Joint Press Release on the Third Steering Committee Meeting of the Metropolitan Priority Areas for Investment and Industry

Transcription

1 Joint Press Release on the Third Steering Committee Meeting of the Metropolitan Priority Areas for Investment and Industry October 9, 2012 The Third Steering Committee Meeting of the Metropolitan Priority Areas for Investment and Industry (MPA) was held on October 9, 2012 in Tokyo. The Committee Meeting was co-chaired by H.E. Mr. Koichiro Gemba, Minister for Foreign Affairs of Japan and H.E. Ir. M. Hatta Rajasa, Coordinating Minister for Economic Affairs of the Republic of Indonesia. (H.E. Mr.Yukio Edano, Minister of Economy, Trade and Industry of Japan and H.E. Mr. Takashi Nagayasu, Senior Vice-Minister of Land, Infrastructure, Transport and Tourism from the Japanese side as well as H.E. Mr. M.S. Hidayat, Minister of Industry, H.E. Ms.Mari Elka Pangestu, Minister of Tourism and Creative Economy from the Indonesian side also attended the meeting.) 1 Master Plan for Establishing Metropolitan Priority Area for Investment and Industry in JABODETABEK Area (MPA Master Plan) [Overview] (1) The co-chairs, building on the discussion in the past two Steering Committee Meetings and six Technical Committee Meetings, welcomed and endorsed the conclusion of Master Plan for Establishing Metropolitan Priority Area for Investment and Industry in the JABODETABEK* Area (MPA Master Plan), which identifies 45 Priority Projects aimed to be completed by 2020 including 18 Fast Track Projects to be commenced by the end of 2013 in accordance with MPA Development Vision that sets 4 goals ((i) Better Urban Environment, (ii) New Growth Sub-Corridor, (iii) Multiple Gateways, (iv) Low-Carbon Energy Development) to be achieved by 2030 in the Jakarta Metropolitan Area. * Represents the Greater Jakarta Area, which comprises Jakarta, Bogor, Depok, Tangerang and Bekasi. (2) The co-chairs confirmed that MPA is a guideline for Japan and Indonesia to cooperate together based on the Japan-Indonesia Strategic Partnership toward the realization of Indonesia s further economic growth and Japan s efforts to benefit from Asian growth, and that it further elevates the mutually beneficial relationship between both countries. The co-chairs shared the recognition that MPA Master Plan constitutes a part of Master Plan of Economic Development Acceleration and Expansion of Indonesia (MP3EI); contributes to the development efforts of the Government of Indonesia; and aims at visible achievements such as the improvement of public transportation system mainly to reduce deterioration of current traffic jams in Jakarta, the central part of the JABODETABEK area, enhancement and stabilization of electric power, as well as to increase the resilience

