Investment in Indonesia

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Investment in Indonesia

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Directorate of Trade, Investment, and International Economic Cooperation Ministry of National Development Planning/Bappenas

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Outline

Implementation of Indonesia Investment Policy

National Medium-term Development Plan (RPJMN) 2015-2019 & Government

Work Plan (RKP) 2017

Challenges and Issues of Investment in Indonesia

Priority Sectors in 2017

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Economic Policy Packages to Improve Indonesia Competitiveness

Stimulus Package I: 9 Sep 2015

 Boost the competitiveness of national industry

 Accelerate Strategic National Pojects  Boost Low Income Housing

Stimulus Package Ii: 29 Sep 2015

 3 Hours Investment Service  Tax Incentives

 Integrated Logistiscs Facilities

Stimulus Package III: 7 Oct 2015

 Lower Fuel And Electricity Prices

 Land Permit Simplification for Investment Activities

 Broadening of Small Business Credit Recipients

Stimulus Package IV: 15 Oct 2015

 Ease and Affordability of Small Business Credit

 Increasing Welfare of Workers

Stimulus Package V: 23 Oct 2015

 Lower Assets RevaluationTax  Eliminating Double Taxation for real

estates, property, and infrastructure

Stimulus Package VI: 5 Nov 2015

 Propel Rural Economies through Development in Special Economic Zones (SEZs)

 Sustainable and Equitable Water Supply to the community

 Simplifying Import Licensing for Pharmaceutical

Stimulus Package VII: 4 Dec 2015

 Acceleration of Land Certification

 Tax Incentive for Labor Intensive Industry

Stimulus Package VIII: 21 Dec 2015

 One Map Policy  Refinery Construction

 Incentive for Aircraft Maintanance Companies

Stimulus Package IX: 5 Nov 2015

 Acceleration of Electricity Infrastructure Development

 Meat Price Stabilization Meat  Improvement of Logistics Sector

Stimulus Package X: 11 Feb 2016

 Easing of Investment Restrictions

Stimulus Package XI: 29 Mar 2016

 Export-oriented People’s Business Credit (KURBE)

 Real Estate Investment Trust (REITs)  Risk Management for Expediting Flows of

Goods in Ports (Indonesia Single Risk Management/ISRM

 Further Development of the Pharmaceutical and Medical Equipments Industries

Stimulus Package XII: 28 April 2016

 Simplification of Licensing, Procedures, Duration, and Cost of Starting Business in Indonesia

Stimulus Package XIII: 24 August 2016

 Housing for Low Income Communities Issuing Government Regulation (PP) to simplify the number and timing of

licensing needed to build a house for low income communities

Stimulus Package IV: 11 Nov 2016

 E-commerce Road Map

Facilitating e-commerce start-up in doing business

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2015-2019 Target

To increase investment growth or growth of gross fixed capital (GFCF) to 12.1 % in 2019.

To increase domestic and foreign investment to Rp 993 billion in 2019 with a contribution

of domestic investment increasing to 38.9 %.

To reduce time and number of procedures to start a business to 7 working days and 5

procedures in 2019, as part of efforts to improve Indonesia's rating in the Ease of Doing

Business (EoDB).

To reduce the processing time of national investment permissions to a maximum of 15

working days per type of permissions in 2019.

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Investasi Unit Year

2015 2016 2017 2018 2019

FDI and DDI Investment Realization

Billion

Rupiah 519,5 594,8 678,8 792,5 933,0 DDI Ratio % 33,8 35,0 36,3 37,6 38,9

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The Strengthening of

Investment

Improvement of

Investment Climate

and Business Climate

Inclusive Investment

Improvement

Pillars of Investment Stregthening Policy

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Strategy

Improvement of Investment Climate and Business Climate

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Improvement of legal

certainty related to

the investment and

business

Simplification of

investment and

business permitting

procedures in the

central and regional

Development of

investment services,

for example by the

development of

Central One Stop

Services (OSS)

