Monday, 8 July 2013


While being designed to increase investment, the investment policy adopted by the government was also meant to solve various problems which called for greater effort. Unless immediately exercised, it was feared that investors would turn their attention to other countries where the climate was more conducive to investment and ensured better security. A sound government’s policy was needed to crack various problems and motivate investors to invest in Indonesia.

Chairman of the Association of Indonesian Real Estate, Sanny Iskandar stated in Jakarta on Tuesday [28/5] that regional autonomy could be benefited by the governments to compete against each other to drum up more investors in their respective regions. Such a condition could be attained if the policy adopted by the local governments was investor-hospitable. The provincial governments must assess and decide the industry in their region. As initial step the provincial government must seek for big companies with whom to collaborate by giving certain concessions.

By such measures it was expected that if the company succeeded they would draw other investors in a chain engagement process. The successful company would pose as magnet to other industrialists. According to Sanny, the provincial governments could ask the management of harbors to collaborate in building industrial estates well integrated with harbors.

Sanny stated that provincial governments needed to build industrial estates which were well linked to infra-structure like highways, harbors, powerhouses, water resources, drainage system and telecommunication network. Facilities for permit application procedures based on one-stop service system and legal certainty were all the essential need for investment process.

Sanny saw that many companies complained about had business climate which was not conducive to progress and there was no legal certainty because the policy adopted by the local government was not synchronous with that of central government. Many regions were too popularity oriented which scarified investment climate. There were even governors of provincial heads who acted like Mafia Godfathers: if they did not get protection money they would disturb investors. This must not happen. “We urge provincial government to run investment policy which was investor-friendly” Sanny remarked.

Meanwhile senior researcher at the institute for development of economics and finance [INDEF], Aviliani, stated that legal certainty could not be confided to the regions but it should be solved at national level with law enforcement. When policies were put in effect without law enforcement, provincial heads would acts as they please to change policies without considering the consequences. Supposedly regions were not given too big portion of power as they had no capability to make policies which were synchronous with progressive efforts of the business world.

Supposedly the provincial heads as host collaborated with the businesspeople to accelerate growth, enhance development and opening more employment opportunities. According to Avilliani, there should be sound collaboration between businesspeople and the provincial government. Investment climate should be conducive to growth and there must be legal certainty so investors would survive and contribute to regional development.

As government’s strategic partner, business players were playing active roles in infra-structure development as proclaimed by President SBY through the Indonesian Economic Development and Expansion Acceleration Program [MP3EI]. However Avilliani admitted there was a list of problems to be settled by the regional government, among others to build infra-structure, open job opportunities and set up uniform regulations in every region so business people were not disadvantaged. (SS)          

Business News - May 31, 2013

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