The BKPM aims to attract investment of Rp. 594 trillion this year. BKPM head Thomas Lembong expressed optimism that the investment realization would be achieved.

This belief is based on the realization of domestic investment (PMDN) and foreign direct investment (PMA) during the second quarter (April-June ), which amounted to Rp 151.6 trillion, while the accumulation from January to June amounted to Rp 298.1 trillion. That means half of the target had been reached within the first six months. Investment until the end of the year still has to be accelerated by another half, amounting to Rp. 296.7 Trillion.

The implementation of one-stop integrated services (PTSP) is a government program based on Presidential Instruction (Inpres) No. 4/2015. It is the process of licensing reforms undertaken by the government to support the fast, simple, transparent and integrated issuance of licenses and permits. Under the Inpres, the BKPM acts as coordinator and  PTSPs as organizers with regard to licensing activity.

The PTSP BKPM center is part of the reform process. The BKPM unifies licensing services in 22 government institutions that were previously run separately. With PTSPs commanded by the BKPM, all investors, both foreign direct investment (FDI) and domestic investment (DCI) will practically leverage investment in Indonesia. That is why PTSPs have received a positive response from the business world. The Improving investment climate is starting to show results.

Based on the data, investment has increased significantly. Realization of investment in the second quarter 2016 reached Rp151.6 trillion, up 12.3 percent from the same period the previous year, to Rp 135.1 trillion. The figure also broke the highest record of investment realization in Indonesia.

These investments comprised of DCI amounted to Rp52.2 trillion (up 21.7 percent from Rp42.9 trillion in the period).

The BKPM under the leadership of Thomas believes that PTSPs improve and simplify investment licensing, attracting more investors to the country. The three-hour investment licensing service has turned into a reliable BKPM program to attract investors. This service automatically changes the old paradigm about the difficulty of investment licensing, although the three-hour investment licensing services still requires a minimum investment of Rp100 billion, and/or the absorption of 1,000 workers.

As for product licensing, the three-hour investment licensing service will provide investors with  an investment permit and taxpayer identification number (NPWP), a deed of legal entity may be processed and issued by a public notary, but such deed should be legalized by the Law and Human Rights Ministry, Company’s Registration Evidence (TDP), Plan of Foreign Workers Employment (RPTKA), Importer Producer Identity Number(API) and the Customs Identification Number (NIK).

To support the implementation of PTSPs, the BKPM has also built an application system to serve investors in the licensing process for the implementation of investment activities in the territory of the Republic of Indonesia (SPIPISE), which is expected to complete the passage of the PTSP program and facilitate investor information and accelerate licensing. There are three platforms on SPIPISE, namely: processing applications licensing, tracking documents and application status and information portal.

Investment Data

According to recent BKPM data, distribution investment outside Java increased to Rp69.6 trillion, or equivalent to 45.9 percent of the total investment, compared to the second quarter of 2015 at 44.7 percent. The realization of the investment on Java Island itself was Rp82.0 trillion (54.1 percent).

PMA realization based on the location of the project (top five) are: West Java (US$ 1.2 billion); Jakarta (US $ 1.0 billion); Banten (US$ 0.7 billion); East Java (US$ 0.7 billion) and Riau (US$ 0.4 billion).

Meanwhile, FDI realization by business sector (top five) are: primary metals industry, metal products, machinery and electronic industry (US$0.9 billion); mining (US$ 0.7 billion); basic chemical industry, chemical and pharmaceutical goods (US$ 0.6 billion); housing, industrial and office (US$ 0.6 billion) and the food industry (US$ 0.5 billion). If all industrial sectors were combined, it would be seen that industry contributed US$ 3.9 billion, or 54.2 percent of total FDI.

Domestic investment by project location are: East Java (Rp11.8 trillion); West Java (Rp8.8 trillion); South Kalimantan (Rp5.5 trillion); Jakarta (Rp5.2 trillion) and Riau (Rp2.7 trillion).

Meanwhile, domestic investment by business sector (top five) are: transportation, storage and communication (Rp8.4 trillion); non-metallic minerals industry (Rp8.1 trillion); food industry (Rp7.7 trillion); construction (Rp6.3 trillion); and food crops and plantation (Rp3.5 trillion). If all industrial sectors combined, then it shows that industries contributed Rp 25.2 trillion or 48.3 percent of total domestic investment.

Thomas is optimistic that the prepared policies and investment schemes will encourage equity and increased investment outside Java, which will in turn can increase employment and stimulate the economy in the regions as well as help achieve the investment target in 2016.

The realization of FDI by country of origin (top five) are: Singapore (US$ 2.0 billion); Japan (US$ 1.3 billion); Hong Kong (US$ 0.6 billion); People’s Republic of China (US$ 0.5 billion) and Malaysia (US$ 0.4 billion).

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