Dur­ing a busi­ness meet­ing and agree­ment sign­ing cer­e­mony on Fri­day, US Vice Pres­i­dent Mike Pence said that al­though the US was en­thu­si­as­tic about in­vest­ing in South­east Asia’s largest econ­omy, many ob­sta­cles re­mained that held US com­pa­nies back from truly pour­ing their money into the coun­try.

“US com­pa­nies face many bar­ri­ers and dif­fi­cul­ties in the In­done­sian mar­ket, in­clud­ing in­tel­lec­tual prop­erty, the lack of trans­parency, re­quire­ments in man­u­fac­tur­ing to in­clude lo­cal con­tent to be able to sell prod­ucts in the In­done­sian mar­ket,” he said mat­ter-of-factly.

While the US ac­knowl­edges Pres­i­dent Joko “Jokowi” Wi­dodo’s ef­forts to re­form the busi­ness and in­vest­ment en­vi­ron­ment in In­done­sia, it in­sists that “there must be more to be done.”

“The truth is a stronger Amer­i­can econ­omy is a stronger econ­omy for In­done­sia and all trad­ing part­ners. The US is a driver for global growth, un­der Pres­i­dent Don­ald Trump, we will be driv­ing global growth like never be­fore,” he said.

Busi­nesses are no stranger to the is­sues high­lighted by Pence due to In­done­sian gov­ern­ment en­force­ment of in­creased use of lo­cal con­tent in the oil and gas sec­tor and telecom­mu­ni­ca­tions in­dus­try.

The US pre­vi­ously filed a com­plaint at the World Trade or­ga­ni­za­tion (WTO), chal­leng­ing In­done­sia’s poli­cies on the im­ports of hor­ti­cul­ture and an­i­mals. The WTO sided with the US and fel­low pe­ti­tioner New Zealand.

Since tak­ing of­fice in late 2014, Jokowi has made dereg­u­la­tion part of his ad­min­is­tra­tion’s fo­cus. It has is­sued more than a dozen eco­nomic pol­icy pack­ages to im­prove the busi­ness cli­mate and in­vest­ment.

The pack­ages helped In­done­sia climb 15 places to 91st place in the World Bank’s Do­ing Busi­ness 2017 re­port from 106th place a year prior.

How­ever, de­spite the im­prove­ment, In­vest­ment Co­or­di­nat­ing Board (BKPM) chair­man Thomas Lem­bong agreed that In­done­sia still had much to do to raise its com­pet­i­tive­ness in the global mar­ket and to at­tract in­vest­ments from across the globe, not just from US com­pa­nies.

He said over­reg­u­la­tion was bad even for lo­cal in­dus­tries as they needed to im­port ma­te­ri­als to en­able them to pro­duce goods that com­ply with in­ter­na­tional stan­dards.

The BKPM will con­tinue work­ing to im­prove the econ­omy and to cut red tape and is cer­tain there will be more ini­tia­tives to sim­plify reg­u­la­tions and re­duce trade bar­ri­ers in the next few weeks.

While the US has tra­di­tion­ally in­vested in the min­ing and up­stream oil and gas sec­tors, Thomas said the Amer­i­can Cham­ber of Com­merce (AmCham) in In­done­sia had in­di­cated that it would in­crease in­vest­ments in the man­u­fac­tur­ing, tech­nol­ogy and dig­i­tal sec­tors.

Par­tic­u­lar at­ten­tion in the dig­i­tal sec­tor must be paid to­ward global data cen­ters that use cloud com­put­ing, due to vague ex­ist­ing reg­u­la­tions, Thomas added.

On Fri­day, the US and In­done­sia signed US$10 bil­lion worth of agree­ments in trade and in­vest­ment in the en­ergy and de­fense sec­tor.

The agree­ments in­cluded a $6 bil­lion deal be­tween US-based ExxonMo­bil and state-owned oil and gas gi­ant Per­tam­ina to pro­vide liq­ue­fied nat­u­ral gas (LNG) for the lat­ter for 20 years, start­ing in 2025.

State-owned elec­tric­ity firm PLN and US-based Pa­cific In­fra Cap­i­tal LLC signed a $2 bil­lion deal as well to im­ple­ment an ad­vanced me­ter­ing in­fra­struc­ture sys­tem in In­done­sia.

The US and In­done­sia also saw tech­nol­ogy and man­u­fac­tur­ing firm Honey­well and state-owned air­craft man­u­fac­turer PT Dir­gan­tara In­done­sia (DI) se­cure a con­tract, in which the for­mer will sup­ply 34 TPE331 tur­bo­prop en­gines to DI over the next four years.

The value of Fri­day’s agree­ments was lower com­pared to those made dur­ing for­mer US pres­i­dent Barack Obama’s visit in 2011.

Back then, In­done­sia’s big­gest low-cost car­rier PT Lion Men­tari Air­lines (Lion Air) made a $21.7 bil­lion deal with US air­craft man­u­fac­turer Boe­ing for the pur­chase of 230 air­craft. This was Boe­ing’s largest com­mer­cial or­der at the time.

Ac­cord­ing to data from the BKPM, the US in­vested $1.16 bil­lion in 540 projects in In­done­sia last year, an in­crease from $893.16 mil­lion and 261 projects in 2015.

In terms of trade, the In­done­sia-US trade value stood at $23.4 bil­lion in 2016, stay­ing flat com­pared to 2015.

Pence’s visit to In­done­sia is highly sig­nif­i­cant as it was con­ducted not long af­ter the Trump ad­min­is­tra­tion was es­tab­lished ear­lier this year and In­done­sia was one of the first coun­tries on Pence’s Asia-Pa­cific tour.

In­done­sian Em­ploy­ers As­so­ci­a­tion (Apindo) deputy chair­per­son Shinta Wid­jaja Kam­dani said the US was no longer in­ter­ested in mul­ti­lat­eral agree­ments and any trade deals must be done bi­lat­er­ally.

“We al­ready have a strate­gic part­ner­ship and now we have to de­velop that to specif­i­cally un­der­stand what both coun­tries want from each other. We have to do it soon be­cause [other coun­tries] will also be com­pet­ing [for in­vest­ment],” she said.

In­done­sia is now await­ing a fol­low-up to the US’ gen­er­al­ized sys­tem of pref­er­ence, which is ex­pected to de­crease du­ties for In­done­sian man­u­fac­tured goods ex­ported to the US.

While Pence made only a brief men­tion of miner PT Freeport In­done­sia, a sub­sidiary of US-based Freeport-McMoRan Inc., Co­or­di­nat­ing Mar­itime Af­fairs Min­is­ter Luhut Pand­jai­tan con­firmed on Thurs­day that the is­sue was briefly dis­cussed be­tween Pence and Jokowi.

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