Indonesia pledges more open trade policy

SINGAPORE (AP): Indonesia plans tax and customs reforms that will make it easier for foreign investors to do business, and seeks trade agreements with other Asian nations, Indonesia's trade minister said on Friday.

At a business conference, Minister Mari Pangestu said Indonesia was streamlining import procedures and eliminating "excessive" local taxes, as well as pursuing trade negotiations with South Korea, Australia, New Zealand and Japan.

"The end result will be a much more open trade regime," Mari said.

Foreign investors have long been concerned about corruption, bureaucracy and legal guarantees in Indonesia, which has a large labor pool and rich natural resources, including oil, natural gas, coal and timber. The vast nation, spanning thousands of islands, expects economic growth of 5.5 percent this year.

Indonesia is now a flourishing democracy, but its newfound stability has failed to assuage many investors who are concerned about graft and red tape.

Singapore's trade minister, Lim Hng Kiang, cited the Indonesian island of Batam as a business success story, saying the industrial center had attracted almost US$9 billion in investment, housed operations of more than 500 multinational companies and had created 170,000 jobs.

Batam was once a poor island of fishing villages, but has benefited from its proximity to Singapore, one of the region's business hubs. Today, it is full of tourist hotels and industrial parks.