BKPM Chief Explains Why Indonesia's Foreign Investment Decline Is Lower Than Other Countries

Based on data from several global institutions, foreign direct investment (FDI) globally has declined by up to 30 to 40 per cent, whilst Indonesia’s drop was only 10 per cent. Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia explained that Indonesia’s FDI fell by only 10 per cent because, since he took office as BKPM chief in October 2019, his agency immediately set about resolving stalled investments. “So when I entered BKPM in October 2019, there were stalled investments of approximately Rp 708 trillion. These stalled investments had been ongoing for around four to five years and were never resolved,” Bahlil said during the Market Outlook 2021 ‘Resilience to Counter Economic Turbulence’ event on Tuesday (17/11). Previously, many people questioned why Indonesia’s FDI did not drop by more than 10 per cent compared to other countries, which saw declines of up to 40 per cent. This was because, over the course of a year, BKPM resolved the stalled investment issues with the aim of attracting investor interest again. “Now, Rp 474.9 trillion has been realised. The key is that we spent nearly a year resolving these issues,” he stated. He noted there were three main issues that prevented Indonesia’s FDI from experiencing a significant decline. Firstly, BKPM resolved sectoral ego issues between ministries and agencies. Secondly, it resolved overlapping regulations at the district, provincial, and central levels. Thirdly, issues related to land. “We must admit that this land issue is very complex. In my words, it is like a creature that can be felt but cannot be held. These top players are our focus at BKPM,” he concluded.