4 Min Read
SINGAPORE (Reuters) - Indonesia's president told major investors in his country's natural resources not to be greedy, comments that suggest he is in no mood to row back on policies that foreign mining and energy firms have called a deterrent.
But Susilo Bambang Yudhoyono sounded more accommodative in remarks over a long-delayed $7.2 billion bank takeover by Singapore's DBS Group and on the thorny issue of reducing state fuel subsidies, which are eating up a growing chunk of the government's budget.
"My criticism to the world is that many multinational corporations take too much and do not leave behind enough for the people of those countries," Yudhoyono told a Thomson Reuters Newsmaker event in Singapore on Tuesday.
Indonesia has implemented a range of policies, especially in the mining sector, to try to force companies to invest more in downstream businesses as a way to increase the value of products before they are exported. The country is a major exporter of copper, nickel and gold, among other commodities.
The policies have led to criticism that Southeast Asia's biggest economy is growing increasingly nationalist. The former member of the Organization of the Petroleum Exporting Countries has also been criticized for doing too little to encourage investment in oil production.
"What we need is genuine partnership and cooperation. What I want is to continue to work closely with multinational corporations ... not just for (companies) ... to come and take it abroad," Yudhoyono said.
"Please understand, we too want to have a fair share. That's all we want."
Yudhoyono said fuel prices should rise to reduce the increasing budget burden of maintaining subsidies on the products, a policy that critics say diverts funds that could be used in other areas, such as for building much-needed infrastructure.
But Yudhoyono also said the impact of cutting subsidies on inflation and the poor remained major concerns, underlining how politically difficult it is to get agreement on the issue, especially with parliamentary and presidential elections due next year.
Officials have suggested the government might opt for a 50 percent increase in fuel prices for the country's 11 million private car owners. But economists say that will have little impact on the subsidies, which account for more than 30 percent of state spending.
The issue will be a key challenge for the next finance minister. Yudhoyono this month appointed his chief economic minister, Hatta Rajasa, as interim finance minister. He did not say when Rajasa would be replaced or who would become the country's fourth finance minister in four years.
The deal has been stuck though, with Bank Indonesia capping ownership stakes in local banks and politicians calling for greater access for Indonesian banks in Singapore in return.
In response to one question, Yudhoyono conceded that corruption was harder to eradicate than he had thought, but he denied it had risen in his 8-1/2 years in office. His second and final presidential term ends next year.
"It's not getting any worse, it's actually improving. But I am still not satisfied," he said. "I am frustrated, I am angry, I am annoyed."
Writing by Jonathan Thatcher; Additional reporting by John O'Callaghan and Anshuman Daga; Editing by Neil Fullick