Govt urged to speed up EPA with Japan
Jakarta Post
Govt urged to speed up EPA with Japan
Anissa S. Febrina, The Jakarta Post, Jakarta
8 March 2006
With other Southeast Asian countries already finalizing free trade agreements with Japan, the Indonesian government now needed to accelerate the wrapping up of its planned economic partnership agreement with that country, a business forum has urged.
"We are already late and need to concentrate on accelerating the process," National Economic Recovery Committee chairman Sofjan Wanandi said on the sidelines of Monday’s business forum on Japanese-Indonesian economic links.
Sofjan added that the finalizing of the agreement was a specific precondition set by Japanese businesses for increasing their investments in Indonesia.
"Indonesia needs to immediately deal with its internal problems regarding the investment legislation and regulations to be able to benefit from the agreement and attract more investment," he stressed.
Japan is currently Indonesia’s second largest trading partner, accounting for 14.5 percent of Indonesia’s exports and 17.11 percent of its imports in 2005.
It is also the largest foreign investor in the manufacturing sector, with a cumulative investment of $38.2 billion from 587 companies as of September 2005.
Indonesian Chamber of Commerce and Industry (Kadin) representative Kusumo A. Martoredjo revealed that in the latest survey on Japan businesses’ investment destinations, Indonesia only ranked eighth, lagging behind China, India and Thailand.
"Indonesia used to ranked second before the crisis. We have been recovering very slowly," he said.
Meanwhile, a member of Kadin’s Japanese counterpart, Nippon Keidanren, Yuji Kiyokawa, explained that Japanese investment would go to places that were competitive.
"The EPA would provide more certainty for Japanese businesses and increase Indonesia’s competitiveness," Kiyokawa said, pointing to how Japan’s agreement with Thailand had improved the investment climate for Japanese firms there.
Japan has been pushing for a December deadline for the finalization of the EPA, while Indonesia insists on taking things more slowly.
"We won’t set any deadlines as there were internal issues, like the investment legislation, that have to be tackled first," said Indonesia’s chief negotiator, Soemadi DM Brotodiningrat.
Aside from pushing for the quick wrapping up of the agreement, business associations in both countries have also urged the governments to focus on the energy sector, particularly on Indonesian exports of natural gas and Japanese assistance for the development of alternative energy sources here.
