[Kabar-indonesia] Group asks govt to stop new industry zone licenses

[Joyo at aol.com]

The Jakarta Post 
Monday, July 3, 2006

Group asks govt to stop new industry zone licenses

The Jakarta Post, Jakarta

The Association of Industrial Estates (HKI) has demanded the government stop 
issuing new licenses for the development of industrial estates as most of the 
existing estates have not been fully occupied.

"We expect the government to halt the issuance of new licenses for industrial 
estates, all the more to build new special economic zones," HKI chairman 
Johannes Archiadi told Antara on Sunday.

Currently the government is deliberating a concept to attract foreign 
investors by developing a new special economic zone. Business licenses and stay 
permits for expat workers will be easier to obtain for investors operating in the 
special economic zone. Excise regulations will also be simpler and easier, land 
leases will be longer and cheaper and various tax incentives will be given.

An interdepartmental team, headed by Coordinating Minister for the Economy 
Boediono, is discussing the criteria for the regions to be developed into 
special economic zones.

Coordinating ministry deputy for industry and trade Edy Putra Irwadi said the 
team planned to complete the format of the proposed economic zone by August, 
along with its incentive packages and also the criteria for regions that could 
be developed into special economic zones.

Johannes expressed concern over the new idea, saying that the development of 
special economic zones would severely hurt the existing industrial estates.

Johannes said there are currently 206 industrial zone licenses in existence. 
However, only 60 zones, covering an area of about 27,000 hectares, have been 
put into operation.

He said the government should pay more attention to current existing 
industrial zones rather than developing the special economic zones.

"If the government provides more incentives to companies operating in the 
industrial estates, foreign investors will come and invest their money here," he 
said.

Rahmat Gobel, the chief commissioner of PT Panasonic Gobel Indonesia, said 
companies were still reluctant to build factories on the industrial estates 
because the government did not provide any incentives to do so.

Besides the absence of business incentives, the industrial estate developers 
had to build infrastructure without the government's help, said Johannes.

He said the government had even set higher property taxes for the industrial 
estates compared to areas outside them.

Responding to the objections from the industrial estate developers, Industry 
Minister Fahmi Idris said that in a discussion with other departments and 
institutions, his office had suggested that existing industrial estates be made 
part of the planned special economic zones concept.

He said existing industrial estates had contributed a lot to Indonesia's 
exports and they therefore also deserved to receive similar treatment.

Fahmi said the Jababeka industrial estate Jababeke, for example, contributed 
about US$15 billion to 2005's total exports of $86 billion.

Meanwhile, Batam, which is the model for the special economic zone, only 
contributed $4.6 billion to national exports.

Rachmat, also vice chairman of the Indonesian Chamber of Commerce and 
Industry, said the new concept was a good way to attract new investors, but added the 
government should also pay attention to investors already operating on 
existing industrial estates. 

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Joyo Indonesia News Service
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