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RI trade policy tends to scare off investors: Envoy
US Ambassador to Indonesia Robert Blake has said that amid the countryâs intensive campaign to attract more investment, its trade policy tends to scare off investors
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S Ambassador to Indonesia Robert Blake has said that amid the country's intensive campaign to attract more investment, its trade policy tends to scare off investors.
He cited as an example the regulation on the use of local content, such as that applied in the smartphone industry.
'Experience around the world has shown that local content and other import restrictions tend to scare off investors. [...] Global supply chains in the production of goods are different today than in the past,' he said in a speech at Al Azhar University in South Jakarta on Tuesday.
The Communications and Information Ministry has revealed a plan to launch a regulation in June that will require a certain level of local content in the production of 4G smartphones in the domestic market by 2017, requiring global cell phone makers to form partnerships with local assemblers and manufacturers.
South Korean cell phone giant Samsung has started producing cell phones at its factory in Cikarang, West Java.
However, Blake questioned the effectiveness of the regulation.
'While investors may want to manufacture in Indonesia, it might not make business sense for them to make each and every component and each and every product here,' he said.
He said US technology company Apple assembled its phones in China while the parts and components were supplied by companies all over the world as Apple found it the most efficient and cost-effective way to source components.
However, he applauded the government's efforts to improve the investment climate, such as with the One-Stop Service System, but insisted that investors would want free trade in import and export. (fsu)(++++)