Incentive and

investment facilitation

Establishment of

investment forum

Improvement of

employment climate

to be more condusive

Improvement of fair

business competition

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Strategy

Inclusive Investment Improvement

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Prioritization in investment in sector

which process raw natural resources into

hugh value-added products, and encourage

job creation

Increasing investment dissemination to region

Increasing partnership between foreign investor and local SMEs

Increasing the effectiveness of the strategy and investment

promotion efforts Improving coordination and investment cooperation between government and business community Developing local investment Developing outward investment Reduction of negative impact on the national economy because of the

domination of foreign investor

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Objective and Policy Direction

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Objective

2014

2015

2016

2017

RPJMN Final

Target

Baseline

Indonesia Rank in EoDB

120

109

40

35

30 Investment Growth (PMTB) (%)

4,6

5,1

5,2

6,0-6,6

12,1

DDI and FDI Realization (Rp Triliun)

463,1

519,5

594,8

631,5

933,0

DDI Contribution (%)

33,7

33,8

35 36,3

38,9

 In 2017, investment still being pushed as an economic drivers to creates more jobs and

encourages Indonesian economy to be more productive

 In order to achieve the investment target as an economic drivers in Indonesia, improvement

on investment and business climate are prerequisite

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Providing investment

service/facilitation

Simplifying the licensing

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Policy Direction

Which make it easy for foreign and domestic businessmen to

invest and doing business in all around Indonesia

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Investment Realization Target for Each Province

Aceh 1,18% 7,46 Riau 3,56% 22,49 Kep. Riau1,54% 9,73 Kep. Babel 0,5% 3,18 North Kalimantan 0,80% 5,05 South Kalimantan 2,70% 17,05 North Sulawesi 0,33% 2,07 North Maluku 0,60% 3,79 DKI Jakarta 10,50% 66,31 Bali 1,40% 8,84 West Papua 0,87% 5,47 Papua 2,89% 18,23 South Sulawesi 2,50% 15,79 North Sumatera 3,00% 18,95 West Kalimantan 4,60% 29,05 Center Kalimantan 2,60% 16,42 Gorontalo 0,04% 0,24 South Sumatera 3,63% 22,92 Southeast Sulawesi 1,10% 6.93 Bengkulu 0,20% 1,24 Banten 7,86% 49,64 West Java_15,79% 99,68 D.I. Yogyakarta 0,30% 1,89 East Java 12,50% 78,94 Center Java 4,62% 29,18 West Kalimantan 7,30% 46,10 Maluku 0,19% 1,22 West Sulawesi 0,23% 1,46 West Nusa Tenggara 1,70% 10,74 East Nusa Tenggara 0,40% 2,53 Lampung 0,80% 5,05 Jambi 0,90% 5,68 West Sumatera 0,43% 2,70 Center Sulawesi 3,00% 18,95 PERCENTAGE TARGET 2017 (Rp Trilion)

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Priority Programs

Improvement on Investment and Business Climate Improvement on Ease of Doing Business Deregulation and Harmonization of Center and Local

Investment Licensing Development of an Integrated Licensing Services Increasing Fair Business Competition Acceleration of Investment Problem Solving Facilitation Improvement on Employment Climate and Good

Industrial Relations Development of Infrastructure in Strategic Area 1 2 3 4 5 6 7

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Improvement

on Ease of

Doing Business

Improvement on The Ease of Starting Business Improvement on The Ease of Enforcing Contract Improvement on The Ease of Paying Taxes Improvement on The Ease of Registering Property Improvement on The Ease of Dealing with Construction Permit Improvement on The Ease of Trade Across Border Improvement on The Ease of Minority Investor Protection Improvement on The Ease of Resolving Insolvency Improvement on The Ease of Getting Credit Improvement on The Ease of Getting Electricity Slide - 15

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Deregulation and Harmonization of Center and Local Investment Licensing

