GOVT PLANS NEW LEGISLATION FOR SPECIAL ECONOMIC ZONE
National News - November 19, 2006
Urip Hudiono, The Jakarta Post, Hanoi
The government will issue a new regulation providing the legal basis needed for the special economic zone (SEZ) in Batam it is jointly developing with Singapore, ironing out as well several pending problems in business license administration, immigration procedures and labor skills.
The Office of the Coordinating Minister for the Economy is currently preparing the government regulation in lieu of law for SEZs, which is expected to come into effect "as soon as possible", said State Secretary Yusril Ihza Mahendra after a meeting Saturday between President Susilo Bambang Yudhoyono and Singapore prime minister Lee Hsien Loong on the sidelines of the APEC Summit here in Hanoi.
The government has decided not to embed the policies of SEZs in its revision of the country's Investment Law, which the House of Representatives is currently deliberating, as "there were too many SEZ-specific issues to be implemented (under one legislation)," Yusril said.
It may also be a faster and more effective way for the government to set up more investment-boosting SEZs throughout Indonesia.
"We'll talk with the House so that the new government regulation will not face too many challenges when the House deliberates on it," he said, without elaborating on the contents of the new regulation.
The government may initiate the issuance and imposing of a government regulation in lieu of law, with the House having to deliberate and approve or reject it within six months.
Investors have indeed been calling for the government to issue specific laws on SEZs, to provide the certainty of a legal basis for their investments. The government may issue one regulation for each SEZ.
The government will soon revise a 2000 government regulation providing incentives of reduced income tax for investments into 15 industry sectors and nine other region-based investment sectors.
Batam island, along with Riau Islands province's Bintan and Karimun, have since June been declared an SEZ, due to their strategic location near Singapore, with industries there now in need of space to expand. Potential investments in the Batam, Bintan and Karimun SEZ include the shipyard and electronics industries. The government plans to set up 14 SEZs throughout Indonesia.
Meanwhile, Coordinating Minister for the Economy Boediono said Friday's meeting was a follow-up briefing of a recent third round of talks of a joint steering committee established between Indonesia and Singapore for the SEZs.
The government will continue to improve the processing time for business licenses in Batam through the newly established one-stop investment center, Boediono said, and the setting up of an investor relation unit to handle any requirements and complaints from investors.
Immigration procedures for businesspeople from Indonesia and Singapore who frequent the SEZs will also be simplified and improved, using a so-called electronic card identity system for faster processing.
"We will also work together with Singapore in training related administrative officers, as well as skilled labor the industries will need at Batam Polytechnic," he said.
The Batam SEZ has since its establishment in June seen 37 investment projects worth US$90 million, providing up to 10,750 jobs, Investment Coordinating Board head M. Lutfi said.
The government is expecting to make Batam Indonesia's main export center, doubling its export value to US$3 billion, or making up 10 percent of Indonesia's total exports, in the next three years, Lutfi added.
Urip Hudiono, The Jakarta Post, Hanoi
The government will issue a new regulation providing the legal basis needed for the special economic zone (SEZ) in Batam it is jointly developing with Singapore, ironing out as well several pending problems in business license administration, immigration procedures and labor skills.
The Office of the Coordinating Minister for the Economy is currently preparing the government regulation in lieu of law for SEZs, which is expected to come into effect "as soon as possible", said State Secretary Yusril Ihza Mahendra after a meeting Saturday between President Susilo Bambang Yudhoyono and Singapore prime minister Lee Hsien Loong on the sidelines of the APEC Summit here in Hanoi.
The government has decided not to embed the policies of SEZs in its revision of the country's Investment Law, which the House of Representatives is currently deliberating, as "there were too many SEZ-specific issues to be implemented (under one legislation)," Yusril said.
It may also be a faster and more effective way for the government to set up more investment-boosting SEZs throughout Indonesia.
"We'll talk with the House so that the new government regulation will not face too many challenges when the House deliberates on it," he said, without elaborating on the contents of the new regulation.
The government may initiate the issuance and imposing of a government regulation in lieu of law, with the House having to deliberate and approve or reject it within six months.
Investors have indeed been calling for the government to issue specific laws on SEZs, to provide the certainty of a legal basis for their investments. The government may issue one regulation for each SEZ.
The government will soon revise a 2000 government regulation providing incentives of reduced income tax for investments into 15 industry sectors and nine other region-based investment sectors.
Batam island, along with Riau Islands province's Bintan and Karimun, have since June been declared an SEZ, due to their strategic location near Singapore, with industries there now in need of space to expand. Potential investments in the Batam, Bintan and Karimun SEZ include the shipyard and electronics industries. The government plans to set up 14 SEZs throughout Indonesia.
Meanwhile, Coordinating Minister for the Economy Boediono said Friday's meeting was a follow-up briefing of a recent third round of talks of a joint steering committee established between Indonesia and Singapore for the SEZs.
The government will continue to improve the processing time for business licenses in Batam through the newly established one-stop investment center, Boediono said, and the setting up of an investor relation unit to handle any requirements and complaints from investors.
Immigration procedures for businesspeople from Indonesia and Singapore who frequent the SEZs will also be simplified and improved, using a so-called electronic card identity system for faster processing.
"We will also work together with Singapore in training related administrative officers, as well as skilled labor the industries will need at Batam Polytechnic," he said.
The Batam SEZ has since its establishment in June seen 37 investment projects worth US$90 million, providing up to 10,750 jobs, Investment Coordinating Board head M. Lutfi said.
The government is expecting to make Batam Indonesia's main export center, doubling its export value to US$3 billion, or making up 10 percent of Indonesia's total exports, in the next three years, Lutfi added.
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