Joko Widodo encourages regions to promote and enact open investment climate in Indonesia

President Joko “Jokowi” Widodo recently said that throughout his presidency he had met with countless investors who had expressed an interest in investing in Indonesia.

President Joko “Jokowi” Widodo recently said that throughout his presidency he had met with countless investors who had expressed an interest in investing in Indonesia. However, most of them disappeared as soon as they dealt with regional officials when applying for necessary permits, he added.

Jokowi hinted this might be the reason why many investors cancelled their investment plans because they had to deal directly with the bureaucracy.

Speaking in front of 850 regional officials in charge of investment permits, he expressed his confusion over the fact that there had always been a gap between the number of investment commitments and realized ones.

Jokowi emphasized the importance of local offices ensuring a smooth licensing process down to regional level because regions were the administration’s investors dealt with first before realizing their investments.

He acknowledged that regional investment offices were slow when processing permits, even for simple ones, such as business and building permits.

“I am asking one-stop integrated services, reagents, mayors and governors to just ‘close their eyes’ and provide permits to any industry […] accompany those investors, show them that we want to provide them with land or anything,” said Jokowi at a national meeting held by the Investment Coordinating Board (BKPM) in Tangerang, Banten.

Investment, he added, was key to developing Indonesia’s economic growth in addition to export, and yet stakeholders could not manage the difficulties in boosting both aspects.

“We have huge power in our natural and human resources, but we have been far too comfortable in exporting raw materials. All this time, we have been too afraid to venture into downstream and industrialization.”

He pointed out that a United Nations Conference on Trade and Development survey for 2017 to 2019 had ranked Indonesia the fourth most prospective country in the world to invest in.

It had also received positive investment ratings from the world’s top agencies like Standard and Poor’s, Fitch Ratings and Moody’s last year despite global economic turbulence that had also affected Indonesia, said Jokowi.

However, the BKPM reported an 8.8 percent decline in foreign investment and a 30 percent drop in foreign direct investment last year.

Meanwhile, export growth in the same year slowed down significantly, falling to 6.65 percent from 16 percent in 2017.

Jokowi, who is running for a second term, said he had shared his ideas at a Cabinet meeting recently about appointing specialized ministers for investments and exports to tackle the problem.

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“I expressed it last week during a Cabinet meeting [to evaluate] whether it was necessary to [appoint] ministers for investments and exports,” he added but did not elaborate further on the idea.

In line with Jokowi’s demand, the BKPM launched Kopi Mantap (Strong Coffee), an app for local administration officials to coordinate in permit issuances to complement the newly integrated web-based permit application system called the Online Single Submission (OSS).

BKPM head Thomas Lembong said Kopi Mantap would make communications between investment offices more efficient, thus reducing overlapping policies or abundant procedures often encountered by investors when requesting permits at regional offices.

With the help of the app, he said, the BKPM would become more confident in achieving this year’s investment target of Rp 792.3 trillion (US$55.49 billion) after it had missed last year’s goal of Rp 765 trillion, in addition to recovering external trade and monetary factors.

“The spirit [of the app] is to encourage capitalization as high as possible,” Thomas said. “Our foremost attention is certainly on the OSS, but the app we are launching this week has also become an important tool for us to keep an eye on investment realizations.”