2 against the evidence of flood risks and so on. (3) The co-chairs acknowledged that a total of approximately 410 trillion Rupiah or 3.4 trillion yen is estimated to be required by 2020 to implement Priority Projects including Fast Track Projects under MPA Master Plan (MPA projects), and confirmed that both countries will cooperate by using the public and private funding of both countries to realize MPA projects. In this regard, the Japanese side, mindful of the estimate by Master Plan that Japan s Official Development Assistance (ODA) and other foreign assistance of approximately 125 trillion Rupiah or 1.0 trillion yen is expected as a part of the necessary fund over about the next 10 years, expressed its intention to consider positively the cooperation upon the request for individual projects from the Government of Indonesia; and the Indonesian side welcomed that. (4) The co-chairs shared the view to identify 5 projects as MPA Flagship Projects, those are, Construction of Jakarta Mass Rapid Transit (MRT), Development of Cilamaya New International Port, Expansion and Improvement of Soekarno-Hatta International Airport, Development of New Academic Research Cluster, and Development of Sewerage System in DKI Jakarta among the MPA projects. The co-chairs also shared the recognition that these are symbolic projects of MPA in which the public and private sectors of both countries will work in partnership for productivity enhancement and economic development through innovation in the JABODETABEK Area, and to this end, based on the progress status of each Flagship Project, necessary works toward implementation will be accelerated. [The Further Way Forward] (1) The co-chairs shared the view to proceed with the cooperation among public and private sectors of both countries for a smooth and early implementation of each project toward the realization of MPA Master Plan. - The co-chairs confirmed and welcomed that some of the Fast Track Projects have been already commenced under the cooperation of both countries. - The co-chairs appreciated that feasibility studies have been implemented with Japan s cooperation in many projects including, for example, the Project of Development of Cilamaya New International Port, which will ease the convergence of distribution in the Jakarta through the development of the surrounding infrastructure such as access roads and contribute to the improvement of industrial cluster in JABODETABEK Area, and the construction of Jakarta MRT, which will contribute to reduce the serious traffic jam in Jakarta. The co-chairs confirmed to further strengthen the cooperation for accelerating implementation in order to start the operation of these two projects by 2020 at the latest. The Japanese side expressed its intention to implement comprehensive studies toward the early realization of integrated development near the Cilamaya New International Port, and the Indonesian side welcomed that.

3 - The Japanese side reported that it is already implementing ODA amounting to approximately 100 billion yen for the following projects among the Fast Track Projects: MRT North-South Line, Java-Sumatra Interconnection Transmission Line, Construction of Indramayu Coal-fired Power Plant, and Reconstruction of East Pump Station at Pluit; and the Indonesian side expressed its gratitude for Japan s cooperation, including JICA s utmost efforts to accelerate the implementation. The co-chairs confirmed that they will make efforts for further coordination toward the realization of the projects. - Furthermore, the Japanese side expressed its intention to consider positively and expeditiously the possibility of providing the Yen loan if the Government of Indonesia requests the funds required to implement the Fast Track Projects, including Construction of Indramayu Coal-fired Power Plant, MRT North-South Line and East-West Line, and Development of Cilamaya New International Port. - In response to this, the Indonesian side, in order to implement the MPA projects, expressed its intention to revise the Blue Book immediately as well as to accelerate steps for requesting the Yen loan and other schemes for the projects in which foreign assistance is expected to be utilized and to provide government assistance including the guarantee through the Indonesia Infrastructure Guarantee Fund (IIGF), the Crash Program, and other frameworks to projects in which private finance such as JBIC loan is assumed to be used; and the Japanese side welcomed those moves. (2) The Indonesian side expressed its intention to take necessary steps such as the promotion of preparation for projects and the resolution of institutional challenges with consideration of risk factors indicated in MPA Master Plan in order to maximally accelerate the implementation of the MPA projects. (3) With regard to a follow-up system, the co-chairs shared the view to continue the cooperative framework of MPA and to confirm the implementation progress of Master Plan by holding an MPA Steering Committee Meeting at least once a year, as well as an MPA Technical Committee Meeting at least once each half year. - Specifically, the co-chairs shared the view to facilitate MPA projects by establishing MPA Implementation Team as a unit within the Committee of Economic Development Acceleration and Expansion of Indonesia (KP3EI) that function as a coordinating vehicle to communicate with all stakeholders as well as to facilitate the acceleration of priority project implementation - It was confirmed that the Indonesian side will submit MPA Master Plan to KP3EI and report the progress regularly to the chairman of KP3EI, President of the Republic of Indonesia, and that the KP3EI secretariat will support the resolution of institutional challenges with the implementation of MPA Master Plan and closely coordinate with MPA Implementation Team.

