Monday, 28 September 2009

Indonesia eyes new cabinet posts for natural resources

Mon Sep 28, 2009 10:08am IST

JAKARTA, Sept 28 (Reuters) - Indonesian President Susilo Bambang Yudhoyono, who begins a second, five-year term next month, may create new ministerial posts to spur development of the natural resources sector, sources told Reuters.

Indonesia has some of the world's largest deposits of natural gas, nickel, copper, tin and coal, while it is the world's biggest palm oil producer and second-biggest rubber producer.

But a combination of red tape, legal uncertainty, graft and heightened nationalism has deterred many foreign investors and held back development of energy and mineral resources, depriving Southeast Asia's biggest economy of important sources of revenue.

"One idea is to establish a new coordinating minister for resources to accelerate permits and licensing to develop natural resources," said a government source, who declined to be identified by name.

The new arrangement to help fast-track development could also lead to a separation of the energy and mining portfolios, which are currently under one minister. The co-ordinating minister would oversee these, as well as the agriculture, forestry, and environment ministries, the source said.

Disputes between ministries have often held up development of natural resource projects.

A second source said that under the law the president would have to scrap other portfolios in order to establish new portfolios. One possibility was that the president could decide to merge the trade and industry ministries into one portfolio.

(Reporting by Muklis Ali; Editing by Ed Davies)