Business Climate Needs Improvement
Friday, 08 September, 2006 | 16:26 WIB

Tempo Interactive, Jakarta: Muhammad Luthfi, Head of Capital Investment Coordinating Board (BKPM), acknowledged the lessening of Indonesia’s business climate rank has not yet able to match other countries’ performance such as Singapore. That country quickly shows progress in investment climate improvement.

“They are definitely faster than Indonesia. Other countries are one step further,” Luthfi told Tempo in Jakarta yesterday (7/9).

Luthfi was asked for a comment regarding the result of the World Bank and International Finance Corporation’s survey. In Doing Business 2009, the World Bank said the business climate in Indonesia last year was better than the previous year. However, compared to other countries, especially in Asia, Indonesia’s rank went up from the 135th place to 131st place in 2005.

That is why, according to Luthfi, the government will keep reforming licenses. He is optimistic that the new investment policies will increase foreign investment.

Boediono, Coordinating Minister for the Economy, said the government will make use of the World Bank’s report as input. The government, he said, has struggled to make the investment climate in Indonesia more attractive. In Bintan-Batam-Karimun Special Economic Zones, for example, the government has formed one-stop service. However, Boediono acknowledged many regulations still need to be perfected.

Based on the Coordinating Agency for Investments (BKPM) data, the realization of the foreign capital investment agreement in the first half of this year went down to US$3.7 billion from US$4.9 billion at the same period of the previous year. On the other hand, realization of domestic capital investment agreement increased to Rp11.46 trillion compared to Rp9.61 trillion at the first half of last year.

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