Priority Activities

Deregulation and Harmonization of Investment Licensing Regulation In Center And Local Government Changing The Center and Local

Regulations that Hamper Investment

Synchronizing Central and Local

Investment Licensing Regulations Simplifying The Investment Licensing

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Development of an Integrated Licensing Services Priority Activities

Development

of an

Integrated

Licensing

Services

Developing The National Licensing System Drafting SOP of licensing and PTSP based on national standard Monitoring Local Integrated Licensing Service (PTSP)

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Increasing Fair Business Competition Priority Activities

Increasing Fair

Business

Competition

Law Enforcement against Anti Fair

Business Competition Practices Monitoring Business Activities based on Fair Business Competition Mechanism Preventing The Practice of Unfair Business Competition

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Acceleration of Investment Problem Solving Facilitation

Priority Activities

Accelerating

of Investment

Problem

Solving

Facilitation

Accelerating in RTRW Making especially in Strategic Area Settlement of investment issues complaint

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Indonesia’S Ranking in EoDB (Ease of Doing Business)

Source : World Bank, 2016

Indonesia's rank rose from 106 to 91.

However, it is still lower compared to other

ASEAN countries.

No. 10 Indicator of EoDB 2015 2016 2017

Rank of Indonesia 120 106 91

1 Starting a business 163 167 151 2 Dealing with construction permit 110 113 116 3 Registering property 131 123 118 4 Getting electricity 45 61 49 5 Paying taxes 160 115 104 6 Trading across boders 104 113 108 7 Getting credit 71 70 62 8 Protecting minority investor 87 69 70 9 Enforcing contract 170 171 166 10 Resolving Insolvency 73 74 76 ASEAN 2016 2017 Singapura 3 2 Malaysia 22 23 Thailand 46 46 Brunei 97 72 Vietnam 91 82 Indonesia 106 91

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Indonesia’s Rank in Global Competitiveness Index (GCI)

Country Ranking 2015-2016 2016-2017 Swiss 1 1 AS 3 3 Singapore 2 2 Japan 6 8 Malaysia 18 25 China 28 28 Thailand 32 34 Indonesia 37 41 India 55 39 Brazil 75 81 Rusia 45 43 Vietnam 56 60 Philippines 47 57 4.09 4.19 5.5 5.59 4.45 4.43 3.74 4.19 3.49 5.74 4.35 3.94 4.10 4.20 5.50 5.30 4.50 4.40 3.80 4.30 3.50 5.70 4.30 4.00 0 1 2 3 4 5 6 7 1st pillar: Institutions 2nd pillar: Infrastructure 3rd pillar: Macroeconomic environment 4th pillar: Health and primary education 5th pillar: Higher education and training 6th pillar: Goods market efficiency 7th pillar: Labor market efficiency 8th pillar: Financial market development 9th pillar: Technological readiness 10th pillar: Market size 11th pillar: Business sophistication 12th pillar: Innovation

Index Pilar GCI Indonesia

Indeks 2016-2017 Indeks 2015-2016

• Indonesia’s ranking is still below Singapore, Malaysia, and Thailand's

• Indonesia has the highest index for the pillars of market size and the macroeconomic environment

The lowest index is on the pillars of technological readiness and labor market efficiency

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Multinational Enterprises’ top prospective host economies for 2016-2018 (per cent of executives responding)

Source: UNCTAD Business Survey in World Investment Report (2016)

How do you expect youur firms investment in key Asian territories to change in 2016? (respondent surveyed)

Indonesia as an attractive destination for foreign investors

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Lack of infrastructure such as roads, ports,

communications, and energy such as electricity

Problems of land, RTRW

Not efficient procedure in making investment and

business

Lack of certainty of law / regulation, many overlapping regulations

Less conducive employment climate such as lack of skilled manpower to meet

the needs of industry and wage issues.

