Mar 20 20:42 BI hopes regulations to encourage investment ready in third quarter 2006
"We have to strive for the completion of legal and institutional facilities this year. I hope it can be completed in the first semester or the third quarter of 2006 at the latest," Burhanuddin said. Jakarta (Antara News
) - Bank Indonesia (BI), the central bank, is hoping the government will complete various regulations meant to encourage investment to attain high economic growth by the end of the third quarter of 2006 at the latest, the bank`s governor Burhanuddin Abdullah said.
Speaking at a seminar here Monday, he said the expected regulations should be on investment, manpower and taxation.
"We have to strive for the completion of legal and institutional facilities this year. I hope it can be completed in the first semester or the third quarter of 2006 at the latest," Burhanuddin said.
Burhanuddin opined that the existing law on manpower in Indonesia was less flexible than similar laws in other Asian countries such as Malaysia and China.
Another issue that would hamper absorption of the work force was increasing labor wages and high risk of layoffs in Indonesia.
In the taxation field, there the problems of the slow tax restitution and only 87 percent of tax restitution value that could be claimed.
Burhanuddin warned that a country`s competitive advantage did lie in the geographical aspect such as location and natural wealth but more in state management, if the country wants to improve investment in the context of globalization.
"If we see neighboring countries which are managed rationally, clean and predictable, that`s a good state management and that will show our competitiveness," he added.
On the occassion, Burhanuddin emphasized the importance of efficiency in bureaucracy to get documents on investment.
"The main problem to encourage investment is the high cost sparked by illegal levies," he said.
According to a survey of the World Bank, investors needed 151 days to arrange for documents in Indonesia while in Malaysia they can get the documents within 30 days.
The BI chief also warned about the risks of a fast capital inflow in short term into the country.
He said, the government should anticipate possible capital outflow that might occur at any time.
"Too much good things has entered this country. That raises a suspicion whether a capital outflow will happen any time," Burhanuddin said.(*)