Luthfi takes up BKPM post with new mission

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.