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espite the government’s pledge to streamline bureaucracy and paperwork to kick start investment, many business players still run up against various issues that can discourage them from making further expansion in the country.

The Investment Coordinating Board (BKPM) in its assistance program found that investors still faced various problems doing business in Indonesia. The assistance program, which was launched in June, is aimed at facilitating 1,000 projects that, it is hoped, will boost investment in the country.

From the program’s launch until July 18, the board had provided assistance for 86 projects with a total investment of Rp 39.6 trillion (US$3 billion), according to BKPM data. The assistance includes, among others, identification of problems that could hamper the progress of construction, as well as mediation on behalf of companies experiencing problems, such as land procurement issues, with related ministries and other government institutions.

The board found that as many as 35 of the total number of projects have faced various problems, many of which are at the regional level. For example, a project in Central Java is still waiting for the local environmental management agency (BPLHD) to approve its environmental impact analysis (Amdal) while another project in the region is waiting for the revision of local spatial planning bylaws.

Aside from regulations, investors have also found it difficult to access project sites due to a lack of decent infrastructure. They also face other serious problems, such as insufficient electricity supply.

The Indonesian Chamber of Commerce and Industry’s (Kadin) food and beverages manufacturing industry standing committee chairman Thomas Darmawan acknowledged that the BKPM’s services had been “top-notch and innovative” in increasing the ease of doing business in the country.

For example, the BKPM this year introduced various policies such as the direct construction investment incentive (KLIK), which allows investors to commence construction on their factories before securing a building permit or environmental permit from local authorities. Another new policy from the agency is the three hour-permit service for businesses investing over Rp 100 billion or creating employment for more than 1,000 people.

However, Thomas said, permits and documents were only a small part of improving Indonesia’s investment climate, and that investors still faced many problems in the field.

Some of the main problems include infrastructure and human resources. Thomas said many companies were interested in investing in eastern Indonesia but were faced with a lack of supporting infrastructure such as paved roads and electricity.

“If we want to invest in Maluku or Papua, for example, we need to find available land. And when we do, we still need to build our own supporting infrastructure, which can be quite costly,” Thomas told The Jakarta Post recently.

Further, he said, a lack of competent human resources and sufficient natural resources for raw materials also cause investors to think twice. Such problems must be handled thoroughly and comprehensively by the government and not just the BKPM, he said.

Speaking in a discussion earlier this month, then BKPM head Franky Sibarani said the board had been working on assisting investors and facilitating meetings with local administrations and relevant institutions to find solutions to their problems.

For example, the agency has recently worked hand in hand with state-owned power firm PT PLN to supply more electricity for factories in Banten.

“Of course, these problems are not something that can magically disappear overnight. We need time and a lot of effort to find a solution,” said Franky, who was replaced by former trade minister Thomas Lembong after a Cabinet reshuffle last week.

On Friday, the BKPM announced realized investment to be on track with Rp 298.1 trillion for the first semester, 50.1 percent of the targeted Rp 594.8 trillion by year-end. The figure is a 14.8 percent increase compared to Rp 259.7 trillion between January and June 2015.

The interesting aspect of the data, according to BKPM, is that the growth rate for domestic investment has outpaced that of foreign investment, although the latter still has a larger value.

Domestic investment increased by 20 percent to Rp 102.6 trillion while foreign investment by 12.3 percent to Rp 195.5 trillion.

“A faster pace of realized local investment is very important. It indicates a higher level of confidence from the locals, which will boost foreigners’ confidence too,” the new BKPM head said.

Location-wise, a sped-up pace of investment is also seen outside the country’s main island Java, which correlates with the government’s commitment to prioritize the development push in the nation’s outer areas.

BKPM’s deputy director of investment monitoring and implementation, Azhar Lubis, noted that the processing industry was mushrooming outside of Java.

Investment outside Java grew by 17.7 percent to Rp 135.5 trillion while Java itself by 12.4 percent to
Rp 162.2 trillion. The area outside Java that has seen the largest investment is Sumatra, followed by Kalimantan; Maluku, Papua and Nusa Tenggara; and Sulawesi.

The agency also highlighted sectoral investment data, which shows that the largest local investment poured into the food industry with a realized investment figure of Rp 16.6 trillion in 523 projects while pulp, paper and the printing industry received the largest foreign investments with $2.5 billion in 130 projects.

Local investors were also keen to put money into warehousing, telecommunications, agriculture and non-metal minerals while foreign investors leaned more to machinery, electronics, chemicals, transportation equipment and food, among others.

Thomas emphasized that he wished to improve the nation’s food and its supply chain, with food prices remaining high due to inefficient supply chains .

“One of my aims is to boost food, processing and supply chain industry investment. There needs to be more warehouses, modern cattle slaughter centers as well as rice mills,” he said.