Bahlil Lahadalia pledged to fixed soon twenty-four investment projects worth Rp700 trillion (US$50 billion) in Indonesia - Photo by TheInsiderStories.

JAKARTA (TheInsiderStories) – Indonesian Investment Coordinating Board Chief Bahlil Lahadalia pledged to fixed soon twenty-four investment projects worth Rp700 trillion (US$50 billion) in Southeast Asia’s biggest economy are currently stalled due to overlapping regulations and red tape.

“Around Rp700 trillion in investment have not been realized because of land acquisition, licensing or other issues. There are bottlenecks at both the central and regional government levels because of overlapping regulations that need to be synchronized,” Lahadalia told reporters at his office on Friday (12/13).

Lahadalia revealed in almost two months, it has fixed the stalled investment worth Rp128 trillion and on Saturday will resolve the investment barriers in Batam, adding President Joko Widodo has ordered all cases to be clear no later than July 2020.

“What they complain about most permits from technical ministries that they consider complicated,” Lahadalia said, summarizing his key takeaway from a meeting with the heads of the Capital Investment and One-Stop Integrated Services Agency in the regions days ago.

There were overly complicated and overlapping regulations in several ministries, including the Environment and Forestry Ministry as well as the Energy and Mineral Resources Ministry, he added.

The government has been striving to attract more investment to the country to spur economic growth, which slowed to its lowest level in more than two years in the third quarter.

Investment growth, which accounted for around a third of the country’s gross domestic product (GDP), slumped to 4.21 percent in the third quarter from 6.96 in the same period last year, Statistics Indonesia data show.

Last month, representatives of investment offices from across Indonesia agreed that the issues most often were related to multi-layered bureaucracy and regulatory overlap. Lahadalia has promised to start debottlenecking the deeply rooted issues that hindered investment at the regional level.

The head representative of Bintan Island in Riau Islands province, Hasfarizal Handra, admitted there were many bottlenecks in his region, and the regional government could not solve the problem because of limited authority. They needed to wait for the provincial government to move when there was a problem, he added.

“There were several regulations that could be simplified. For example, in the Special Economic Zone of Bintan, there is a list of 14 requirements that need to be met by investors before they bring goods to the area. However, we believe, this could be simplified to only five or six requirements,” he said.

Lahadalia just then said will focus on four pillars in his debottlenecking effort: assuring investors that Indonesia is attractive for investment, assisting investors in obtaining permits as fast as possible, making Indonesia comfortable and safe to invest in, and ensuring assistance for investors from the licensing process to the start of production.

“We have yet to become an investment haven, it is all going to Vietnam, even though our country accounts for 44 percent of the ASEAN market of 600 million people. This is because investing in Indonesia is still difficult, behind Vietnam in the ease of doing business,” he noted.

The United States-China trade war and changing global economic landscape could actually benefit Indonesia to become an emerging investment destination, Lahadalia added, reiterating the need to debottleneck investment problems.

As of September, realized investment this year has reached Rp601.3 trillion, a 12.3 percent increase from the corresponding period of last year, according to the Investment Coordinating Board, with foreign direct investment (FDI) rising 8.2 percent to Rp317.8 trillion. The investment realized from January to September represents 75.9 percent of the government’s full-year target to attract Rp792 trillion from both domestic and foreign investors.

The government has been deliberating an omnibus law on job creation, which may amend more than 70 laws with an emphasis on simplifying business licensing and investment procedures as part of a broader effort to improve competitiveness.


Written by Lexy Nantu, Email: