BKPM Relies on KLIK to Persuade Investors to Enter Indonesia
Licensing breakthroughs have become one of the government’s key strategies to attract more investment amidst global economic uncertainty. Through the ‘Quick Wins’ programme, the government is accelerating the investment process by implementing the Direct Construction Investment Facilitation (KLIK), also known as the Parallel Process, alongside a ‘positive fiction’ system.
Saribua Siahaan, Director of Promotion for Southeast Asia, Australia, New Zealand, and the Pacific at the Ministry of Investment and Downstreaming/BKPM, stated that the simplification of licensing is necessary to provide certainty and accelerate the realisation of investment projects in Indonesia. “It is a major breakthrough to convince investors to be increasingly confident in choosing Indonesia as their investment destination,” said Saribua during the UOB Media Editors Circle event titled “Reclaiming Global Trust: Indonesia’s Investment Agenda for a Volatile World” in Jakarta.
Through the KLIK scheme, investors can immediately begin construction in industrial estates designated by the government while processing permits in parallel. This scheme differs from previous processes that required investors to complete all licensing before commencing construction. Saribua noted that there are currently more than 60 industrial estates verified by the government that can serve as locations for the implementation of KLIK facilities. “We believe that if construction is carried out in parallel, the project will progress much faster,” he added.
In addition to KLIK, the government is encouraging the implementation of the ‘positive fiction’ system to address uncertainty regarding timelines in the licensing process. Under this scheme, if all requirements have been met but a permit is not issued by the deadline specified in the standard operating procedures, the application can be deemed automatically approved. “As long as you meet the requirements and the SOPs, and if there is no response or the permit is not issued past the deadline, then the investment permit is automatically approved and signed. It is legal,” explained Saribua.
According to him, the application of ‘positive fiction’ does not yet cover all sectors and types of licensing. However, the government aims to expand its application in the future, particularly for licensing processes that remain overly complicated.
These breakthroughs are part of the government’s efforts, alongside the banking sector, to strengthen the strategy for achieving an 8 per cent economic growth target by 2029. Based on data from the Ministry of Investment and Downstreaming/BKPM, investment realisation contributes approximately 26 to 30 per cent to national economic growth. To achieve this target, the government requires a consolidation of investment realisation amounting to around Rp13,000 trillion over the next five years. Given the massive investment target, the government considers the acceleration of licensing and business certainty to be vital factors in making it easier for investors to enter and realise their projects in Indonesia.