Experts welcome move to ease investment procedures<\/p>\n
Urip Hudiono, The Jakarta Post\/Jakarta<\/p>\n
While welcoming the government's most recent plan to improve the
\ncountry's investment climate by reducing the time required for an
\ninvestment permit to just 30 days, analysts are questioning how
\nthe government will actually implement the plan.<\/p>\n
National Economic Recovery Commission (KPEN) chairman Sofyan
\nWanandi told The Jakarta Post on Tuesday that what was most
\nimportant was how the Office of the Coordinating Minister for the
\nEconomy would ensure coordination between all the institutions
\ninvolved in the investment process under the Investment
\nCoordinating Board (BKPM).<\/p>\n
\"The government should particularly focus on the agencies
\nwithin the Ministry of Finance and the Ministry of Trade and
\nIndustry, as well as local administrations,\" he said.<\/p>\n
Under the Local Autonomy Law (No. 22\/1999), local
\nadministrations headed by governors, regents and mayors have a
\nsay in all matters relating to investment within their respective
\njurisdictions.<\/p>\n
Sofyan pointed out that the main problem to date was that
\nlocal administrations were often reluctant to work together with
\nthe BKPM.<\/p>\n
\"Their chief executives act like petty kings, and often
\ndisregard the BKPM in matters concerning investment,\" he said.<\/p>\n
The BKPM should therefore be given greater powers if the
\ngovernment really intended to reduce the current cumbersome
\nbureaucracy, Sofyan said.<\/p>\n
In a bid to attract badly needed foreign direct investment
\n(FDI), Coordinating Minister for the Economy Aburizal Bakrie said
\nlast week that the government was working on cutting the time
\nneeded for investors to obtain the necessary permits to 30 days
\ncompared to 151 days at present, as revealed by a recent World
\nBank survey.<\/p>\n
The government would also implement set a time limit for the
\napproval of FDI applications, under which the application would
\nbe considered approved if the BKPM failed to give its response
\nbefore the expiry of the statutory deadline.<\/p>\n
Economist Didik J. Rachbini from the Institute for the
\nDevelopment of Economics and Finance (Indef) agreed with the
\nproposal to automatically approve an investment application upon
\nthe expiry of the set time limit, saying it would encourage the
\nvarious institutions involved to do their work in an efficient
\nand timely fashion.<\/p>\n
\"These institutions would be compelled to quickly process all
\ninvestment applications. Otherwise, the could be accused of
\nimpeding investment into the country,\" he said.<\/p>\n
Didik added however that it would be better for the government
\nto convert the BKPM into an investment promotion agency.<\/p>\n
\"Attracting investment is not just about slashing the time
\nneeded to approve investment permits,\" he said. \"It should be
\nmore about promoting the country, including building high-level
\ndiplomatic ties with potential investor countries.\"<\/p>\n
Didik also suggested that the government draw up a blacklist
\nof local administrations that had been found to be making it
\ndifficult for investors to invest in their regions.<\/p>\n
\"If they do not show any interest in attracting investors,
\nthen they should be excluded all the way,\" he said.<\/p>\n
Meanwhile, analyst Umar Juoro from the Center for Information
\nand Development Studies (CIDES) disagreed with the time limit
\nproposal, arguing that it would be counterproductive and could
\ncause confusion among investors.<\/p>\n
\"Normally, if an application receives no response, it means
\nthat it is rejected, not approved,\" he said.<\/p>\n
\"Anyway, why is it so difficult for the BKPM to issue an
\napproval or rejection on time? This, in my opinion, is the whole
\npoint of improving the functions and credibility of the BKPM.\"<\/p>",
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