New investment bill to go to House next month: BKPM

Adianto P. Simamora, The Jakarta Post, Jakarta Post

The government said on Wednesday that it would submit a new investment bill to the House of Representatives next month to replace the existing laws on foreign and domestic investments.

"We will submit the new bill to the House for deliberation in February," Chairman of the Investment Coordinating Board (BKPM) Theo F. Toemion told reporters on the sidelines of a hearing with the House Commission V overseeing industry and trade affairs.

The new investment bill will replace the 1967 law on foreign investment and 1968 law on domestic investment.

"Under the proposed draft law, the government will provide equal treatment both to foreign and local investors to boost the country's attractiveness in the eye of foreign investors," Theo said.

Theo admitted that Indonesia had been left far behind compared to its peers in the region in attracting foreign investors, particularly due to the country's political and security problems.

"We must ensure them (investors) that Indonesia is still an attractive place for investment by introducing the new investment law," he said.

Data from BKPM showed that foreign direct investment approvals dropped sharply by 41.5 percent to US$9.02 billion in 2001.

Political and security instability in Indonesia were two of the factors discouraging foreign investors from coming here.

Both local and foreign investors had also repeatedly voiced concern over legal uncertainty.

"I traveled to several countries to learn about their investment policies in attracting more investors," Theo said.

Thailand and China, for example, established an independent investment body to actively attract foreign investors, he said, in addition to various incentives including a tax holiday.

The two countries also set up a "one-stop" service facility to speed up licensing procedures.

Theo said that under the new investment bill, the government would establish such a service center to handle investment licensing with the central government.

"We hope the one-stop service center will also help overcome the problem of overlapping regulations," he said.