U.S. firms to continue investment in Indonesia

U.S. firms to continue investment in Indonesia

Fitri Wulandari, The Jakarta Post, Jakarta

American businesses will continue to invest in Indonesia this
year despite the upcoming general and presidential elections, a
U.S. business representative said on Thursday.

U.S.-Indonesia Business Council chairman Robert W. Haines said
Indonesia's improving macroeconomic condition provided a
favorable atmosphere for U.S. companies to continue or start
investing during the election year.

"We heard some people said investment should wait until the
election is over. But we think the structure for investment
exists and American investment does not have to wait," Haines
said at a press briefing.

"We are willing to come out, we want to invest and the
opportunity is there," he added.

The country's economic indicators have been improving over the
past year, but analysts have said that investors would prefer to
wait and see due to the protracted seven-month election period
this year, with the general election in April followed by the
country's first direct presidential election in July. Indonesia
needs more investment to help push economic growth higher to
create enough jobs for the millions of unemployed people.

Haines is leading a delegation of 25 U.S. businesspeople from
14 leading U.S. companies on a five-day visit to Indonesia to
discuss the opportunity for investment and trade with legislators
and government officials at both local and national levels.

Members of the delegation are from leading companies, such as
oil and gas company Unocal Corporation and ExxonMobil, Cisco
System, FedEx, General Electric Company, General Motors, Motorola
and Oracle Corporation.

U.S-Indonesia Business Council is part of the U.S.-ASEAN
Business Council, which is a private business organization aimed
at promoting trade and investment between the United States and
Southeast Asian countries (ASEAN). The council has some 200 U.S.
companies as members.

According to Haines, investment from U.S. companies in
Indonesia stands at around US$10 billion.

Walter B. Lohman, executive director of the U.S.-ASEAN
Business Council, said Indonesia held many investment
opportunities for U.S. investors.

"Our companies are interested in investing more in Indonesia.
That is why we are here in the country for the long term and that
is what the dialogue is about," Lohman said.

While noting progress the government has made in promoting
investment, Haines said the government needed to address issues
like transparency, rule of law and sanctity of contract as well
as lack of clarity in the Regional Autonomy Law to help reduce
the risks of their potential investments.

"Businesses would like to have predictability and stability of
their investment in Indonesia. Those are very important to
business," Haines said.

Haines said investors were concerned about having their
contracts recognized and having a fair hearing at court when
disagreement arose with the government or Indonesian companies.

Transparency in regulations is also another thing that the
business sector would look into. Businesses would like
information on regulation changes and be invited to provide input
on how changes in regulations should be made, Haines said.

Lohman said investors would also like to see clarity in the
Regional Autonomy Law to reduce uncertainty in investment.

"Right now, there is the local, the provincial and the
national level. Each has a role in investment. And it is not
always clear which one you have to go to," Lohman said.

However, Haines said some local governments had made progress
by setting up a one roof system for investment approval.

Lohman added that with globalization, Indonesia had to compete
with the whole world for investment.

"Indonesia does not lose its attractiveness. But it is an
increasingly competitive world. So we are talking about
consistencies which are more important in competitiveness,"
Lohman said.