Luthfi takes up BKPM post with new mission
Zakki P. Hakim, The Jakarta Post, Jakarta
The government officially installed Muhammad Luthfi as the new head of the Investment Coordinating Board (BKPM) on Monday.
The most pressing him will include finalizing the investment bill, slashing the time needed to start up businesses and ensuring better coordination with the relevant ministries.
"We expect the new BKPM head to immediately finalize the investment bill under the coordination of the trade minister, as domestic and foreign investors have long been waiting for the new legislation," Coordinating Minister for the Economy Aburizal Bakrie said during the installation ceremony.
Aburizal said the bill should accommodate the views of the private sector, the relevant central and local institutions and the national interest.
The BKPM should also assist investors in overcoming the various obstacles they face in setting up businesses.
"There is no point in having numerous new investment approvals if none of them materialize," he said.
Aburizal set Luthfi a target of cutting the time needed to start up a businesses from 156 days to only 30 days.
Luthfi, a former aide of President Susilo Bambang Yudhoyono during last year's presidential election campaign, was named as BKPM head two weeks ago, replacing Theo F. Toemion.
Theo is under police investigation after he allegedly struck a 14-year-old student referee and quarreled briefly with foreign residents at the Jakarta International School (JIS) during a basketball competition in which Theo's seven-year-old son was playing on April 17.
He did not attend the ceremony, although according to his former staff members, he was at his office during the event.
Luthfi, a former chairman of the Indonesian Entrepreneurs Association (HIPMI), said he would turn the BKPM into an agency that would devote itself to promoting the creation of value-added activities.
"We will invite investment on a door-to-door basis in accordance with the blueprint on the manufacturing sector produced by the Ministry of Industry. That way, we will ensure a more focused effort on facilitating value-added activities in the country," he said.
The government plans to strip away some of the BKPM's powers to issue investment approvals in a bid to attract more foreign investment.
The move is expected to reduce the length of time needed for foreign businesses to start operations here. Until now, the BKPM has been authorized to process all investment permits and certain other licenses related to business activities.
The government has also reduced the status of the BKPM and put it under the coordination of the Ministry of Trade. However, it will continue to directly report to the President.
Trade minister Mari E. Pangestu said the government was pushing for the investment bill to be deliberated this year as it had yet to be listed on the schedule of bills to be debated by the House.
"Considering that improving the investment climate is one of the Cabinet's priorities, we are seeking ways to put the bill on the legislators' schedule for deliberation this year," she said.
Mari said that in general "the bill is founded on the principle of equality of treatment subject to negative lists," and adopted best practice from other countries.
It also provided guarantees against nationalization and expropriation, but even if such things took place there would have to be a compensation, she said. The bill also guaranteed the freedom to repatriate profits, and broadened the definition of investment, she added.