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NEWS UPDATES Asean Affairs   31 October 2013  

Investors need actions,not talks: Economists

Government officials need to walk the talk in improving Indonesia’s investment climate after the latest report by the World Bank and the International Finance Corporation (IFC) indicated little progress in their pledge of streamlining business processes, economists have said.

“Investors are flocking to Indonesia due to the huge investment opportunities, perhaps that’s why the government appears to be lazy [in implementing reforms] because, even when they do nothing, liquidity and foreign direct investments (FDI) will come here anyway,” said A. Prasetyantoko, chief economist of state-run Bank Tabungan Negara (BTN).

The report ranked Indonesia 120th in their annual Ease of Doing Business survey. The report said that, throughout 2012 to 2013, Indonesia had only accomplished one business reform: improving its credit information system.

The ranking of Southeast Asia’s largest economy lagged significantly behind its ASEAN counterparts, compared to Malaysia (8th), Thailand (18th), Brunei Darussalam (59th), Vietnam (99th) and the Philippines (108th).

“Yes, Indonesia is a bigger, more complex country compared to its neighbors, such as Malaysia and Thailand, but we have to admit that our efforts in improving our business climate have not yet been
optimal,” said Prasetyantoko.

The government has frequently expressed its never-ending commitment to improve Indonesia’s investment climate.

Last week, Vice President Boediono unveiled a policy package that included planned presidential and government regulations that would be issued as late as February next year, which would make it easier for investors to establish new businesses, obtain building permits and apply for electricity access, among others.

However, critics fear that the government may only offer empty promises, especially when reflecting on its previous pledges. For instance, the government has stated that it will revise the list of business sectors that are wholly or partially closed to investment, known as the negative investment list (DNI) in an attempt to make industries more investor-friendly.

The new list would be completed by the end of the third quarter this year, then Investment Coordinating Board (BKPM) chairman Chatib Basri — now finance minister — once promised, but it has not been unveiled until now.

For now, Indonesia remains a “heavily attractive” country among foreign investors due to its vast natural resources and the high potential of its manufacturing sector, according to Destry Damayanti, chief economist of state-run Bank Mandiri.

BKPM data showed that FDI jumped 18 percent to top record-high level of Rp 67 trillion (US$5.9 billion) in the third quarter, but she argued that the country still punched well below its weight and could record higher figures.

“We are especially weak in terms of connectivity – the dwelling time in our ports is still lengthy, for example. This shows that there is no significant improvement yet,” said Destry. “Some recent issues related to labor might also be seen as annoying [among foreign investors], so there needs to be a solution for that.” (sat)

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






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