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Jakarta Post

MIKTA expected to help regional business, investment in RI

  • Grace D. Amianti

    The Jakarta Post

Seoul, South Korea   /   Sat, July 4, 2015   /  11:58 am

To boost investment in regional areas across the country, the government needs to encourage local administrators to forge partnerships with provincial administrators from overseas, a chief legislator says.

Irman Gusman, speaker of the Regional Representatives Council (DPD), said foreign investment should be driven out of the capital city to help speed up development in the regions. In a bid to promote the cross-border provincial partnerships, Irman called on members of the consultative forum MIKTA to start introducing such cooperation into their own governments.

'€œIn my speech, I told the forum that economic partnerships should be aimed at increasing cooperation between the provinces and regions of each member country,'€ Irman said on the sidelines of a consultative meeting attended by representatives from Mexico, Indonesia, Korea, Turkey and Australia (MIKTA) in Seoul.

According to Irman, the DPD decided to raise the cross-border provincial partnership idea at the meeting in the hope it could help boost development in the regions. According to him, Indonesia'€™s economic development has yet to explore the potential of each region, even though the country stands as Southeast Asia'€™s biggest economy.

Irman said it was essential to increase investments outside Jakarta and Java as Indonesia aims for 7 percent economic growth during the tenure of President Joko '€œJokowi'€ Widodo'€™s administration.

The task will be difficult as Indonesia has been relying on consumption, while local investments across the country remain small, he added.

'€œWe have to start shaping our economy into an investment-driven one; the government should offer incentive policies that push investments to outside of Java. Regional investment also includes large-scale companies that have operations mainly in the regions,'€ Irman said.

Based on MIKTA'€™s informal response, Irman said he was convinced that it might help the speedy development of connections and consultation between regional entrepreneurs of Indonesia and other member countries. MIKTA is scheduled to hold a consultative meeting for business owners in October.

Indonesia'€™s economic growth fell to 4.7 percent in the first quarter of this year, from 5.2 percent in the same period last year, with more than 55 percent of that growth contributed by consumption. The Investment Coordinating Board (BKPM) aims to attract at least Rp 3.5 quadrillion (US$262 billion) of realized investments in the next five years, with Rp 519.5 trillion expected this year alone.

As of June, the country has attracted almost $150 billion of potential foreign and domestic investments, according to BKPM'€™s data.

Aside from helping business players, the MIKTA forum would help regional and national lawmakers to create a better investment and trade climate through improvements on existing laws and new bills, said Indonesian Ambassador to South Korea John A. Prasetio.

He added that '€œa lot of rules in Indonesia have good intentions to protect the local market, but they should be made able to keep up with progress on a global level.'€

The MIKTA forum, with its members involved in G-20, promotes itself as a group of middle-power countries with common characteristics, such as implementing democracy and a free-market economy. Its five members have a combined gross domestic product (GDP) of $6 trillion and a total population of 540 million people.

The meeting in Seoul, which was attended by delegates and speakers from the governments of the five member countries, stressed the contribution of lawmakers in rule-making in relation to the Sustainable Development Goals (SDGs), which build upon the post-Millenium Development Goals (MDGs).

The UN'€™s 2000-2015 MDGs will be replaced by the SDGs, which comprises 17 new goals covering a wide range of global issues on development with long-term sustainability at its core. As one of the UN'€™s member nations, Indonesia is expected to adopt the global agenda as soon as it is agreed upon at the UN General Assembly meeting in September.

'€œAs regional lawmakers, we want to point out that the focus of Indonesia'€™s developments should be based on the SDGs. The MIKTA forum can help us to accelerate our approach to achieving the goals,'€ Irman said.