US Chamber suggests RI reform investment, tax regulations

Jakarta (Antara News) - Indonesia needs to reform its regulations on investment and taxation as well as promote liberalization in the manpower sector to lure foreign investors including those from the US, a US buisnesman said.

"The reform is important because the cost of business transactions in Indonesia has to be more competitive," Thomas Donohue, president and CEO of the US Chamber of Commerce, said at a press conference after a meeting with Indonesian Chamber of Commerce and Industry (Kadin) executives.

Donohue and a number of US businessmen came to Indonesia as part of a tour of Southeast Asian countries before attending an Asia Pacific Economic Cooperation (APEC) forum in Vietnam.

He said legal and court systems in Indonesia had to be strengthened through continuous corruption eradication efforts. He said the improvements were important because investors always needed legal certainty and equal treatment.

Investors needed to know that contracts that had been signed were protected by law and any dispute could be settled in a fair court of law.

He said he hoped the suggestion would not be intepreted as foreign investors` pressure on the country. He said all countries in the current globalized economy where competition was tight needed to pay attention to these matters.

Donohue said he had noticed Indonesia had made progress in its efforts to improve its bargaining position such as in protection of intellectual property rights and corruption eradication.

He said the US Trade Representative had even lowered the country`s status from "priority watch list" to "watch list" in the protection of intellectual property rights.

"We hope the country`s leaders will maintain the momentum. The US business community wishes to see a successful Indonesia and to make the country as well as other Southeast Asian countries important partners," he said.

Kadin chairman MS Hidayat meanwhile said that the meeting was a follow-up to the signing of a memorandum of understanding between the two countries` chambers in May last year on efforts to improve the US business community`s awareness about business prospects in Indonesia.

He said the cooperation with the US chamber was important as the latter had a total of more than three million member companies.

Therefore, he had welcomed the US Chamber`s plan to open a representative office in Indonesia.

He said the two countries` bilateral trade at present had reached a total value of US$15 billion. But this represented an increase of only US$1.3 billion over the past five years.

"The US buisness cmmunity is still hesitant to inrease their investment in Indonesia because they still see many obstacles such as piracy of copy rights and a weak legal system," Hidayat said.

But Hidayat had told them that judicial processes in Indonesia were now more transparent.(*)
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