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Government Improves Ease of Investment in Indonesia

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By: Rivaldi Adrian )*

The government continues to improve the ease of investment in Indonesia as an attraction for investors to invest in a country. This convenience is expected to foster investment.

The Minister of Investment/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia has met the Indonesian President Joko Widodo to report on the development of the investment ease rating in Indonesia.

Bahlil said that the ranking was obtained from an assessment by the United Nations Conference on Trade and Development (UNCTAD) regarding regulatory reforms to facilitate investment and now Indonesia is only one point adrift of Singapore. Where the value of Indonesia is 18 and the value of Singapore is 19.

He explained that there were at least five indicators that were assessed by UNCTAD, namely permit transparency, speed synchronization, service, Online Single Submission (OSS), as well as efficiency in licensing management and certainty.

The investment ease rating taken through improving licensing, facilities and incentives for investors will certainly have an impact on investment realization.

However, Bahlil emphasized that President Joko Widodo ordered that investment should not only dwell on the amount of value realized, but also on the quality of the investment itself.

This year, President Jokowi is targeting an investment value of IDR 1,200 trillion, next year he will be given a target of IDR 1,400 trillion. Not only in numbers, but also in the spread of investment between Java and outside Java.

Certainly not only to build investments based on high technology, but also to be labor-intensive, because after the pandemic Indonesia needs quite a lot of jobs.

On the same occasion, Bahlil also reported to the President regarding the results of his assignment who had just returned from the 25th Session of the ASEAN Investment Council (AIA Council) in Cambodia. In the forum, it was also explained that Indonesia is a country with the second largest number of foreign direct investment (FDI) after Singapore.

Previously, Bahlil has also committed to continuously improve the ease of doing business (EoDB) indicator in Indonesia. Currently there are several indicators that are experiencing rapid improvement in terms of procedures, costs and time.

Bahlil explained that the Indonesian government was implementing Law No. 11 of 2020 on Job Creation. This is of course related to the ease of doing business that is friendly to investment.

It is hoped that the improvements made will produce positive results, such as the entry of investment, the creation of employment opportunities and increased people’s welfare.

Several indicators have improved, such as starting a business, which previously required 11 procedures, 10 days and a cost of 5.7 percent to only 4 procedures, 2.5 days, with a cost of 4.3 percent.

Enforcing Contract (enforcement of contracts) which previously took 390 days and a fee of 74 percent, became a maximum of 85 days and a fee of 9.5 percent through e-court (electronic court).

In addition, improvements to the Dealing With Construction Permits indicator which previously required 18 procedures, 191 days, cost 4.8 percent, became 6 procedures, 16-21 days and costs 0.62 percent.

Registering Property (property registration) which previously required 6 procedures, 28 days and a cost of 8.5 percent to 3 procedures, 6 days and costs the same as using digitalization of cadastral and spatial planning.

The government will also continue to encourage promotions related to the ease of investing in Indonesia, by prioritizing the issue of investment and sustainable development. Digitalization will also have an important role in investment and sustainable development. Digitalization will also have an important role in investment by prioritizing the competitive advantage of investment opportunities in the country.

A study from Standard Chartered in a survey entitled Borderless Business Studies showed that US and European companies ranked Indonesia in the 4th place in ASEAN as the most preferred country in terms of opportunities to build or expand resources, sales or company operations for six to five years. the next twelve months.

The study revealed that 42 percent of US and European companies see the greatest growth potential in overseas markets. In addition, the OSS system, which consists of information sub-systems, business licensing and supervision, is expected to meet the needs of investors and the expectations of the business world.

In 2021, investment realization will reach Rp 901.02 trillion. PMA contributed Rp 454 trillion (50.4%), grew 10% compared to the same period in 2020. Meanwhile, PMDN has contributed Rp 447 trillion (49.6%) which also grew by 8.1% compared to the previous year

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