Jakarta, Sept 29 (Antara) - The Indonesian government announced a second tranche of economic policy package on Tuesday, aiming to attract more investment by providing facilities to investors and exporters to do business in the country.
According to Chief Economic Minister Darmin Nasution, since the aim is to draw more investment, the government is determined to cut the bureaucratic red tape and the time taken to wrap up licensing procedures to only a few hours from the several days it used to take so far.
Unlike the first economic policy package announced by President Joko Widodo himself on September 9, 2015, the second economic policy package was announced on Tuesday (Sept 29) by the working cabinet ministers.
Several policies issued by the government are aimed at simplifying procedures and expediting the licensing process to draw more investment.
"(We) hope that it would need only three hours," Minister Darmin Nasution said when announcing details of economic policy package at the presidential office on Tuesday.
Darmin said there are two types of investment licenses: one for investment in industrial estates and the other for investment outside industrial estates.
Under the old regulation, licensing procedure for investment outside industrial estate could take up to eight days, he said.
Trade Minister Thomas Lembong is convinced that the issuance of the deregulation policies will help attract foreign investment again to Indonesia. Earlier, foreign investors had been withholding their investment.
"When the Ministry of Trade and the Ministry of Industry issued regulations which missed the targets, foreign companies stopped their investments worth trillions of rupiah. I am optimistic that with rationalization of regulations, the foreign investments will return to Indonesia," the Trade Minister said.
Before the announcement of the second tranche of economic policy package on Tuesday, President Joko Widodo held a meeting with his working cabinet ministers and other state officials.
During the meeting, Joko Widodo urged the economic ministers to make a breakthrough in resolving investment problems, particularly in relation to permits, licenses, and certificates.
"A breakthrough should be made by the economic ministers quickly. It is very important (that they do so)," President Joko Widodo said in the limited cabinet meeting.
"We need to make a breakthrough to overcome the investment problems in the country. We should cut the time-consuming bureaucratic red tape which makes it difficult to go through procedures to obtain permits, licenses and certificates. We should do so to make it easier to do business in Indonesia," the President said.
To support the efforts, the President noted, a strong breakthrough needs to be made in the land acquisition process to convince the investment world that Indonesia means business.
In addition, investors should be informed of the availability of an increased amount of electricity supply.
Regarding the efforts to cut red tape, Head of the Investment Coordinating Board (BKPM) Franky Sibarani said prospective investors will need only three hours to obtain an investment license from the agency.
"That includes the license itself, the articles of association of the company and NPWP (registration number of tax payer)."
"For investing in the industrial estate, within a span of three hours, the prospective investors would be able to choose a location and start construction," he said.
The minimum amount of investment has been set at Rp100 billion or it must provide at least 1,000 jobs for Indonesians, he said. "For investment in the industrial estate, an investor would need to only sign commitments for certain norms like analysis of environmental impact," he added.
He said the President has also assigned the BKPM and related ministries to simplify the licensing procedure for investment in industries that have the potential to be the country's economic backbone.
The new economic policy package is the second in the series. The first such package was announced by the government earlier this month.
The BKPM is taking three strategic steps to accelerate infrastructure development, namely, abolition of restrictive regulations on investment, removing bottlenecks and marketing infrastructure projects.
A BKPM deputy for capital investment plan, Tampa Hutapea, said the development of infrastructure is one of the top priorities in the government development program.
The BKPM, therefore, will continue its campaigns to draw more investment to the infrastructure sector, he said. Investors need adequate infrastructure and development of infrastructure needs investment, he said, adding that the BKPM would help speed up implementation of investment.
He said the success of the country in attracting foreign investors was dependent on a number of factors, including the availability of infrastructure.
The BKPM recorded a significant increase in the implementation of infrastructure projects lately.
In the first half of 2015, investment in infrastructure reached Rp72.2 trillion, equivalent to 63 percent of the investment realized in 2014 or 93 percent of that in 2013.
The BKPM also recorded a significant growth in investment plans in the infrastructure sector.
In the first half of 2015, the BKPM issued in principle licenses for investments valued at Rp314 trillion, reflecting a five-fold increase over the same period in 2014.
Earlier, before the announcement of the economic policy package, Minister Darmin Nasution had said that the policy will be explained sector wise.
"So, we will select them sector wise. There might be six to seven sectors, details of which would be spelt out soon," Nasution stated at the Presidential Office before attending the cabinet meeting.
"The government will not announce the policies all at once as it did recently in the previous package because it would eventually only show figures, such as how many government regulations (PP), presidential decisions, ministerial decrees, and others are there," the Chief Economic Minister stated.
According to Nasution, the government will only explain some of them, possibly just three sectors. Bank Indonesia (BI) and the Financial Service Authority (OJK) will thereafter announce their policies.
"As far as the government is concerned, there might be policies related to the industry, exports and finance. We will also again elucidate on the economic policy package announced in the first phase but in on the basis of sector by sector and per day, one after the other. It was likely that the new package will be explained separately," noted the Chief Economic Minister.
He said the government will also tender an explanation about its recent economic policy package as the people, including businesses, have not yet fully understood it.
Nasution said his ministry will also explain the policies sector-once the follow-up economic policies are issued, so that these become clearer. "If we issue tens of or 90 regulations all at once, then people will never understand these. So, we will opt to explain it sector wise," he emphasized.***3***(A014/INE)EDITED BY INE |
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