Investment in Indonesia

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Investment in Indonesia

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

1

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

2

Implementation of Indonesia Investment Policy

3

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

Related directly to investment 4

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

5

2015-2019 Target

1

To reduce the processing time of national investment permissions to a maximum of 15 working days per type of permissions in 2019.

2

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).

3 4

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 %.

Investasi

FDI and DDI Investment Realization DDI Ratio

Unit

Year 2015

2016

2017

2018

2019

Billion Rupiah

519,5

594,8

678,8

792,5

933,0

%

33,8

35,0

36,3

37,6

38,9

Exchange rate assumption: Rp. 12.000,-/USD

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Pillars of Investment Stregthening Policy

1 The Strengthening of Investment

Improvement of Investment Climate and Business Climate

2 Inclusive Investment Improvement

7

Strategy Improvement of Investment Climate and Business Climate

2

1 Improvement of legal certainty related to the investment and business

Simplification of investment and business permitting procedures in the central and regional

3

Development of investment services, for example by the development of Central One Stop Services (OSS)

Establishment of investment forum

Incentive and investment facilitation

7

6

5

4

Improvement of employment climate to be more condusive

Improvement of fair business competition

8

Strategy Inclusive Investment Improvement

1

Prioritization in investment in sector which process raw natural resources into hugh value-added products, and encourage job creation

2

3

Improving coordination and investment cooperation between government and business community

7 Developing local investment

Increasing the effectiveness of the strategy and investment promotion efforts

Increasing partnership between foreign investor and local SMEs

Increasing investment dissemination to region

6

5

4

8 Developing outward investment

Reduction of negative impact on the national economy because of the domination of foreign investor

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Government Work Plan (RKP) 2017

10

Objective and Policy Direction  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

Objective

Indonesia Rank in EoDB Investment Growth (PMTB) (%) DDI and FDI Realization (Rp Triliun) DDI Contribution (%)

2014 Baseline 120 4,6 463,1 33,7

2015

2016

2017

109 5,1 519,5 33,8

40 5,2 594,8 35

35 6,0-6,6 631,5 36,3

RPJMN Final Target 30 12,1 933,0 38,9

2017 Target in RPJMN : Rp678,8T

Slide

Policy Direction

Simplifying the licensing

Providing investment service/facilitation

Which make it easy for foreign and domestic businessmen to invest and doing business in all around Indonesia Slide

Investment Realization Target for Each Province

Aceh 1,18% 7,46

Total target Rp631,5 Trillion North Sumatera

3,00% 18,95

Riau 3,56% 22,49 Jambi 0,90% 5,68

Kep. Riau 1,54% 9,73

North Kalimantan

0,80% 5,05

Gorontalo 0,04% 0,24 Center Sulawesi

Center West Sumatera 3,00% Kep. Babel West Kalimantan Kalimantan West Kalimantan West Sulawesi 0,43% 18,95 7,30% 0,5% 2,60% 4,60% 2,70 South Sumatera 0,23% 46,10 3,18 16,42 29,05 Southeast Bengkulu 1,46 3,63% Sulawesi South Kalimantan 22,92 0,20% DKI Jakarta South Sulawesi 1,10% 1,24 Lampung 2,70% 2,50% 6.93 10,50% Center Java 17,05 0,80% East Java 15,79 66,31 4,62% 5,05 Banten 12,50% 29,18 7,86% West Java 78,94 East Nusa West Nusa D.I. Yogyakarta 49,64 15,79% Bali Tenggara Tenggara 0,30% 99,68 1,40% 0,40% 1,89 1,70% 8,84 2,53 10,74

North Sulawesi

0,33% 2,07

North Maluku

0,60% 3,79

West Papua

Maluku

0,19% 1,22

0,87% 5,47

Papua 2,89% 18,23

PERCENTAGE

TARGET 2017 (Rp Trilion)

