II. Proposals regarding Indonesia

Provide financial aid to stabilize currencies as soon as possible.

Help to relieve social unrest.

(It is worried that social order may suffer as a result of riots. The government should gather information regarding the riots and cooperate with the Indonesian government to improve the situation.)

Maintain and increase food supplies.

Maintaining and increasing food supplies is one of the most effective means of defusing social unrest.

Implement economic reforms.

Take measures to establish a stable currency system.

A stable currency is necessary for companies to carry out sound business activities. Indonesia should work in consultation with the IMF, other international institutions and developed nations to develop a system that will achieve this purpose.

Relax and/or eliminate restrictions preventing foreign firms from acting as importers.

The government only issues import licenses to Indonesian individuals and corporations. They should also be issued to foreign individuals and firms.

Relax and/or lift restrictions against foreign participation in the distribution and retail sectors.

Indonesia should allow foreign firms and their local affiliates to invest and participate in domestic retail operations. Foreign firms are not currently allowed to invest directly in wholesale companies, but must go through local affiliates. This situation should also be improved.

Formulate foreign exchange control laws.

The lack of foreign exchange control laws exacerbates the difficulty of dealing with private-sector debt. Such laws should be adopted.

Simplify and streamline tariff exemption procedures.

It takes a long time to register new items on the tariff exemption list. Procedures should be improved.

Relax regulations that restrict Japan's ability to dispatch technical specialists to Indonesia.

1. Such specialists require a working visa even when visiting only for a week. This situation should be improved.
2. Foreign personnel dispatched to provide technical support services for less than one-half year are not officially treated as employed in the host country, but the basis for this treatment has not been clearly established. That makes it impossible to ascertain correct visa application procedures. Requirements often differ depending on the individual official in charge. This situation should be improved.

Avoid tariff hikes.

Tariff hikes should be avoided.