TEMPO.CO, Jakarta – Companies listed in the Indonesia Stock Exchange (IDX) are encouraged to expand to Southeast Asias countries in order to prepare for the implementation of the ASEAN Economic Community (AEC) next year.

"Issuers should be able to improve their capital structure so they can have a shot in the AEC," IDX director Ito Warsito spoke at the CEO Networking 2014 forum in Bali last weekend.

The biggest challenge, according to Ito, will be faced by domestic brokers who will have to have better quality in order to compete with other brokers in ASEAN. Therefore, he encourages domestic brokers to obtain certificates from the Financial Services Authority (OJK).

Meanwhile, chairman of the Indonesian Issuers Association, Franciscus Welirang, said Indonesia's biggest challenge in entering the AEC is the government's "almost absolute" role in deals and agreements, while industry associations' and market participants' role are actually lacking.

He also considers Indonesia weak in providing adequate infrastructure, and that local banks are not very accommodating to investment. "Capital interest rates are too high and lending more rates are more than 13 percent," he said.

There is also the complicated bureaucracy and taxation, he said, causing high import costs. Importing from Indonesia is 10 percent more expensive Singapore and Malaysia.

"High electricity tariff also lowers the industry's competitiveness," he said.

FAIZ NASHRILLAH | DINI PRAMITA | ABDUL MALIK