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No more business as usual: President
In a world where everything moves so fast and economic rivalry becomes fiercer among nations, Indonesia should no longer take anything for granted, or it will be left behind, says President Joko âJokowiâ Widodo
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In a world where everything moves so fast and economic rivalry becomes fiercer among nations, Indonesia should no longer take anything for granted, or it will be left behind, says President Joko 'Jokowi' Widodo.
Speaking in front of governors and regents at the State Palace in Jakarta on Monday, Jokowi warned that Indonesia needed to work extra hard to improve its comparative advantages in order to be able to survive in the more competitive world. He said Indonesia should regard other nations as its rivals, including other ASEAN members.
'Although we [ASEAN leaders] held hands together at the ASEAN summit, I personally view other ASEAN countries as competitors,' said Jokowi. If other Southeast Asian countries can do everything fast, Indonesia should be able to do so, or it will be left behind, he added.
In terms of ease of doing business, the world's fourth most populous nation is ranked 109th among 189 economies, lagging behind neighboring countries Singapore (first), Malaysia (18th), Thailand (49th) and Vietnam (90th), according to the World Bank's Doing Business 2016 ranking
The ranking is based on a number of indicators, such as ease of starting a business, dealing with construction permits, electricity set-up costs and registering property. For many foreign investors, Indonesia has long been known for its infamous red tape and high-cost economy.
Jokowi said that the country had to change its traditional way of doing business to lure more investments in order to provide jobs and improve people's welfare.
The President said that he had assigned all the ministries and the Investment Coordinating Board (BKPM) to cut bureaucratic procedures in order to be able to improve the country's ranking to 40th in the World Bank's Doing Business 2017 ranking.
BKPM head Franky Sibarani said on a different occasion that the government had completed half of its 36 to-do-list items to achieve the ambitious target.
On Monday, the BKPM signed memorandums of understanding (MoUs) with six provincial governors, nine regents, the National Police and the Attorney General's Office to make sure that investment facilities for infrastructure development in 14 selected industrial zones could be smoothly utilized.
The BKPM also signed similar agreements with the transportation, energy and mineral resources, public works and public housing and communications and information ministers to facilitate the implementation of three-hour licensing for investment in the infrastructure sector. It has also issued investment facilities to companies operating in several industrial zones.
Among the industrial zones entitled to the scheme, abbreviated as KLIK, are the Modern Cikande industrial estate (Banten), the Bekasi Fajar industrial estate (West Java), the Wijayakusuma industrial estate (Central Java) and the Medan industrial estate (North Sumatra).
The three-hour licensing, meanwhile, will apply to a number of infrastructure investments, such as those in energy, transportation and communications and information.
As a special treatment to help develop the country's infrastructure, both facilities may be enjoyed by any investors in the sectors without the requirements of a minimum Rp 100 billion (US$7.4 million) investment and of employing 1,000 workers, as are applied to other sectors.
Indonesia's poor infrastructure has so far made the country's regional logistics performance mediocre.
The Industrial Estate Association (HKI) lauded the BKPM's move, but urged the government to improve legal certainty to provide safety and comfort for investors in the country, chairman Sanny Iskandar said.