Indonesia’s ranking in EoDB who have not reached the

target

The distribution of investment is still in Java

and Sumatra

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26 Food Estate Corn Plantation Cattle 35 GW Power Generation 24 Seaports Textile

Food & Beverages Electronics Automotive others Strategic Tourism Area MICE Shipbuilding Fishing Industry Cold Storage

Promising sectors for investment..

Source: BKPM

In RKP 2017, BKPM role is to support the export-oriented sector that creates jobs and labor-intensive.

Agriculture

Infrastructure

Tourism

Maritime

Industry

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No Kegiatan Prioritas Sasaran

1 Program peningkatan kemudahan berusaha

1.1 Perbaikan kemudahan memulai usaha  Jumlah waktu memulai usaha 5 hari, 5 prosedur dan biaya Rp. 1.200.000,- (PNBP)

 Tersedianya prosedur perizinan usaha perdagangan yang disederhanakan menjadi 1 prosedur  Jumlah penerbitan SK PT Badan Hukum Sosial berdasarkan permohonan sebanyak 150.000 SK

1.2 Perbaikan kemudahan penegakan kontrak  Jumlah waktu penegakan kontrak menjadi 38 hari, 11 prosedur dan biaya pendaftaran penegakan kontrak sebesar kurang dari

Rp.1.000.000,-1.3 Perbaikan kemudahan pembayaran pajak  Jumlah waktu kemudahan pembayaran pajak menjadi 166 jam per tahun, prosedur pembayaran (online) menjadi 31 kali

1.4 Perbaikan kemudahan pendaftaran Hak Atas Tanah (HGB)  Jumlah waktu Pendaftaran Hak Atas Tanah(HGB) selama 5 hari, prosedur pendaftaran sebanyak 3 prosedur dan biaya pendaftaran hak atas tanah sebesar 5 persen dari nilai properti

1.5 Perbaikan kemudahan mendirikan bangunan  Jumlah waktu mendirikan bangunan 35 hari, prosedur mendirikan bangunan 5 prosedur, dan persentase biaya terhadap nilai bangunan 11 persen

1.6 Perbaikan kemudahan perdagangan lintas negara  Waktu impor (document compliance) 120 jam dan waktu ekspor (document compliance) 72 jam

1.7 Perbaikan kemudahan terhadap investor minoritas  Indeks konflik kepentingan regulasi menjadi 8 (dari 10), indeks tata kelola pemangku kepentingan menjadi 7 (dari 10) dan indeks kekuatan perlindungan investor menjadi 7,5 (dari 10)

1.8 Perbaikan kemudahan penyelesaian perkara kepailitan  Jumlah waktu penyelesaian perkara kepailitan menjadi 274 hari, dan 7 prosedur penyelesaian

1.9 Perbaikan kemudahan peningkatan akses perkreditan  Indeks kedalaman kredit 8 dan cakupan informasi kredit LPIP 50%

 Jumlah penerbitan sertifikat jaminan fidusia berdasar permohonan sebanyak 5.000 sertifikat

1.10 Perbaikan kemudahan penyambungan listrik  Jumlah waktu penyambungan listrik 25 hari, prosedur penyambungan 4 prosedur , dan biaya penyambungan sebesar 116 persen dari income per capita

Kegiatan Prioritas

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2 Program Pelaksanaan deregulasi dan harmonisasi regulasi perizinan investasi pusat dan daerah

2.1 Perubahan regulasi pusat dan daerah yang menghambat investasi

 1000 pembatalan perda dan perkada yang menghambat investasi dan perizinan yang diharmonisasi

2.2 Pelaksanaan harmonisasi, sinkronisasi

peraturan perizinan investasi tingkat pusat dan daerah

 20 persen daerah yang melakukan deregulasi dan harmonisasi terhadap peraturan pajak daerah dan retribusi

 80 persen rancangan peraturan perundang-undangan bidang perekonomian yang diharmonisasikan

 Rekomendasi simplifikasi peraturan perizinan dan pelaporan di 5 sektor prioritas (berorientasi ekspor dan padat karya)

