INVESTORS CAN APPROACH THE PROVINCES DIRECTLY WHILE THE CENTER IS ON HAND FOR ADVICE

HARI SABARNO Minister for Home Affairs

In an exclusive interview, Hari Sabarno describes the development of Indonesia’s 30 provinces, which today have more autonomy than they have ever enjoyed before as a result of the government’s policy of decentralization.

Q. Many potential foreign investors want to find out more about about the implications of decentralization. Are they still going to have to deal with the central government, or will they be able to deal directly with provincial administrations?

A. Investors can deal directly with provincial governments. So far, this has gone well and there has already been some cooperation with foreign companies. For example, links have been made with firms in Japan, Korea and Australia.
The role of central government is only to facilitate negotiations between the local government and the foreign government of the investor.
We expect the provincial governments to negotiate directly with the foreign investor, and to provide information and feasibility studies to assist him.

Q. How is the program of decentralization progressing?

A. The regions are dealing with the challenge of local government in a number of different ways but I think their progress can be broadly grouped into three categories: those provinces whose human resources and financial systems are prepared; those whose human resources are ready but the financial systems are not yet fully in place; and those provinces which are not equipped with the financial systems and whose laborforces are not so well prepared.

Q. What specific measures is the government making to attract investment in the provinces?

A. We are trying to tell the provinces and districts that in order to attract investment, they must make things easier for people to invest.
Indonesia is a safe place for investment and investors can go and negotiate directly with heads of local administrations. I hope they will concentrate on agriculture and agribusiness, which is the main economic activity
of Indonesia.