Make It Easy for Investor, Jakarta Launches Investment Center

Inaugurating of Jakarta Investment Center by Governor of Jakarta, Anies Baswedan (31/07) - Photo by Jakarta's Government Office

JAKARTA (TheInsiderStories)–Investment will continue to increase with the launch of Jakarta Investment Center (JIC), said Head of Investment and Integrated Services One Stop of Jakarta, Edy Junaidi on Tuesday (31/07).

“Insyallah with the birth of the JIC could boost economic growth and expand employment in Jakarta,” he said after inaugurating together with the Governor of Jakarta, Anies Baswedan.

Recently, Indonesian government launched Online Single submission (OSS), an integrated web-based business permit application on July 9. The design of this information technology-based system is basically by interconnecting and integrating licensing service system in the Investment Coordinating Board and in the provincial using the Communication and Information Ministry system.

The system includes various ministries and institutions issuing licenses, including Indonesian National Single Window (INSW) system, General Legal Administration System of the Ministry of Justice and Human Rights, and the Information System of Population Administration of the Ministry of Home Affairs.

According to the Coordinating Ministry for Economic Affairs (CMEA) data on May 2018, 17 provinces completed the task forces desks in the provincial and regency or municipal levels including Jakarta, Central Java, Yogyakarta, Riau, North Sumatra, and South Sulawesi. However, another 17 provinces have not yet completed the task forces booth in the regency or municipal levels including East Java.

The OSS operation is currently under the control of the CMEA with the support of INSW and other relevant ministries. However, this is only a transitional period while preparing for its permanent implementation at the Investment Coordinating Board.

Junaidi explained, JIC facilitates is set up to faced the problems by prospective investor or investors if they have problems in the realization of its investment in Jakarta.

In his speech at the JIC launching, Baswedan expect the level of investment in Jakarta increased. “Hope this year can be better at least in the first quarter we scored high at Rp2.9 trillion,” he said.

JIC itself is a potential for regional economic development efforts and investment to provide convenience to investors. Investors can either invest through one door system at the JIC.

The investment climate in Indonesia is still haunted by various problems including lack of infrastructures, lack of incentives, high energy cost, high dependency on the imported raw materials, and high logistic cost.

In the energy cost, electricity tariff n Indonesia is more expensive than Vietnam and Bangladesh. Indonesia’s electricity tariff is about US$0.12 per kWh, much higher than its peers such as Vietnam and Bangladesh which is only US$0.7 and US$0.5, respectively.

In addition, the country’s logistic cost-to-GDP ratio is far higher than those of neighboring countries, including Thailand and Malaysia where the ratio reached 15 per cent and 13 per cent, respectively.

Indonesia is also scored poorly in the World Bank’s 2016 Logistics Performance Index (LPI), as it got the 63rd rank out of 163 countries. Indonesia’s logistics infrastructure, international shipment, and logistics competence are elements scored the least.