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NEW UPDATES Asean Affairs  11 June 2015  

BKPM aims for ‘better score’ on investment

Indonesia:The Investment Coordinating Board (BKPM) says it hopes government efforts in facilitating business by simplifying permit issuance can help the country win recognition from global business players.

The investment board, which serves as the coordinator for all state institutions in dealing with foreign and domestic investments, plans to boost coordination in a bid to improve the country’s indicators in the World Bank’s (WB) 2015 Ease of Doing Business survey, according to BKPM head Franky Sibarani.

Indonesia, Southeast Asia’s biggest economy, was ranked 114th out of 189 nations in the 2014 Ease of Doing Business report released in October last year — a consistent increase since 2013 when the country stood at 129th.

“We will continue coordinating with each ministry and institution as well as regional administrations to solve problems hampering the country in improving its level of doing business,” Franky said Tuesday.

Although Indonesia advanced its position in the last four years, Franky said its current rank remained far lower than its neighbors, such as Malaysia at 18th and the Philippines at 95th.

BKPM investment climate development deputy Farah Ratnadewi Indriani said the previous administration of Susilo Bambang Yudhoyono had stated in its 2010-2014 National Mid-Term Development Plan (RPJMN) that it aimed for 75th position in the WB survey, while pointing out that the current government had not set a specific target in its 2015-2019 midterm plan.

However, Farah said President Joko “Jokowi” Widodo had expressed expectations that Indonesia, within his term, should be one of the best countries in Asia in terms of ease of doing business.

“All state institutions need to have a similar paradigm to be committed to achieving the target, even though it is not easy because we [as a country] have a lot of regions and a vast territory. We can learn from Malaysia, which managed to stand in 18th rank last year when it was previously around 50th, because it set a high target of getting onto the top-five list in the survey and all of its state institutions were committed in improving all of its indicators,” Farah said.

The annual survey uses 10 indicators that illustrate the level of ease of doing business for small and medium enterprises (SME) in 189 countries, including Indonesia, based on interviews with approximately 40 global law firms as its respondents.

The 10 indicators are setting up a business; dealing with construction permits; getting electricity; registering property; paying taxes; trading across borders; getting credit; protecting minority investors; enforcing contracts and resolving insolvency.

In its 2014 survey, the WB put Indonesia in 155th place in terms of setting up a business and 153rd place in the category of dealing with construction permits.

However, Farah said the survey, which has an annual assessment period from October to May the following year, listed a number of improvements Indonesia had made in the 10 indicators, including in terms of setting up a business, getting electricity and paying taxes.

In terms of setting up a business, Farah said the BKPM’s One-Stop Integrated Services (PTSP), launched in January this year, were expected to help boost Indonesia’s position, citing that “the total procedures needed to start a business have been cut to seven from 10, while days reduced to 9.2 from 52.5 days”.

“Procedures in terms of getting electricity have also shortened from five to four items and days reduced to 35 from 94. Meanwhile, the indicator of paying taxes and insurance has also improved because of the government’s implementation of the national insurance scheme.”

Farah added that ongoing reform would be difficult to include in the 2015 survey, which ended in May and will be published in October.

“We are planning to create our own regional survey as a benchmark for every region in terms of doing business,” Farah added.

Indonesia is aiming for a total of Rp 519.5 trillion in realized foreign and domestic direct investment this year.

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