 Rumusan rekomendasi peraturan perizinan tingkat daerah yang diharmonisasi dan disinkronisasi untuk 34 provinsi

2.3 Penyederhanaan perizinan investasi  100% implementasi rekomendasi kebijakan peningkatan daya saing investasi untuk meningkatkan peringkat indeks Ease of Doing Business < 40 yang ditindaklanjuti

 Rumusan kebijakan penyederhanaan peraturan dan bisnis proses perizinan di Pusat dan di daerah

 100% rekomendasi kebijakan Timnas PEPI dalam rangka percepatan fasilitasi penyelesaian masalah PEPI yang ditindaklanjuti

Kegiatan Prioritas

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3 Program Pengembangan Layanan Perizinan Terpadu

3.1 Pengembangan sistem perizinan nasional  Tersedianya 1 paket pengembangan sistem aplikasi perizinan dan non perizinan yang dilimpahkan kepada PTSP Pusat, Provinsi dan Kabupaten/Kota, serta KEK dan FTZ

 50 PTSP Provinsi dan Kabupaten/Kota serta KEK dan FTZ yang terhubung dengan SPIPISE dan Tracking System

 Pengadaan 5 unit server dan storage serta 1 paket annual technical support (ATS) software

 Pengembangan sistem informasi kewajiban kemitraan PMA/PMDN dengan UMKM

3.2 Penyusunan SOP perizinan dan SOP PTSP sesuai standar nasional

 Tersedianya satu paket SOP pelayanan persetujuan, perizinan dan fasilitas penanaman modal

3.3 Pemantauan PTSP di daerah  561 PTSP penanaman modal di daerah yang dipantau penyelenggaraannya

 51 kabupaten/kota yang memiliki PTSP yang prima

Kegiatan Prioritas

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4 Program Peningkatan Persaingan Usaha Yang Sehat

4.1 Penegakan hukum terhadap praktek anti persaingan usaha yang sehat

 56% putusan KPPU yang dikuatkan pada tingkat Pengadilan Negeri dan Mahkamah Agung sampai dengan tahun berjalan

 Meningkatnya kualitas dan kuantitas penanganan perkara persaingan usaha

 Meningkatnya kualitas dan kuantitas pemberkasan, litigasi, dan eksekusi perkara persaingan usaha

 Terlaksananya 3 pengawasan langsung (inspeksi) terkait pelaksanaan kerjasama kemitraan KUMKM

4.2 Pengawasan kegiatan usaha yang sesuai dengan mekanisme persaingan usaha yang sehat

 Terlaksananya 20 pemetaan struktur pasar dan pengawasan perilaku pelaku usaha

 1 laporan pengawasan kemitraan koperasi dan UMKM

4.3 Pencegahan terhadap praktek persaingan usaha yang tidak sehat

 Tersedianya 106 penilaian merger dan akuisisi

 Tersusunnya 11 saran dan pertimbangan terhadap kebijakan sektor strategis

Kegiatan Prioritas

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5 Program Percepatan Fasilitasi Penyelesaian Masalah Investasi

5.2 Percepatan penyusunan RTRW dan RDTR khususnya di kawasan strategis

 Terlaksananya bimbingan teknis kepada pemerintah daerah dalam penyusunan/peninjauan kembali RTRW dan penyusunan RDTR di 8 KEK

 Tersusunnya materi teknis RDTR kabupaten/kota di sekitar 5 KEK

 Terlaksananya pembinaan bimbingan teknis penyusunan RDTR di sekitar 14 kawasan industri prioritas

 Tersusunnya materi teknis RDTR kabupaten/kota di sekitar 3 kawasan industri prioritas

5.3 Penyelesaian pengaduan masalah investasi

 17 Perusahaan yang difasilitasi penyelesaian masalah penanaman modal di wilayah I,27 perusahaan di wilayah II, 16 perusahaan di wilayah III dan 24 perusahaan di wilayah IV