Among other moves, local laws that increase business costs to be annulled

TOP Indonesian officials yesterday sought to assure foreign investors that the country's regional governments were now "open for business''.

Coordinating Economic Minister Budiono said steps have been taken to establish a sound foundation for a robust economy where the private sector could participate.

"We are now open for business to the world,'' he told participants in the Indonesian Regional Investment Forum organised by the Regional Representatives Council.

He said that regional governments have been told to avoid issuing regulations that would increase the cost of doing business.

They were also advised to simplify local regulations and to apply the principles of good governance in order to attract investors.

The creation of special economic zones such as the ones in Batam, Bintan and Karimun was cited as a model for regional investment in a competitive business climate.

Issues of concern to investors such as tax laws, Customs and excise and labour laws were also being addressed, he added.

The two-day forum, held separately from the three-day infrastructure summit organised by the government, is being attended by 600 people, mostly regional officials and local and foreign investors.

It aims to attract investments to the provinces.

Projects that are being offered by the regional governments range from cattle breeding and oil palm plantations to cement plants, tourism and infrastructure.

Opening the forum on Wednesday, President Susilo Bambang Yudhoyono assured potential investors of their investments.

"It is time to invest in Indonesia because we have a huge market of 220 million people,'' he said.

He also assured investors that the government would not nationalise private companies.

Dr Yudhoyono said that decentralisation was moving in the right direction with local laws that hampered investments being annulled to make the regions more business-friendly.

Under the decentralisation programme, governments in the regions had powers to introduce their own laws on investments and taxes.

But such powers are now being clipped gradually following complaints from investors.

Finance Minister Sri Mulyani told the forum a new law will be enacted to specify the types of local taxes that the regional governments could impose. A package of tax incentives for new investments in the regions will soon be presented to President Yudhoyono for his approval.

Speaking at the same forum, Trade Minister Mari Pangestu said that the government has introduced regulations to enable investors to deal directly with local governments.

"Except for sectors that involve concessions such as forestry and oil and gas, investors can go direct to the regions to get approval. You don't need approval from the central government,'' she said.