President supports plan to create economic center in Morotai

The Jakarta Post, Jakarta | Wed, 08/04/2010 12:32 PM | Business

President Susilo Bambang Yudhoyono expressed his support Monday on the North Maluku provincial administration's plan to make Morotai island a a special economic zone.

Speaking at a ceremony in Ternate on Wednesday for the relocation of the North Maluku province's capital from Ternate on Ternate Island to Sofifi on Halmahera Island, the President demanded that the plan be prepared carefully.

The President even expressed his intension to visit Morotai Island to have a close look directly on the potentials which can be developed there.

As one of the outer islands, which functions as a gate to Indonesia through Pacific Ocean and lies on the major sea lane to Australia and New Zealand, Yudhoyono considered Morotai Island to be part of the economic movement in the Asia-Pacific region.

“If think strategically, let's do something in North Maluku, especially Morotai so as to enable it to be part of the economic movement in Asia-Pacific,” the President said as quoted by the Antara news agency.

Related Article:

President supports plans to move North Maluku capital

Govt to offer two economic zones to investors soon

Antara News, Tuesday, January 12, 2010 01:53 WIB

Jakarta (ANTARA News) - The government has named two special economic zones as economic development hubs it will offer to investors this year, a chief economic minister said.

"In 2010, there have been two zones which are ready to be offered soon," Coordinating Minister for Economic Affairs Hatta Rajasa told the press after a meeting of the Indonesia-Japan Economic Forum 2010 here on Monday.

The two zones are among the six pilot projects developed as part of the government`s program to speed up the development of infrastructure facilities in the country, he said.

The six special economic corridors include Sumatra`s eastern coast, Java`s northern coast, Kalimantan, Sulawesi and Papua, he said.

"We will speed up the development of the two zones which have extraordinary potentials," he said.

The special economic corridors will be developed under a public private partnership (PPP) scheme. To get the program realized, the government will soon finalize licensing rules and revise presidential regulation concerning PPP to give legal certainty to investors, he said.

"The presidential regulation has been revised. Hopefully, the newly-revised presidential regulation will break barriers and give certainty about the PPP projects.

The projects are part of the government`s program in the first 100 days in office," he said. But he stopped short of revealing the two zones. "I will announce them when the time comes," he said.

Tax incentives offered at special economic zones

The Jakarta Post , Jakarta | Tue, 11/24/2009 1:44 PM

The government is offering tax incentives to investors who wish to open business in five special economic zones across the country.

Industry Minister Mochammad Suleman Hidayat said Tuesday the special economic zones in question were located in Riau Islands, eastern part of Sumatra, East Kalimantan, north coast of Java and Papua.

“The incentives are necessary to make people come [to invest]. We have only decided on the designated zones,” Hidayat told kompas.com after a limited Cabinet meeting on the economy.

He added the economic zones were chosen due to relatively adequate infrastructure that is in place there.

RI eyes $6.4b from tourism in 2008

Ridwan Max Sijabat, The Jakarta Post, Jakarta

The government said it hopes to bring in US$ 6.4 billion in foreign exchange from an estimated seven million foreign tourists expected next year.

The government has set these targets for its 2008 visit Indonesia campaign.

"We haven't reached our target yet for the year 2007, but the number of foreign visitors arriving in the first 10 months of this year was up, compared to last year's figures," Thamrin Bhiwana Bachri, director general for marketing at the Culture and Tourism Ministry told The Jakarta Post on Friday.

"Arrivals were increasing at around 14.4 percent from January to October this year, compared to the same period in 2006."

Thamrin said ASEAN countries, especially Malaysia and Singapore, had been the focus for Indonesia's tourism sector over the last 10 to 15 years.

He said these two countries remained Indonesia's major markets.

"Their proximity, the high amount of flights available and the similar customs and food are the main factors that stimulate the interest of people from these countries to visit Indonesia," he said.

But the government needed to develop tourist attractions in regions by improving facilities and access, Thamrin said.

