IN INDONESIA MOVING FORWARD “NEW OPPORTUNITIES IN THE EXCITING TIMES AHEAD” Jakarta, 20 November 2019 Saribua Siahaan Directorate of Regional Promotion Facilitation Indonesia Investment Coordinating Board (BKPM)
Globalization in Transition: The Future of Trade & Value Chain 2
In 2018, Global FDI flows dropped by 13.4 % 4
2018: Indonesia’s Investment Realization was growing but FDI was slowing down at -8.9% Indonesia’s Investment Realization 2018 Realization compared 2008 – 2019 (Jan – Jun) with the target: 721.3 693.8 94.3% (Rp. Trillion) 601.7 601 571.5 262 329 494.7 216 179 427.5 284 156 322.6 128 246.7 92 192.3 208.0 174.2 431 76 22 392 385 393 61 339 284 43 299 230 170 171 147 131 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q3 2019 FDI DDI ↑ Y -o-Y 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 FDI -23.10% 12.58% 15.85% 34.99% 29.91% 13.12% 15.79% -1.69% 11.95% -8.99% DDI 96.21% 39.86% 25.36% 21.29% 39.02% 21.83% 14.95% 20.49% 21.33% 25.25% Investment realization in 2018 reached Rp 721,3 Trillion DDI growth reached 25.3% FDI declined -8,8% Factors: political condition (Indonesia’s general election/Pemilu), the trade war which caused investors to “wait and see”; Source: BKPM, 2019 5
Top 10 - Investment Realization in Quarter III 2019 based on Sector Source: BKPM, 2019 7
President Jokowi has stated that for 2020 – 2024, Indonesia will focus on Human Capital Development 1 improve healthcare, education and vocational training, invite global talent for cooperation, improve digital talent, & raise the endowment Fund Infrastructure Development 2 Access toindustrial estate and tourism destination as well as improving logistic performance Regulation Reform 3 Omnibus Law on Labour and Small, Medium, Enterprises 4 Bureaucracy Reform Economic Transformation 5 From natural resources to manufacturing industry and services *) Inauguration of President Joko Widodo and Vice President of Republic Indonesia K.H Ma’ruf Amin , 20 October 2019 8
6 Key Performance Indicators (KPI) of BKPM Improve the Ease of Doing Business Index Accelerate the Investment Realization of big investment Support big investors to make a partnership with local company Ensure the Spread of Quality Investment Investment Promotion focused on targeted sector and countries Increase the domestic direct investment realization, especially the SMEs 9
We are facilitating the 21 projects of potential investment realization accounted for about IDR 708 Trillion that facing challenges Chemical Industry 17 3 Projects Projects 21 Projects Rp 481.5 Trillion Rp 264.3 Trillion Investment facing challenges Investment facing challenges 708,0 Rp Trillion 4 4 2 Big Projects Projects Rp 226.5 Trillion Rp 152.8 Trillion Note: Investment Plan of Big Projects Investment Plan of Big Projects Assumption: 1$ = IDR 14,000 Source: BKPM, 2019 10 10
Negative Investment List 2016: More open to foreign investments 11
Online Single Submission (OSS), an integrated online system with data sharing to improve the ease of doing business 12
Investment Incentive to Strengthen the Quality of Indonesia’s Human Resources and Innovation ( Regulation (PP) No. 45/2019 & MoF Regulation No. 128/2019 ) 13
Investment Incentives: New tax holiday policy 14
18 Group Sectors Eligible to Apply for Tax Holiday 15
Other Investment Incentives 16
Mandate of President Jokowi about investment licensing & fiscal incentives President has assigned tasks to the Chairman of BKPM and affiliated Minister to return all the investment permit to BKPM. BKPM has also been given the authority to determine the Tax allowance and Tax Holiday to investors and to reform its regulations. President Joko Widodo at Cabinet Meeting 11 November 2019 17
Indonesia Investment Promotion Centre (IIPC) Badan Koordinasi Penanaman Modal (BKPM) Indonesia Investment Coordinating Board Jalan Jenderal Gatot Subroto No. 44 Jakarta 12190 - Indonesia t +62 21 525 2008 | f +62 21 525 4945 | e info@bkpm.go.id bkpm .go.id | investindonesia .go.id 25
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