Slide

Priority Programs 1 Improvement on Ease of Doing Business

7

2 Deregulation and Harmonization of Center and Local Investment Licensing

Development of Infrastructure in Strategic Area

Improvement on Investment and Business Climate

6 Improvement on Employment Climate and Good Industrial Relations

3 Development of an Integrated Licensing Services

5

4

Acceleration of Investment Problem Solving Facilitation

Increasing Fair Business Competition

Slide

Ease of Doing Business Priority Activities

Improvement on The Ease of Getting Electricity

Improvement on The Ease of Starting Business

Improvement on The Ease of Enforcing Contract

Improvement on The Ease of Getting Credit

Improvement on The Ease of Paying Taxes

Improvement on Ease of Doing Business Improvement on The Ease of Resolving Insolvency

Improvement on The Ease of Registering Property

Improvement on The Ease of Minority Investor Protection

Improvement on The Ease of Trade Across Border

Improvement on The Ease of Dealing with Construction Permit

Slide

Deregulation and Harmonization of Center and Local Investment Licensing Priority Activities Changing The Center and Local Regulations that Hamper Investment

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

Synchronizing Central and Local Investment Licensing Regulations

Slide

Development of an Integrated Licensing Services Priority Activities Developing The National Licensing System

Development of an Integrated Licensing Services Monitoring Local Integrated Licensing Service (PTSP)

Drafting SOP of licensing and PTSP based on national standard

Slide

Increasing Fair Business Competition Priority Activities Law Enforcement against Anti Fair Business Competition Practices

Increasing Fair Business Competition Preventing The Practice of Unfair Business Competition

Monitoring Business Activities based on Fair Business Competition Mechanism

Slide

Acceleration of Investment Problem Solving Facilitation Priority Activities

Settlement of investment issues complaint

Accelerating of Investment Problem Solving Facilitation

Accelerating in RTRW Making especially in Strategic Area

Slide

Challenges and Issues of Investment in Indonesia

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

No.

10 Indicator of EoDB Rank of Indonesia

2016

2017

Singapura

3

2

ASEAN

2015 2016 2017 120 106

91

1 Starting a business

163 167 151

Malaysia

22

23

2 Dealing with construction permit

110 113 116

Thailand

46

46

3 Registering property

131 123 118

Brunei

97

72

Vietnam

91

82

Indonesia

106

91

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 10 Resolving Insolvency

170 171 166 73 74 76

Source : World Bank, 2016

Indonesia's rank rose from 106 to 91. However, it is still lower compared to other ASEAN countries.

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Indonesia’s Rank in Global Competitiveness Index (GCI) Index Pilar GCI Indonesia

Country Swiss AS Singapore Japan Malaysia China Thailand Indonesia India Brazil Rusia Vietnam Philippines

Ranking 2015-2016 2016-2017 1 1 3 3 2 2 6 8 18 25 28 28 32 34 37 41 55 39 75 81 45 43 56 60 47 57

4.00 3.94

12th pillar: Innovation

4.30 4.35

11th pillar: Business sophistication

5.70 5.74

10th pillar: Market size 3.50 3.49

9th pillar: Technological readiness

4.30 4.19

8th pillar: Financial market development 3.80 3.74

7th pillar: Labor market efficiency

4.40 4.43

6th pillar: Goods market efficiency

4.50 4.45

5th pillar: Higher education and training 4th pillar: Health and primary education

5.30 5.59

3rd pillar: Macroeconomic environment

5.50 5.5 4.20 4.19

2nd pillar: Infrastructure

4.10 4.09

1st pillar: Institutions 0

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Indeks 2016-2017

• •

2

3

4

5

6

7

Sumber : World Economic Forum, 2016

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 22

Indonesia as an attractive destination for foreign investors 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)

Source: The Economist Corporate Network in Asia Business Outlook Survey (2016)

23

Issues of Investment in Indonesia

Lack of infrastructure such as roads, ports, communications, and energy such as electricity

Problems of land, RTRW

Less conducive employment climate such as lack of skilled manpower to meet the needs of industry and wage issues.