"We have many other interesting places and cultures other than Bali," he said.

"But those places don't have good infrastructure or facilities able to accommodate tourist needs, like convenient hotels and resorts, clean public toilets, well-managed airports or easy access to tourist attractions."

Bali remains a favorite tourist destination, with foreign arrivals up 40 percent this year.

The "Visit Indonesia Year 2008" campaign, which would be launched by President Susilo Bambang Yudhoyono on Jan. 1, is set to stage 100 international-scale events and cultural festivals.

It has been timed to coincide with the "World Culture Forum Asia & Pacific" in New Delhi in January 2008.

Legislator Ade Daud Nasution from Crescent Star Party (PBB) is the owner of several hotels in Bali and Riau Islands and said the government must continue developing the Riau archipelago.

He said this was vital in order to win the tourism competition against Singapore and Malaysia and to attract tourists from China, the Middle East and Japan.

"We have to develop an integrated tourist resort on Bintan, Galang and Batam islands, which are located in a strategic position on the Malacca Straits," he told the Post.

"The government could invite foreign investors to take part in the integrated tourist resort project if it can not do this alone," Ade said.

The government said recently Indonesia's economic growth in the coming years could depend on the tourism sector if the Bintan Bay Treasure integrated resort was realized.

The resort is projected to compete with Singapore and Malaysia.

Ade said Malaysia's Landmarks Bhd. had confirmed its readiness to take part in the project in Bintan and many local businessmen had also shown an interest.

Hasto Kristiyanto from the Indonesian Democratic Party of Struggle (PDI-P) said the government would need to invest a serious sum if it wanted to make the Riau archipelago a viable tourist destination in Southeast Asia.

"Despite having a Muslim majority, Indonesia should not be a hypocrite," Hasto said.

"It should learn more from Malaysia and Singapore and see how they have developed their tourism industries," he said. (rff)

Ship Investment Increases in Special Economic Zones

Friday, 16 November, 2007 | 17:38 WIB

TEMPO Interactive, Batam: Riau Islands Governor, Ismeth Abdullah, said that foreign investment in ships is increasing, especially in special economic zones (SEZs), Batam, Bintan and Karimun.

So far the Riau Islands government recorded that investment was US$1 billion. In Karimun, the preparation for welcoming a Korean investor, who will invest US$500 million, is taking place. The company is a consortium which built the largest dockyard in Southeast Asia, able to absorb 40,000 workers.

Ismeth explained, Karimun will be transformed into a shipyard industry area, as it has an adequate sea depth as well as a competitive land lease.

According to Ismeth, in Bintan there are five ship industry companies investing, 15 in Karimun; Batam is for the industry development.

Batam Authority Chief, Mustofa Wijaya,, said there are 71 companies in the ship industry in his territory. Out of that number, 80 percent are located in Tanjung Uncang, and the remaining in Sekupang. As in Rempang and Galang Islands, it will be decided later as the areas are specific for tourism. “But the shipyard industry is still possible,” he said.

Mustofa acknowledged that the land for the shipyard industry in Batam is no longer available except for development. Out of 255,000 workers in Batam, 75,000 are working in the ship industry and the remaining in the electronics industry in 23 industrial zones.

Rumbadi Dalle

New negative investment list 'treading water'

Urip Hudiono, The Jakarta Post, Jakarta

The government has issued its latest so-called negative investment list, which sets out a more comprehensive description of which business sectors are closed to foreign investors.

The new list, required under the recently enacted Investment Law, governs a total of 338 business sectors, of which Trade Minister Mari Elka Pangestu said 69 sectors would now be more open than before, with 11 becoming more restrictive.

The previous 2000 and 2001 negative investment lists covered 83 sectors.

The list increases the number of closed sectors to 25 from 11 previously so as to protect the national interest in such areas as public health, the environment, culture and natural biodiversity. It also prioritizes 43 sectors for small and medium enterprises (SMEs).

