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em>A diplomat by training and an economist by education, Investment Coordinating Board (BKPM) chairman Mahendra Siregar now has the chance to apply both disciplines as he is tasked with lobbying investors to pour their money into Indonesia. The 44-year-old, a versatile '€œall-rounder'€ official who has held strategic posts at the Foreign Ministry, the Trade Ministry and the Finance Ministry, recently discussed his strategy for retaining Indonesia'€™s status as the darling of investors in an interview with The Jakarta Post'€™s Satria Sambijantoro. Here are excerpts from the interview.

Question: We have had three BKPM chiefs within a two-year timeframe, after your predecessors left to become Cabinet ministers. How did you ensure a smooth transition and prevent confusion among investors?

Answer: Unlike other ministerial posts, the BKPM head is somewhat different, because the length of the tenure is five years, beginning after he is elected. I was elected on Oct. 1, 2013, so my tenure will finish at the end of September 2018. This post can be said to be political because the candidate is appointed by the President himself.

But, I don'€™t think [investors] would depend on a certain individual or on the personality of the BKPM head. Whoever the appointed person is, he will have the same mission of attracting investment to Indonesia.

I think investors would notice the fact that Indonesia has become more mature in its democracy and political system; a change of leadership '€” not only within the BKPM, but also other ministerial posts or even the head of state '€” should not create any uncertainty.

What does make you different to your predecessors such as Gita Wirjawan or Chatib Basri?

I think there'€™s not much difference between us, except in our style [in leading the BKPM]. The three of us see investment as being of huge importance, especially in terms of generating employment and spurring economic growth.

What Pak Gita did was to approach the potential industries or companies, while Pak Chatib and I were responsible for realizing such investments.

What will be your focus and strategy in the BKPM?

What I see interesting to note at present is the strong growth of domestic direct investments. It'€™s rational, because this shows that the stronger economic growth is followed by stronger capacity in local businesses.

I personally heard from international investors that the growing presence of local investors in Indonesia actually support them '€” it'€™s because they [foreign investors] will need more capable local investors as partners. I see that there'€™s a need to capitalize on the momentum by pushing the development of Indonesian investors further.

For these reasons, we have approached some major national investors and assured them about realizing their investments, given the growing business prospects here in Indonesia.

I think this makes my term different [compared to Gita'€™s and Chatib'€™s], because now I see an amazing momentum here to develop local investors. In the past, the capability of local investors was not as high as it is now. That'€™s the first [focus].

Second, I also see a need for Indonesia to have an overseas presence for its own firms, or pushing for '€˜outward investments'€™. It'€™s an inevitable part of a global supply chain system, where we need to support our interests in terms of raw materials, distribution, marketing and inputs that are all available overseas.

I see that this remained underdeveloped in the past '€” 10 years ago, it was even seen as triggering capital flight, not being nationalistic, etc. However, we [now] see this as a necessary strategy to strengthen our economy.

How will the tighter global liquidity this year '€” in the wake of the tapering of US quantitative easing (QE) '€” affect the flows of foreign direct investments (FDI)?

I don'€™t see it as having any impact '€” if anything, it will have positive repercussions.

As the era of excess liquidity ends, there will be less uncertainty in the financial sector and more stable exchange rate. There will be less money available for speculative purposes and, in contrast, the money could be prioritized to develop the real sector instead.

In that context, the role of the FDI will become more essential in the normal situation. I see the present situation as abnormal due to the uncontrollable flush of liquidity stemming from the QE.

When the situation returns to normal, Indonesia will be seen as a sustainable destination for long-term direct investments again. More people would soon be focusing on direct investments '€” hence, the pullback of QE is very positive for the FDI.

How do you explain to prospective investors about the labor issues here?

In relation to labor [issues], I think the challenges have been very transparent and open. So, anyone planning to invest here already has knowledge of the complexity of the issues, as well as the rules and regulations here.

We'€™re not in a place to say that the situation here is already ideal '€” but I think there should be no big surprises when certain investors are already studying and evaluating their investment plans.