Jakarta – Corporate governance reform is crucial to the Indonesian government's effort to attract more investors to the country, the World Bank said Tuesday.

"Corporate governance reform is key in attracting more investors to Indonesia," the World Bank said in a statement citing the conclusions of a workshop organized by the bank here Tuesday.

The workshop, co-organized by the National Committee for Corporate Governance (NCCG), said poor corporate governance in East Asia, including in Indonesia, had contributed to the Asian financial crisis that swept the region from 1997.

It said the main elements of corporate governance, including transparency, accountability, fairness and responsibility, had been missing in the way many businesses operated in the country. Related party transactions, especially in bank lending, had also contributed to the collapse of Indonesia's banking system.

"The state must rise to the same challenges as the private sector in appointing competent commissioners and board members to state-owned enterprises," said the World Bank's country director for Indonesia, Mark Baird. Baird also said in his address to the workshop that setting high standards was also a "key requirement" for accountants, auditors and lawyers.

Indonesian Coordinating Minister for Economic Affairs, Dorodjatun Kuntjoro-Jakti said that Indonesia has special problems of its own in corporate governance. "It seems to be in a continual 'catch up' mode," Kuntjoro-Jakti said.

The government, he added, was facing a lot of limitations in promoting corporate governance and the private sector should lead the initiative. "The government can play its part in consolidating financial sector oversight and addressing weaknesses in the tax collection system," the World Bank statement quoted him as saying,

NCCG chairman I Nyoman Tjager in his speech stressed the importance of competitiveness in efforts to draw investment into Indonesia. "Indonesia is competing globally for scarce capital investment. investors are concerned about transparency and disclosure in the use of funds," Tjager said.