approach issues like human
rights. Human rights issues should be approached using other
venues rather than using trade sanctions."

In its statement, APCAC condemned the U.S. government's
unilateral trade sanctions and boycotts as a means of attempting
to influence policies of foreign governments and suggested that
it discontinue the use of such sanctions and boycotts.

The council also supported the unconditional permanent renewal
of most favored nation status for China and China's entry into
the World Trade Organization (WTO).

"China's entry into the WTO must be on a sound commercial
basis that both reflects its status as a major trading power and
serves to strengthen the rules-based trading system established
by the WTO," the statement read.

It supported a strong American business presence in Vietnam as
it will generate jobs for U.S. exporters and will improve
opportunities for broad-based economic development and Vietnam's
participation in the community of nations. (rid)