Jakarta. \u201cDe-bottlenecking\u201d processes and securing work permits for
\nforeign workers are pressing issues for Indonesia in helping companies
\nto set up their businesses in the country, the nation\u2019s investment chief
\nsays.<\/p>\n
The Investment Coordinating Board (BKPM) is working toward unclogging
\nIndonesia\u2019s bureaucratic investment system, BKPM chairman Franky
\nSibarani said at a forum sponsored by Jakarta Foreign Correspondents
\nClub on Monday.<\/p>\n
\u201cBKPM stands to facilitate and assist potential investors and existing
\ninvestors who are having difficulties realizing their investment,\u201d he said.<\/p>\n
All national investment permits are now being streamlined through BKPM.
\nFranky said that the BKPM was working on making the investment process
\nmore flexible, by shortening the processing time from two-and-a-half
\nyears to nine months and eliminating the requirement for a minimum
\ninvestment value. The BKPM approved investment plans valued at Rp 320
\ntrillion ($24 billion) this year, an increase of 13.9 percent from 2014,
\nhe added.<\/p>\n
Another priority for BKPM, aside from investment flexibility, is what
\nFranky referred to as \u201cde-bottlenecking\u201d. Companies in Indonesia have
\nbeen struggling with problems such as land acquisition, tax regulations
\nand shortages of raw materials, factors leading to slow progress and
\nimpediments to investment, Franky said.<\/p>\n
Of 88 companies guided by BKPM through the investment process, 66 were
\nfacing major unresolved difficulties as of May, he said. The remaining
\n22 have reportedly worked around their problems, Franky said. That
\ntranslates to a quarter of the companies under BKPM since November last
\nyear that have resolved their issues.<\/p>\n
Franky also described the difficulties in obtaining work permits as a
\n\u201cbig issue,\u201d though, he did not provide any plan or solution. Under
\ncurrent Labor Ministry rules, a foreigner seeking to work in Indonesia
\nis issued a six-month work permit rather than one year.<\/p>\n
Indonesia\u2019s economy has been slowing amid weak exports and a
\ndepreciating rupiah. The economy in the first quarter grew 4.7 percent
\nand President Joko Widodo wants annual economic growth to return to the
\n7 percent pace, banking on infrastructure spending and investments this
\nyear to help improve the economy.<\/p>\n
\u201cThere are still a lot more things to achieve, a lot more things to be
\ndone,\u201d Franky said, referring to the goals of the Joko administration.<\/p>\n
The government plans to increase infrastructure spending with the
\nconstruction of new airports, seaports and power plants. Still, in the
\nfirst half of 2015 infrastructure spending hasn\u2019t progressed as
\nexpected, with economic growth at its slowest pace since the third
\nquarter of 2009 and the rupiah trading at its lowest level against the
\ndollar since 1998.<\/p>\n
When asked about the effect of the exchange rate toward investment
\nsentiment, Franky said investors were \u201cstill optimistic.\u201d He said that
\n\u201cthe condition\u201d of the rupiah may persist until the third quarter. The
\nrupiah traded on Tuesday at 13,333 to the dollar, bringing its decline
\nthis year to about 7 percent.<\/p>\n
Franky said that the pace of job creation hasn\u2019t kept up with economic
\ngrowth. In 2004, every 1 percent of economic growth translated into
\n450,000 new jobs created. Last year, when the economy grew 5 percent,
\nonly 140,000 jobs were created for every 1 percent gain in gross
\ndomestic product.<\/p>\n
Franky said that if Joko\u2019s target of creating 2 million jobs per year is
\nto be met, the economy should be growing at least 5 percent, which means
\nthat 400,000 jobs would need to be created for every 1 percent increase
\nin GDP.<\/p>\n
The BKPM chief said that the key in meeting this target is by having the
\ngovernment support local industries and raise the minimum wage. Franky,
\nthough, did not provide details on possible policy changes in these two
\nareas.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bkpm-chief-debottlenecking-a-pressing-issue-for-setting-up-businesses-in-indonesia",
"image": "bkpm.png"
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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