Corruption, lack of transparency block foreign investment in Indonesia: EU

19:50, December 08, 2009      

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The European Union (EU) identified Indonesia's poor governance and corruption practices as part of key obstacles to expanding trade and investment between European nations and Indonesia, the quoted an envoy as saying on Tuesday.

That was concluded by the EU's recent study on challenges and opportunities for trade and investment in Indonesia presented by Julian Wilson, Ambassador of the European Commission to Indonesia and Brunei Darussalam.

"We have identified several key factors behind the relatively low level of EU's trades and investments towards Indonesia despite the country's growing and potential economy," Julian said.

Other key obstacles and constraints identified by the study include the lack of trade facilitation, poor customs administrations, uncertain tariff rates, import controls on some commodities, the lack of transparency in government's procurements, the lack of infrastructure, and the restrictions on foreign ownership in some sectors.

Those obstacles and constraints, Julian said, might have been the reasons why the EU traded and invested more with Indonesia's neighboring countries with smaller economies or with other emerging markets of similar size as Indonesia.

"The EU, however, still sees Indonesia's growing prospects, as long as Indonesia is willing to undertake reforms to its business and investment climate and to deepen its integration process in the areas of trade in services and investment," he explained.

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