RI TRADE MINISTER PROMOTING BATAM, KARIMUN FTZ IN JAPAN

Tokyo, Jun 30 (ANTARA) - Trade Minister Mari Elka Pangestu has arrived in Tokyo to attend an investment seminar during which she will also promote the Free Trade Zone (FTZ) in Batam and Karimun in Riau Island province, Indonesia, among Japanese investors.

"Promoting the FTZ in Batam and Karimun among Japanese investors is a must because our Economic Partnership Agreement (EPA) with Japan is to go into effect on July 1. We have to support the accord's implementation with promotions," the minister said before attending the seminar here on Monday.

In addition to the FTZ in Batam and Karimun, the minister said, she would also promote the potentials of Indonesia's creative economy in the Japanese market.

The minister was accompnied by the head of the Capital Investment Coordinating Board (BKPM), M Lutfi, and Riau Islands Governor Ismet Abdullah.

From Tokyo, the Indonesian delegation would on July 2 proceed to Osaka also for promotional purposes.

The EPA is aimed at increasing Indonesia's exports to Japan and encouraging Japanese investment to Indonesia.

Pangestu admitted that Japan's economic slowdown would significantly affect the flow of its investment to Indonesia but the EPA was expected to enhance the two countries' economic cooperation.

The Indonesian government was also making continuous efforts to improve the investment climate to encourage foreign investors, she said.

Singapore, she said, had committed itself to increasing its investment in small and medium scale businesses in Indonesia.

Meanwhile, Singaporean Trade and Industry Minister Lim Hong Kiang who had also come to Tokyo for the investment seminar said the Indonesian government had already made some changes to improve the investment climate, especially for Singaporean businessmen.

However, he said, some of Indonesia's legislation still needed to be revised such as the taxation and manpower laws.

Meanwhile, Indonesia-Japan trade during the past five years has grown 13.5 percent from US$17.8 billion in 2003 to US$30.2 billion in 2007.

Indonesia's exports to Japan in 2007 reached US$23.6 billion or up 8.8 percent from US$21.7 billion in 2006.

The value Japanese exports to Indonesia totaled US$6.5 billion or up 18.3 percent from US$5.5 billion in 2006.

Japanese investors had so far adopted a "wait-and-see" attitude about doing business in Indonesia as they still had doubts about the country's political stability and were still seeing problems in the infrastructure and manpower situations.

A survey by the Japan Bank for International Cooperation (JBIC) showed that Japanese investment in Indonesia was also hampered by lack of qualified human resources and problems in transparency.