Vincent Fabian Thomas, Jakarta – Indonesia will need to ease a number of import regulations if it wants to attract more investment, Korean firms have said, challenging the government to address the issue.
The import regulations in question include local content requirement (TKDN), import permits and the national commodity balance (SINAS NK), a policy deemed to have disrupted supplies of imported raw materials, thereby hampering manufacturing and export activities of local firms.
"While these regulations are designed to protect domestic industries, they also create difficulties for foreign companies, including Korean ones," Korean Chamber of Commerce and Industry (Kocham) Indonesia chairman Lee Kang Hyun told The Jakarta Post in an interview on Monday.
Lee went on to say that while the government had taken steps to address those challenges, some issues persisted and more needed to be done to make it easier for foreign investors to navigate the regulatory landscape.
Indonesia's high capital requirements also posed a barrier to entry for Korean firms looking to set up shop in the country, Lee said, expressing his hope that the government could make a way for small and medium Korean companies with advanced technology to explore opportunities with Indonesian partners.
Lee stressed that more Korean investment could come to Indonesia through a government-to-government (G2G) approach focused on each country's strengths in particular industries and technology.
Separately, the Association of Korean Chambers in ASEAN, during a discussion held on Monday, proposed that ASEAN member countries consider removing nontariff barriers, including "unfair" customs procedures and export or import quotas, and ensure transparency in tariff policies.
Countries of the region concluded the world's largest free-trade agreement last year, the Regional Comprehensive Economic Partnership (RCEP), which involves 15 countries and represents around 30 percent of global GDP. The RCEP includes the ten ASEAN member countries along with South Korea, Japan, China, Australia and New Zealand.
Korean Ambassador to ASEAN Kwon Hee-seog said on Monday that the RCEP could foster ASEAN-Korea economic cooperation as a stepping stone to realizing the Korea-ASEAN Solidarity Initiative, which envisions shared prosperity and development between the two.