The Jakarta Post
The past two years of President Joko “Jokowi” Widodo and Vice President Jusuf Kalla’s administration have led to positive improvements in the investment sector thanks largely to an investment service overhaul, which has boosted highly desired investment realization.
Various efforts to step up investment services for investors remain to be carried out, according to Investment Coordinating Board (BKPM) chairman Thomas Lembong.
“This is evidence of the real work that a whole rank at the BKPM has undertaken in support of the President’s vision, in order to implement improved services for both foreign and domestic investors,” Thomas said in Jakarta recently.
Thomas highlighted some of the progress that the BKPM had made during the last two years, saying that improved services and convenience were crucially important for investors. “President Jokowi always emphasizes the importance of openness and the enhancement of competitiveness, so that it will be much easier to face fierce competition in attracting investment,” he remarked.
The BKPM’s progressive moves to improve investment services were a response to a forthright instruction from President Jokowi on his first blusukan (impromptu visit) to the BKPM three days after his inauguration. Three months later, on Jan. 26, 2015, President Jokowi launched One-Stop Integrated Services (PTSP), with 22 ministries and institutions delegating their authority to issue business permits to the BKPM and assigning officers to PTSP.
The central One-Stop Integrated Services Agency (BPTSP) serves 162 variants of license and non-license products, with 22 integrated ministries and institutions, and has issued more than 25,000 licenses.
Photo courtesy of BKPM(-/-)
In addition, of all the breakthroughs in investment services undertaken by the BKPM, some are part of the economic policy package (EPP) launch by the Jokowi administration. The three-hour investment license launched on Jan. 11, 2016 by Vice President Jusuf Kalla is an integral part of EPP 2, as well as the revision of the Negative Investment List (DNI) which became part of EPP 10.
The economic policy packages launched by the government can contribute positively to the targeted economic growth of 5.1 percent in 2017. “The BKPM continues to perform various active strides, including an MoU [memorandum of understanding] with the National Police in safeguarding security in relation to investment matters," he added.
As Thomas explained, as many as 130 companies had taken advantage of the three-hour investment license service as of the second week of October, resulting in a total planned investment value of Rp 291 trillion (US$22 billion) and a goal to absorb 77,424 workers. “The absorption of labor is one of the government’s priorities in discerning the strategic value of an investment project,” said Thomas.
Meanwhile, 71 companies have utilized the ease of direct investment initiatives related to construction (KLIK), contributing a total investment value of Rp 70.54 trillion with a total land area of 888.93 hectares located in 11 industrial areas. Meanwhile, currently 66 companies have taken advantage of the green line acceleration service, provided to investors who need to accelerate the process of necessary machine imports or raw materials, resulting in a total investment value of Rp 179.9 trillion.
BKPM data shows that investment realization in the January-June 2016 period reported a 14.8 percent increase compared to the same period last year. The value of investments generated during the period reached Rp 298.1 trillion. Foreign direct investment (FDI) contributed Rp 195.5 trillion, a 12.3 percent increase from the same period in 2015.
The realization of FDI was based on the five biggest countries in terms of foreign investment, namely Singapore ($4.9 billion), Japan ($2.9 billion), Hong Kong ($1.1 billion), China ($1 billion) and the Netherlands ($0.6 billion). Until the third quarter of 2016, the realization of investment was estimated to reach Rp 445.5 trillion, about 75 percent of the 2016 target. The BKPM remains optimistic that this year’s target of Rp 594.8 trillion can be achieved.
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