Sacha Winzenreid, a mining partner at Pricewaterhouse Coopers (PwC), says that complexities in Indonesia's regulations caused by regional autonomy program have turned off major new investments.
Sources of Illicit Levies
Source: KPPOD survey
The analyst said that the key factors deterring major foreign investment are the murkiness created by a devolution of power to previously weak regional governments and a protracted debate over a new national mining law.
...Regional autonomy means companies now deal with increasingly dense layers of government and contradictory regulations as well as overlapping claims, Winzenreid said.
In the PWC's 2006 mineIndonesia, Winzenreid also said:
...finalisation of an investor-friendly mining law would be a significant step in the right direction...
Our article in the Jakarta Post last month also stressed the importance of the central government's clear and comprehensive guidelines for regional governments. It is crucial to reduce overlapping and contradictory regulations that are now common in the regions.
The solution, however, is not creating an 'investment-friendly' regulation, because it can also lead to abuses of human rights and indigenous people's rights as happened during the Soeharto regime (moreover, it does not even necessarily lead to better economic development, see Galagher and Zarsky, 2006). In my opinion, the problems are uncertainty and indecisive national leadership. These are the issues that this country needs to deal with.
political-economy
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2 comment(s):
Aren't Thugs protected by the Police and Military? Thugs are deployed first to collect levies. If not successful then Police and Military come to you for it.
You can just combine them into one category for simplicity.
Hahaha.. you're right, Pak Indradi!
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