Indonesia, OECD agree on 'enhanced economic engagement'

Desy Nurhayati ,  The Jakarta Post ,  Jakarta   |  Sat, 07/26/2008 11:25 AM  |  Business

President Susilo Bambang Yudhoyono agreed Friday to increase cooperation with the Organization of Economic Development (OECD) during a meeting at the presidential office.

Yudhoyono said after meeting with OECD Secretary General Jose Angel Gurria that the cooperation with the group would boost Indonesia's efforts to increase investments in the country.

"I positively accept the OECD's proposal to build a closer partnership through the enhanced engagement. This means there is a greater opportunity for us to work together," Yudhoyono told reporters.

"If we can actively take part in the committees they offer, I am sure the cooperation will benefit us," he said.

Indonesia, along with four other non-member countries -- Brazil, China, India and South Africa, were invited by the OECD to embrace what the body referred to as an "enhanced engagement".

The initiative aims at increasing ties between the non-member counties and the OECD in the hope that they will eventually join as members.

The OECD is a multilateral forum comprised of 30 countries committed to a free market economy and the principles of representative democracy.

The OECD on Thursday published its first comprehensive economic assessment of Indonesia. According to the report, Indonesia's rules on foreign direct investment are more restrictive than those of most other OECD countries, making its ratio of financial direct investment to GDP among the lowest in Southeast Asia.

The OECD suggested Indonesia raise its ownership ceilings for foreign investment and liberalize state-owned monopolies to relieve infrastructure bottlenecks.

In response to the report, Yudhoyono said Indonesia had shown significant improvements, especially on economic growth, investment and cooperation.

"I acknowledge that despite the improvements, we still have much to do, including reducing poverty and unemployment, and creating a better investment climate. These are issues commonly faced by other developing countries as well."

Gurria said he and the President discussed the report's conclusion and recommendations, including on how Indonesia and the OECD could build a stronger, closer and more structured relationship.

"We talked about creating a more predictable and more structured relationship... with the view of a possible membership," the President said.

"So the option of membership is there, but it's Indonesia's choice, no pressure, no deadline and, in the meantime, we want to concentrate on this closer relationship."

He said he expected the cooperation would benefit Indonesia and the OECD.

He said two ways to measure Indonesia's development were by assessing the country's performance each year and by comparing it to other countries.

"If you only measure against yourself you will be very happy because you are better than last year. But what you don't know is that everybody else is moving so fast, and you discover that you might not be moving fast enough.

"So what we can provide is this comparison to the rest of the world... because (Indonesia) can do better in education, health, foreign investment, social security."

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