 The Government has regularly expressed a commitment to developing and implementing a regulatory and legal framework that will positively impact on Indonesia's ability to attract capital investment from both domestic and foreign sources. To this end there have been legislative developments with the enactment of a new Capital Investment Law, revisions to the Negative Investment List, an Interim Law on Free Trade and Port Zones, and now the Government is working on the Bill on Special Economic Zones.
The Bill on Special Economic Zones is part of the 2008 National Legislation Program (Program Legislasi Nasional / Prolegnas) and it is hoped that this bill will pass the House of Representatives (Dewan Perwakilan Rakyat / DPR) some time this year. To this end the Minister of Law and Human Rights has already met with the Legislative Agency of the DPR (Badan Legislasi DPR / Baleg DPR) and they have reached an 'in principal' agreement to try and complete passage of the bill this year through the DPR. The basic premise of the bill is to attract investment. The Government believes that one of the best ways to attract investment is to provide areas that can be developed as 'special zones' that provide a high return on initial investment. To ensure that returns on investment are attractive and thereby ensuring that investments are made, the Government will offer special incentives and facilities to investors willing to part with some of their hard- earned money in a special economic zone. Primarily these incentives and facilities will be in areas such as tax, customs, and employment. But it is expected that incentives and facilities in these areas will provide an investment environment that will permit rapid improvements and increases in industry, tourism, and trade. These improvements and increases will then form the basis of rapid economic growth and employment opportunities for the special economic zones.[ from many sources ] | Senin, 27 Oktober 2008 |  Market Confidence
The government has issued a new Government Regulation in Lieu of Law on the Financial System Safety Net (Jaring Pengaman Sistem Keuangan / JPSK). A Government Regulation in Lieu of Law (Perpu) is in essence an interim law that remains valid until the next sitting of the House of Representatives (DPR) which is required to enact it as a law. Any failure to enact the interim law means that it self-repeals and the legal framework returns to what it was prior to the interim law.
The financial crisis is real and the impacts on Indonesia will be varied depending on who you ask. The government has been promoting the idea that the fundamentals of the Indonesian economy are strong and as such Indonesia will be able to weather the worst of the gathering global financial storm.
The crisis has spurred the government into action and they have released two interim laws prior to this one and a Government Regulation to implement the provisions of one of those interim laws. Interim laws are generally issued in times of crisis as a means of averting the immediate vacuums that might arise in a fluid financial environment. In essence these interim laws are designed to allow the government to role with the punches that the global financial crisis is likely to fire off in any which way it can.
The interim laws issued related to Bank Indonesia and the Deposit Insurance Corporation.
The most recent of these interim laws is the JPSK Law which in essence provides the necessary mechanisms for crisis prevention and handling. The business community was waiting for the government to pick up the ball and run with this interim law, so there is some relief that the government has finally done so.
The basis for the issue of the interim law is Article 11(5) of the Bank Indonesia Law (Law No. 3 of 2004). This Article provided a very general overview of threats that may have a systematic impact on the Indonesian economy and to anticipate other financial crises that may also result in systematic negative impacts on the Indonesian economy. Of particular concern is putting into place a regulatory framework that will ensure ongoing stability while simultaneously maintain the national economy as a whole. It is expected that the interim law will allow for greater prevention in terms of the impacts of the crisis and better handling in terms of efficiency and effectiveness once those impacts have arisen.
The National Financial Safety Net System is to come into operation in times where the economy or Indonesia’s financial fundamentals are considered to either be under threat or in crisis. The issue of this interim law suggests that the government considers the threats to be real and perhaps the financial fundamentals of the economy to be in crisis. |
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