Regional govts must improve regulations, say investors

The Jakarta Post, Jakarta

Given their new autonomy, local administrations should now start promoting their areas as good places to do business instead of scaring off investors with a myriad of inconsistent regulations.

"If you want to attract foreign investors to do business in your regencies, you have to give them honey. Don't give them bitter pills to swallow," Indonesian-French Chamber of Commerce and Industry (IFCCI) chairman Alain-Pierre Mignon said on the sidelines of a one-day conference on local investment promotion and management held by Regional Autonomy Watch (KPPOD) at the Nikko Hotel in Jakarta on Thursday.

The conference, which was organized in collaboration with the European Commission, was also attended by Indonesian-British Chamber of Commerce (Britcham) chairman John B. Arnold, Indonesian-Netherlands Association deputy chairman Theodor Bakker and Indonesian-German Chamber of Commerce chairman Jan Ronfeld.

Allain said that despite the efforts by the central government to relax the regulations pertaining to foreign investment and trade, most foreign investors still faced difficulties when investing at the local level.

"The facts are different on the ground," he said.

According to data released by Regional Autonomy Watch, of more than 1,600 local government regulations that it had analyzed, 31 percent were inimical to investment and therefore needed to be revoked.

Indonesian Business Association chairman Sofjan Wanandi put the number even higher. He said that there were more than 1,000 local regulations that were off-putting to investors. "Most of them are issued by local administrations in remote areas," he added.

He said that currently between 12,000 and 15,000 regulations had been issued by local administrations. Some were reported to the central government, while others were not.

Meanwhile, Britcham chairman John B. Arnold said many foreign investors were still wondering where the power to approve local regulations lay -- at the local level or at the central level?

"Sometimes it's local, sometimes it's central. Nobody seems to know," he said.

To overcome the problem, Regional Autonomy Watch was trying to bridge the gap between foreign investors and local administrations.

In furtherance of this, the representatives of the four chambers of commerce signed a memorandum of understanding (MoU) with Makassar mayor Ilham Siradjudin and Medan mayor Abdillah immediately after the conference.

The memorandums stated that the mayors agreed to forge collaboration to improve the investment climate by formulating policies that would attract international investors to their cities.

"Bandung will be the next city to sign a memorandum," said Sofjan, who is the founder of Regional Autonomy Watch.(01)
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