Kadin skeptical about new investment policy
The Jakarta Post, Jakarta

The business community, tired of the government failing to deliver on promises, is demanding it come through this time by implementing its latest economic policy package to increase investment and infrastructure development in the country.

"Implementation is certainly the key word here. The government must declare this year the year of implementation -- of actually carrying out its planned policy actions," the chairman of the Indonesian Chamber of Commerce and Industry (Kadin), M.S. Hidayat, said Tuesday on the sidelines of the powerful business group's annual gathering.

Although the business community welcomes and supports the policy package, Hidayat said there was inevitable skepticism from past experience where similar policy announcements proved hollow.

"We don't have to go too far back and only have to look at last October's incentive policy package, which has been hampered because many regulations related to its implementation have yet to be amended.

"This also happened to the Infrastructure Summit, as many investors cannot commence with their projects due to similar regulation obstacles," Hidayat said, referring to government's offering of 91 major infrastructure projects to investors last year, with Kadin the event's main sponsor.

The government last week issued a package of 85 policy actions in five sectors -- bureaucracy, taxation, customs and excise, labor and small and medium-sized enterprises -- that it plans to implement within the next three years to improve the investment climate.

This follows a similar package of 153 policy actions for infrastructure development, aimed at encouraging more private participation through fiscal incentives.

Hidayat added that the implementation timeframe was too long.

"I also doubt the policy actions can be implemented in time if they are based on laws still being deliberated in the House of Representatives," Hidayat said.

"The policy actions should be based on presidential regulations or decrees, for example, so they can be executed promptly, parallel to the amendment of the related laws."

Hidayat said the government also should focus on eradicating the chronic problem of the high-cost economy, an action which would not only support the policies, but also strengthen local businesses for investment and exports.

Meanwhile, the chairman of the National Economic Recovery Committee, Sofjan Wanandi, stressed the importance of consensus in the political domain for the successful implementation of the policies.

"Everyone must agree with the improvement and increase of investments, and the government must see to this," he said. "Let's not say we support the policy packages, but later badger and politicize every investment project for our own political interests."

Sofjan said the government must implement the policy packages by 2007 at the latest.

"If it's later than that, then we will have lost the momentum to fix our economy," he said. "This is because political tensions will emerge in 2008, as everyone gears up for the 2009 General Elections."

Coordinating Minister for the Economy Boediono, who attended the gathering, asserted the government was serious about implementing the policies, and invited Kadin and the public to set up an implementation monitoring team.
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