From The Jakarta Post http://www.thejakartapost.com/detailbusiness.asp?fileid=20060317.L02&irec=3

Government to set up seven new FTZs: Kalla

Rendi Akhmad Witular and Anissa S. Febrina, The Jakarta Post, Jakarta

With foreign investment inflows yet to take off, the government plans to set up seven new free trade zones (FTZs) to attract more international firms to Indonesia, Vice President Jusuf Kalla says.

"In order to increase the flow of foreign investment, the government will set up a national committee tasked with making arrangements for the setting of seven new FTZs, besides the existing one on Batam island," Kalla told a group of Singapore investors during a seminar Thursday.

The FTZs would be set up in Sumatra, Java, Kalimantan and Sulawesi, with each FTZ focusing on a particular sector.

The FTZ in North Sumatra, for example, would concentrate on the agribusiness sector, those in East Kalimantan would focus on the oil, gas and mining sectors, while those devoted to manufacturing would most likely be established on Java.

Kalla said that Indonesia had much to offer the international business community that was not available in other countries, such as abundant natural resources and manpower.

"As a result of the current turbulence in the energy market, it is now industry that is following energy, rather than the other way around," he said.

National Economic Recovery Committee (KPEN) chairman Sofjan Wanandi said that the setting up of more FTZs was primarily aimed at overcoming bureaucratic constraints, described by one businessman as "chronically worrisome".

"China, India and the Philippines are setting up more and more FTZs to increase their foreign direct investment inflows. These zones provide investors with simplified licensing and other bureaucratic procedures," he said.

Separately, Singapore's Trade and Industry Minister Lim Hng Kiang said on the sidelines of the seminar that his country was exploring opportunities for investment in the natural resources, agriculture and aquaculture sectors.

"Indonesia is very rich in resources while there is some manufacturing capability in Singapore that could link up with the resources here," Lim said.

"We are also looking at collaboration with Indonesian small and micro enterprises in agriculture and aquaculture," he added.

According to the Investment Coordinating Board (BKPM), Singapore was the largest investor here last year, with investments amounting to S$6.3 billion (US$3.69 billion) -- about one third of total foreign direct investment inflows in 2005.

Meanwhile, Indonesia was ranked Singapore's fifth largest trading partner with total trade coming to S$54.2 billion.
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