New BKPM role to up investment

The Jakarta Post, Jakarta

The government denied on Wednesday that the newly signed decree centralizing licensing procedures for investment under the auspices of the National Investment Coordinating Board (BKPM) was intended to scrap the power of regional governments.

The move was, instead, aimed at promoting tighter coordination between the BKPM, relevant ministries and local administrations, said Coordinating Minister for the Economy Dorodjatun Kuntjoro- Jakti.

Dorodjatun said all necessary documents would still be assessed and issued by respective local government or relevant ministries, but this time around, it was the BKPM that would be responsible for obtaining the necessary permits.

"All they (investors) have to do is submit a proposal for any investment project to the BKPM, which will seek the required documentation from local governments or relevant ministries," he said, adding that this arrangement by no means indicated that the government had violated the regional autonomy law.

Dorodjatun was referring to a presidential decree signed last week in a bid to alleviate inconvenience for investors who previously had to go from one office to another simply to secure the requisite investment licenses.

However, the move immediately drew protest, with many claiming it to be against the spirit of regional autonomy and decentralization.

Syaukani HR, Kutai Kartanegara regent in East Kalimantan, who chairs the Indonesian Regencies and Municipalities Association (Apkasi), attacked the decree as the latest sign of government arrogance toward the regions and a violation of the regional autonomy law.

Dorodjatun and BKPM chairman Theo F. Toemion dismissed the protest as being caused by simple misunderstanding.

Both insisted that the rule was aimed at boosting flagging investment here -- particularly from foreigners -- which was largely due to the adverse investment climate, with security and political concerns, widespread red tape and confusion at decentralization cited as the main reasons.

Since the crisis, Indonesia has been deprived of investment, which is crucial to the stimulation of productive activities and the generation of high economic growth.