Speaking in a speech at the end of the three-day meeting of the government’s working group on the economy, the President said that both central government and local administrations should be able to help promote and increase the participation of domestic investors.

“Give more space to local investors. Domestic investment are safer than foreign investments, which are more vulnerable to global economic turbulence,” Yudhoyono said.

The President added Indonesia would need at least Rp 10,000 trillion (US$1.11 trillion) in new investments in the next five years to provide adequate infrastructure.

Yudhoyono insisted that the government including regional and provincial  administrations must simplify the regulations needed to boost  investment. “Remove all the regulations that are hampering investment activities!,” Yudhoyono said.

The three-day meeting was attended by Cabinet ministers, governors,  regional legislative council (DPRD) chairmen, heads of state-owned  companies (BUMN), the sector and academics.

During the meeting President Yudhoyono and his Cabinet members discussed 10 important strategic priorities in socio-economic sectors including poverty alleviation programs, creating new job opportunities and increasing the nation’s economic growth to at least 7.7  percent annually by 2014.

The President said Indonesia should reduce dependency on international financial  assistance.  

“Our first task is to decrease our foreign debt and to increase revenue by boosting income from taxes,”
he said.

The President  also said he was very concerned at reports of many corruption cases involving tax office staff. “It’s time to totally reform our taxation system,” Yudhoyono said.

Finance Minister Sri Mulyani Indrawati said on Tuesday that the  government would establish the National Committee for Innovation involving universities, research and development agencies,  technology  experts, businessmen and the civil service to work together in achieving the nation’s economic targets.

The meeting of the government’s national working group on the economy ended with a number of recommendations for the increased mobilization of  local financial resources to finance the country’s development programs.

Coordinating Economic Minister Hatta Rajasa said that the empowerment of domestic financial sources both public and private was needed to support efforts towards achieving an economic growth target of 7.7 percent by 2014.

The mobilization of tax revenue is expected to play a greater role in the mobilization of financial
resources for development. By 2014 the contribution from tax is expected to reach 14.2 percent of the gross domestic product (GDP), Hatta said when explaining the recommendations made during the meeting.

This year’s tax ratio is set at 11.7 percent of the proposed 2010 state budget revision, lower than the initial estimate of 12.4 percent. “Targets in 2014 are that the debt-to-GDP ratio declines to 24 percent and the tax ratio increases to 14.2 percent of the GDP,” he was quoted by Antara as saying.

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