4 2. MPA High Level Consultation for Investment Promotion (1) The co-chairs appreciated the progress made in the meetings of MPA High Level Consultation for Investment Promotion, which have been held with the purpose of exploring, with a spirit of reciprocity, ways to promote direct investment in Indonesia by making the investment-related regulations, rules and practices more conducive to direct investment. Over the year, the Consultations were held four times to discuss 6 issues on which specific achievements were noted: (i) Enhancing Socialization of the New Regulation on Investment Area The Government of Indonesia has made progress to enhance the socialization of a new law on formulating government regulations. Relevant ministries are ensuring transparency of this process and undertaking public consultation. The Coordinating Ministry of Economic Affairs is coordinating this process. (ii) Promoting Dialogues between Japanese Investors and the Key Indonesian Agencies Follow-up guidelines on transfer pricing taxation have been issued, government regulation for the Law on General Provisions and Tax procedures has been amended to simplify the appeals process, and a window for taxpayer consultation with the Deputy Director of International Tax Cooperation on international taxation disputes has been created. Regular dialogues will also be held in relation to taxation issues to strengthen the partnership between Japan and Indonesia based on mutual understanding and benefit. (iii) Improving the Import and Trade Procedures The Indonesia Coordinating Ministry for Economic Affairs, in collaboration with JICA, has undertaken a series of activities to review and streamline trade-related laws and regulations under the Technical Cooperation Project for Capacity Development for Trade-Related Administration. This has included the establishment of Trade RuleBook covering 1,323 trade-related laws and regulations to date and all of these have been translated into English. These laws and regulations have now been uploaded to the CMEA website: (iv) Improving Labor-related Practices and Regulations The Indonesian Ministry of Manpower and Transmigration is working to prepare guidelines for the settlement of industrial relations disputes, competency standards to improve knowledge of labor-related rules and regulations, guidance for appropriate labor related regulation compliance inspections, and streamlined procedures for issuing work permits for foreign workers and visit visas for foreign management executives. (v) Promoting Investment in the Energy Sector The Government of Indonesia and the Government of Japan established an Energy Policy Dialogue framework that is making a positive contribution to the relationship between the two countries. This is facilitating understanding

5 particularly in the fields of oil and natural gas, electricity, coal and mineral resources as well as energy conservation and new energy. BPMIGAS and Japan Bank for International Cooperation (JBIC) signed a memorandum of understanding to build a business model that will encourage further expansion of the total capacity of natural gas supply in Indonesia, and promote gas-related business opportunities for Japanese firms. (vi) Promoting Incentive for Direct Investment in Indonesia An Income Tax Holiday regulation has been issued by the Ministry of Finance that is serving as an incentive to attract significant investment to Indonesia. (2) Furthermore, the co-chairs recognized that some actions are under way to complete. The Indonesian side expressed its intention to enact a presidential regulation which will include the introduction of a measure similar to public comment as a specific action to enhance the predictability, transparency, and stability of Indonesian laws and regulations. The Japanese side requested the Indonesian side to smoothly admit the importation over several HS sections by general traders (API-U holder) based on the new regulation (Trade Minister Decree No ). Moreover, it expressed its concern about illegal acts by demonstrators such as blockade, which frequently occur this year, and requested the thorough prevention of illegal strikes. It requested the further progress in the establishing of reasonable taxation system and the improvement in field -level operation. It expressed its expectation for Indonesia to introduce systems toward the upgrade of Indonesian industry through the clarification of application criteria and preferential measures for supporting industry (SMEs). (3) The co-chairs approved the Report of MPA High Level Consultation for Investment Promotion. (4) Based on the Report, the co-chairs shared the view to continue the framework of MPA High Level Consultation for Investment Promotion, as well as to start the Second Round of discussion building on the past efforts. They also shared the view to continue the discussion in the Second Round about the topics such as customs, taxation, labor, and the predictability of laws and regulations; and instructed MPA High Level Consultation for Investment Promotion to report the progress of the discussion at the Second Round to the next Steering Committee Meeting. 3. The Next MPA Steering Committee The co-chairs shared the view to hold the next MPA Steering Committee Meeting at the date and place convenient for both sides in 2013.