Not efficient procedure in making investment and business

Indonesia’s ranking in EoDB who have not reached the target

Lack of certainty of law / regulation, many overlapping regulations

The distribution of investment is still in Java and Sumatra

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Priority Sectors in 2017

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Promising sectors for investment.. 35 GW Power Generation

Food Estate

24 Seaports

Corn Plantation

Infrastructure

Agriculture

Cattle Strategic Tourism Area MICE

Textile Food & Beverages

Industry

Tourism

Electronics

Shipbuilding

Automotive

Fishing Industry

others

Maritime

Cold Storage Source: BKPM

In RKP 2017, BKPM role is to support the export-oriented sector that creates jobs and labor-intensive. 26

Attachment

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Kegiatan Prioritas Peningkatan Kemudahan Berusaha No 1

Kegiatan Prioritas Program peningkatan kemudahan berusaha

Sasaran

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 Slide

Kegiatan Prioritas Pelaksanaan Deregulasi dan Harmonisasi Regulasi Perizinan Investasi Pusat dan Daerah No 2

Kegiatan Prioritas Sasaran Program Pelaksanaan deregulasi dan harmonisasi regulasi perizinan investasi pusat dan daerah

2.1

Perubahan regulasi pusat dan daerah yang menghambat investasi Pelaksanaan harmonisasi, sinkronisasi peraturan perizinan investasi tingkat pusat dan daerah

2.2

  

  2.3

Penyederhanaan perizinan investasi



 

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

Slide

Kegiatan Prioritas Pengembangan Layanan Perizinan Terpadu No 3

Kegiatan Prioritas Program Pengembangan Layanan Perizinan Terpadu

3.1

Pengembangan sistem perizinan nasional



   3.2 3.3

Penyusunan SOP perizinan dan SOP PTSP sesuai  standar nasional Pemantauan PTSP di daerah 



Sasaran

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 Tersedianya satu paket SOP pelayanan persetujuan, perizinan dan fasilitas penanaman modal 561 PTSP penanaman modal di daerah yang dipantau penyelenggaraannya 51 kabupaten/kota yang memiliki PTSP yang prima Slide

Kegiatan Prioritas Peningkatan Persaingan Usaha yang Sehat No 4

Kegiatan Prioritas Program Peningkatan Persaingan Usaha Yang Sehat

4.1

Penegakan hukum terhadap praktek anti persaingan usaha yang sehat

   

4.2

4.3

Pengawasan kegiatan usaha yang sesuai dengan  mekanisme persaingan usaha yang sehat  Pencegahan terhadap praktek persaingan usaha  yang tidak sehat 

Sasaran 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 Terlaksananya 20 pemetaan struktur pasar dan pengawasan perilaku pelaku usaha 1 laporan pengawasan kemitraan koperasi dan UMKM Tersedianya 106 penilaian merger dan akuisisi Tersusunnya 11 saran dan pertimbangan terhadap kebijakan sektor strategis

Slide

Kegiatan Prioritas Percepatan Fasilitasi Penyelesaian Masalah Investasi No 5

Kegiatan Prioritas Program Percepatan Fasilitasi Penyelesaian Masalah Investasi

5.2

Percepatan penyusunan RTRW dan RDTR khususnya di kawasan strategis



   5.3

Penyelesaian pengaduan masalah investasi



 

Sasaran

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 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 Terselesaikannya 2 permasalahan investasi bidang infrastruktur Fasilitas penyelesaian permasalahan aset terkait investasi di 3 provinsi

Pembenahan Iklim Ketenagakerjaan dan Hubungan Industrial yang Harmonis  Lihat program prioritas antar kelompok pendapatan Pengembangan Infrastruktur Pendukung Kawasan Strategis  Lihat Program Prioritas Konektivitas Slide