Indonesia to Revises Negative Investment List

JAKARTA (TheInsiderStories) – Indonesian Government will revise the negative investment list to attract more investment come to the country. According to Minister of Industry Airlangga Hartarto the finalization of the revision would be decided in this month.

He gave a clues the item has been discussing was investment for manufacturing and medium small enterprises. He deny to give further detail on the discussion at the coordinating meeting lead by Darmin Nasution today (13/11).

Last February, chairman of Coordinating Investment Board Thomas Lembong has give a signal in a move to boost foreign direct investment in the country, the government plans to revise negative investment list.

The last revision of the negative investment list was done in 2016. The planned revision is much awaited by investors given that there are still areas that are still closed, although the government has announced it would be opened.

“We want to push the implementation of the revision of the negative list that has been launched in 2015. We admit that it is not fully implemented,” Lembong said on Feb. 9, 2018.

Foreign investors have welcome some efforts undertaken by the President Joko Widodo government over the past two years or so, including the launching of 16 economic policy packages, which include streamlining regulations. However, there still still many restrictive regulations that hamper investment.

Recently, the investment flows to the country has been declining. In the third quarter of 2018, total investment lowered 1.4 percent to Rp 173.8 trillion (US$11.4 billion) compared to the second quarter of this year at Rp176.3 trillion.

Lembong attributed the decline to the dull investment policies introduced by relevant government organizations since 2017.

“Regrettably, in 2017, there was no breakthrough in regulatory reform. It meant investment inflows were less optimal in the following year,” Lembong said.

Investment inflows in the period between 2016 and 2017 were a result of regulatory reform in 2015, including the tax amnesty in 2016. As of the first quarter, the country was still enjoying significant investment inflows.

An external factors were having a negative impact on the investment climate such as global economic slowdown, the weakness of Rupiah exchange rate, and trade war between the United States vs China.

As those impacts, many of investment countries will wait and see, so that it was made foreign investment slowdown in Indonesia. The agency has revised down this year’s investment target to Rp 730 trillion (US$49.66 billion), from initially Rp765 trillion.

Besides external factors which had made declining foreign direct investment, other factors have to support those declining, such as many of industrial raw material in Indonesia is an import contents and the rise of oil prices which makes production capacity have been suppressed.

Other one is Indonesia needs to issue investment friendly policies and breakthroughs. Some observers have predicted that Indonesian government will face defiance and trouble to lift foreign investment development in Indonesia, because this year Indonesia is coming the election year.

Meanwhile, Indonesian government has try to lift foreign investment come to Indonesia through Indonesia government will finish an infrastructure project such as connectivity and electricity project and will offer one to foreign investment to funding participation.

The country must offer banking and tourism sector to attract foreign investment, because banking and tourism industries are lucrative business sector in Indonesia due to it has many of captive market and Indonesia millennial generations  have lifestyle in tourism.

Besides that, banking industry in Indonesia has a positive prospective during Indonesia’s development program and Bank clients candidate especially from medium and small enterprises has always been growth in Indonesia respectively.