JAKARTA (TheInsiderStories) – Indonesian Investment Coordinating Board projects investment realization to reach Rp886 trillion (US$63.28 billion) in 2020, higher than the target of Rp792 trillion set in 2019, the chairman Bahlil Lahadalia said on Wednesday (01/29). It divides 55 percent from domestic investment and 45 percent of foreign investment.
“With the realization above the target in 2019, we are optimistic that the investment target of Rp886 trillion can be achieved in 2020. Of course, a number of improvements have been made such as the investment climate and increased synergy between ministries and institutions continue to be strengthened,” he told reporters at his office.
Lahadalia pledged to fixed soon twenty-four investment projects worth Rp700 trillion in Southeast Asia’s biggest economy are currently stalled due to overlapping regulations and red tape. So far, his office has fixed the stalled investment worth Rp186 trillion, the rest in on the process and expects to finish it in the first half of this year.
“The projects have land acquisition and licensing matters, also tax incentives. There are bottlenecks at both the central and regional government levels because of overlapping regulations that need to be synchronized,” Lahadalia said, adding President Joko Widodo has ordered all cases to be clear no later than July 2020.
Lahadalia is optimistic that the existence of the omnibus law which is expected to be implemented this year is able to overcome a number of regulatory obstacles and ease of licensing. The government has also delegated licensing authority from the ministries and institutions back to his office via One-Stop Integrated Service policy. Permits that enter the area will be submitted to the Online Single Submission (OSS), he adds.
Lahadalia revealed that fiscal incentives such as tax holidays, tax allowances and super tax deduction have also been delegated to his office by the finance ministry. So now all permits and fiscal incentives can be given by the office, for the sake of accelerating investment realization. He also pledged to improve Indonesia’s ranking in the World Bank’s Ease of Doing Business (EODB) index from the current at 73rd to 60th in 2021 and expects to 40th in the four next year.
In line with that, his office and the Indonesia Stock Exchange (IDX) signed on Tuesday a memorandum of understanding (MoU) that will enable the bourse to guide both foreign and domestic businesses to conduct initial public offerings. The agreement could also provide an alternative funding method for small and medium companies that lack the capital to expand, Lahadalia said. In turn, such growth will create new jobs, he added.
“This is the right step with our current economic growth rate stuck at 5 percent. A strategic move needs to be made. The key to economic growth is an investment. Thus, we will guide 26,000 companies to publicly list their businesses in Indonesia,” he said.
Around 668,228 registered companies operated in the country as of December 2019, comprising 642,309 domestic companies and 25,919 foreign companies, according to the Online Single Submission licensing system. Lahadalia said he aimed to lure 1 to 2 percent of the nearly 26,000 foreign companies with the agreement.
In 2019, the investment realization entering the country reached Rp809.6 trillion, above the Rp792 trillion target set by the government. The figures also increased 12.24 percent or Rp88.3 trillion from Rp721.3 trillion reached in 2018. Domestic investment increased 17.3 percent to Rp386.5 trillion, while foreign direct investment rose 8.2 percent Rp423.1 trillion, during this period.
Written by Lexy Nantu, Email: email@example.com