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resident Joko '€œJokowi'€ Widodo'€™s first impromptu visit as President was to the office of the Investment Coordinating Board (BKPM), which says a lot about his focus on accelerating investment, a key driver of economic growth in Southeast Asia'€™s largest economy, second only to domestic consumption. The Jakarta Post'€™s Linda Yulisman recently talked to newly-installed BKPM chief Franky Sibarani to explore his views on how to attract investment and on the President'€™s plan to streamline licensing issuance by having it done by one entity, the BKPM, within the next four months.

Question: Could you elaborate on what will be your priorities in the early days of your duties in the BKPM?

Answer: As I already said earlier, the BKPM aims to accelerate our investment permit service, making it simpler, more transparent and integrated in the next few months. In addition to this, we want to facilitate projects that are currently stagnating because of a variety of reasons. We'€™re also assessing overlapping authorities and working on other issues, such as building one-stop integrated services (PTSP) in a number of regions where the facility is still absent and merging regional investment coordinating boards (BKPMD) into the PTSP.

So far, we can manage to pass initial investment permits, which we call '€œprinciple permits'€, quickly. However, problems still hamper issuance of other permits, or '€œpermanent business permits'€, as they engage multiple stakeholders from ministries to regional administrations. This is what we'€™re trying to address and to do that the BKPM needs more authority, beyond what it currently has from related stakeholders.

Based on my observation, I'€™m thinking of adopting a sectorial instead of institutional approach to overcome the permit issue. In one ministry, there are often a number of licenses according to specific sub-sectors. In the Agriculture Ministry, for example, there are cultivation of food crops, plantation crops and horticulture '€” all of which require different licenses. This also applies in the Energy and Mineral Resources Ministry with oil and gas, power generation and mining, in which the use of investment differs in nature. We need these specific authorities to issue such licenses. For certain issues, the BKPM will not require delegation of authority, but instead cooperation between related bodies affecting investment, which can exist outside the ministries, such as in the Product Certification Body (LS-Pro) that certifies manufactured products.

Simplified procedures and faster issuance of investment permits are the keys to boost our competitiveness as an investment destination. We'€™re competing tightly with our Southeast Asian neighbors, particularly with the formation of the ASEAN Economic Community next year. Our foreign direct investment (FDI) figure is still low compared to our peers. We attract only 13.4 percent of total global FDI in ASEAN and are ranked fourth after Singapore, Thailand and Vietnam. That contrasts to our huge market, which represents 40 percent of the region. So by improving our permit services, we want more sizeable investments to enter Indonesia in the future.

Apart from that, the new government also expects to generate 2 million jobs each year and investment will play a significant role in that labor creation.

In what sectors must the investment licensing be done more quickly?

We have yet to determine the sectors. We may point out 10 to 15 sectors at the initial phase. As envisioned by the President'€™s vision and mission, highlights will be put on power generation and labor intensive industries: food and beverages, textiles, footwear, toys, furniture, agriculture and the maritime sectors. We can also add import-substitute and export-oriented industries to this list.

Once these are chosen, we will think about who will be appointed from the related ministries or bodies to execute the authority in the BKPM.

In addition to improving licensing services, what are your other goals for the BKPM?

The BKPM will try to enhance the overall investment climate. For instance, it will look at how to push down high interest rates that have burdened local business players trying to do their business and make the board a driver for investment, such as by proposing incentives to pull in higher investments. With the latter, I mean that the BKPM should come up with breakthroughs that impact the economy. For example, if we can only create 2 million jobs annually, while in fact we require 4 million jobs, we must think of ways to achieve the actual needs. To do this, we may propose additional fiscal incentives and the Finance Ministry will thoroughly calculate the benefits and minuses resulting from the plan. That'€™s the core of coordination.

You also underlined the need to enhance the role of local investors in investment growth. What is the reason behind this idea?

I think the potential of local investors is enormous, particularly in manufacturing industries, and we need to promote these business players, some of which are small and medium-sized enterprises. Currently, we have a lot of obstacles hampering local investment, such as the high interest rates that I mentioned earlier, and that really erodes our domestic potential. If we don'€™t acknowledge them as our problems, we fail to do our homework.

I am into a balance between local investment and foreign investment. We are still very open and welcome foreign investment, but at the same time we want to promote and encourage local investment as well.

Do you have an investment target for the next five years?

As planned by the previous administration, we want to receive investments totaling Rp 932.9 trillion (US$75.33 billion) by 2019 and, in my view, such a target is still realistic. Our effort to improve our investment services is to help realize this target. Otherwise, investors may look somewhere else.

I want to see half of the figure coming from domestic spenders, while the other half from the FDI, a change to the 40 percent and 60 percent respectively set earlier.