Rendi Akhmad Witular, Jakarta – President Susilo Bambang Yudhoyono accepted on Tuesday a proposal from a powerful business lobby to help accelerate private investment in food crops and the energy and mineral sectors in hope of alleviating shortages of the commodities in local markets.
Chairman of the Indonesian Chamber of Commerce and Industry (Kadin), Mohamad S. Hidayat, said the government had agreed to set up a committee for speeding up bureaucracy and eliminating overlapping regulations for businesses.
"The government must partner with the local private sector to help secure the supply of strategic commodities amid global turmoil. But we find it difficult to invest in the commodities because of spiraling red tapes and twisting regulations," he said.
Tasked primarily with providing short-cuts for doing business and setting up intensive communication with investors, the committee will be chaired by Yudhoyono with members including ministers and provincial governors.
"Such a mechanism will enable us to bypass all of the obstacles with the help of the committee. This will eventually lure in foreign investors to engage in strategic sectors, and provide leeway for local banks to channel loans," said Hidayat.
Hidayat and a group of noted businessmen – James Riyadi of Lippo Group, Franciscus Welirang of Indofood, Ari S. Hudaya of Bumi Resources, Sudhamek of Tudung Group, and John A. Prasetio of CBA Asia – met with Yudhoyono to push for the proposal.
Yudhoyono has given 10 working days for Kadin and the businesspeople to set up a kind of action plan for the committee to help address all of the problems and speed up investments.
Like other economic giants, Indonesia, Southeast Asia's largest economy, has fallen victim to skyrocketing global commodity prices, which has caused inflation accelerating to its fastest pace in 18 months.
The high inflation environment has deterred the central bank from further cutting its benchmark interest rate, which is needed for local companies to expand or for investors to start up new companies at low borrowing costs from banks.
Agriculture Minister Anton Apriyantono told The Jakarta Post the ministry would prioritize private investment in rice, corn, sugar, soybean, cattle and poultry.
"Most of the commodities are managed by small and medium farmers. But with incoming private investments from big companies we expect output of the commodities will soar," said Anton.
The ministry, he added, would help investors in seeking land for plantations, speeding up operating licenses, helping with technical knowledge and the mapping of potential areas for planting the commodities.
Energy and Mineral Resources Minister Purnomo Yusgiantoro told the Post some 20 production sharing contracts for oil and gas companies had requested the government to help them with various problems in their operations and investments.
"With the planned committee, we will help them provide fiscal privileges and address problems with local administrations over the overlapping of regulations and operating concessions.
"They have also demanded the government to provide them with fast track facility to help them speed up bidding process and in dealing with bureaucracy," said Purnomo.