EAST INDONESIA PLAYS IMPORTANT ROLE IN ACFTA

Makassar, Jan 25(ANTARA) - Eastern Indonesia will play an important role in supporting the Indonesian economy as an area covered by the ASEAN-China Free Trade Area (ACFTA).

INDEF economic analyst Aviliani said here Sunday eastern Indonesia has a big agricultural and plantation potential with the support of wide and low-cost land.

In not later than the next five years, eastern Indonesia will be developing rapidly, and this year several investors have started investment in the region, and this favorable situation needs to be supported by government fiscal incentives, he said.

One of the big plantation potentials is crude palm oil (CPO). And it has been predicted that in the next ten years fossil energy deposits will be depleting, and the world will start turning to biofuel under the green energy campaigns, he said.

He said that thoughts now need to be focused on expanding the upstream industry, protection of farm commodities, while liberalization needs to be sought, for which it would be necessary to consolidate the downstream and upstream sectors and government subsidies need to be focused on the end-users.

In addition, the government also needs to strengthen national standards and reduce assistance from foreign institutions.

He added that one way which might be possible to boost the entry of investors is better land tax arrangements.

"Land tax is not necessarily to be imposed each year, but in every five years, for instance, and prices need to be set on the basis of the population's economic classification," he said.

The government has also been suggested to increase the number of contracts of work with private business to hasten the construction of infrastructure projects.
On the same occasion, Project Manager of Citraland Celebes Lauw Hendra fully realized the potential of the developments in eastern Indonesia.

"The direction of our development is to Eastern Indonesia, for which we have started the development of Makassar after Samarinda and Balikpapan and then may be Kendari," he said.

With regard to Papua, he said things are not so easy, because there it is too easy to declare land as customary land.