Other sectors will, however, be more open to foreign investors than before. Under the new rules, non-national investors will be allowed to take controlling stakes in banks (up to 99 percent), the power sector, oil and gas industry, tollway operators, water companies, agriculture and plantation firms (95 percent), insurance firms (80 percent), the pharmaceutical industry (75 percent), health services (65 percent) and construction (55 percent).

In the telecommunications sector, foreign investors will be allowed to own up to 65 percent of cellular operators, but only 49 percent of fixed-line phone companies.

Other sectors that will also be opened up to overseas investment include transportation and education, although these are limited to 49 percent. Foreign investors can also join up with local firms in the tourism and recreational sector in designated parts of the country.

Mari said the list would not be applied retroactively.

Coordinating Minister for the Economy Boediono said he expected the new negative investment list to provide more clarity and transparency as it summarized the prevailing rules governing investment in each sector.

He also said that the government would set up a team to regularly review the list.

The list comes into effect three years from the date of its issuance, that is, in 2010, and applies throughout the country, including special economic zones.

The business community cautiously welcomed the new list.

However, Indonesian Chamber of Trade and Industry (Kadin) chairman M.S. Hidayat criticized the use of the unusual formula, "50 percent foreign ownership", in a number of sectors, saying that this was uncommon in normal business practice.

"There's no such thing as a 50:50 business. It's either a majority stake or a minority one. It has to do with decision making," he said.

Hidayat said Kadin would evaluate the list with representatives of the overseas chambers of commerce and others from the business community so as to elicit suggestions and comments about it, including the question of incentives for investments in pioneering sectors.

International Business Chamber chairman Peter G. Fanning questioned how the list would be applied, although he admitted it offered more clarity and transparency, while the restrictions it imposed would be unlikely to have adverse consequences for investment in Indonesia.

"It's not a step back. But it's not a leap forward either," he said.

Both sides of Suramadu bridge set for SEZs

Ary Hermawan, The Jakarta Post, Jakarta

The government plans to set up special economic zones (SEZ) in the areas to be linked by the Surabaya-Madura bridge, with the zones expected to cover some 600 hectares in total.

The SEZs on both sides of the bridge will be established upon the completion of the bridge, which is scheduled for 2008, according to National Development Planning Minister Paskah Suzetta.

"The bridge must be turned into more than just a link between Surabaya and Madura. We must also improve economic conditions in the surrounding areas," Paskah said Wednesday.

Accordingly, Paskah said the government had decided to set up a special agency to speed up the bridge's construction, and to prepare blueprints for the development of the proposed economic zones.

"The agency will focus primarily on land acquisition and the construction of infrastructure, including ports and residential areas to support the zones," he said, adding that the new agency would be headed by Coordinating Minister for the Economy Boediono and include local government officials as members.

Subsequently, Paskah said, the government would invite private firms to submit bids to run the zones as part of a public-private partnership.

"All companies. foreign and domestic, will be invited to invest in and develop the zones," he said.

Better known by its Indonesian acronym as the Suramadu bridge, the new link, which is still under construction, will connect Surabaya on the island of Java and Bangkalan on the island of Madura. It will be the longest bridge in the country at 5.4 kilometers in length.

China has provided US$400 million for the project, while the government has allocated Rp 1.4 trillion (Rp 147.3 million) from the 2007 and 2008 budgets.

Batam, Bintan and Karimun islands in Riau Islands province made up the first SEZ in the country. It has been deemed a success by the government, which now plans to create similar zones in other provinces.

In addition to the proposed SEZs in East Java, the government has said it will establish other ones in North Sumatra, South Sulawesi and Bojonegara in Banten, where a Rp 7 trillion international port is under construction.

The Coordinating Ministry for the Economy is currently preparing a government regulation in lieu of law as a legal basis in the hope that this will save time and accelerate the establishment of more investment-boosting SEZs around the country.

Issues pertaining to the SEZs will also be covered by the proposed new taxation and customs laws.