New BKPM head to focus on expediting licensing system

Vincent Lingga, The Jakarta Post, Yogyakarta | Wed, 11/25/2009 9:34 AM

“I will give you my name card with an email address so that you can email me your problem, and I will see to it that the matter you raised is rectified.”

That was how Gita Wirjawan, the new chief of the Investment Coordinating Board (BKPM), addressed businessmen at the Indonesia-Australia Business Council conference Tuesday who complained about arduous investment licensing procedures and red tape at the ministry of justice and basic human rights.

Gita, formerly an investment banker and private-equity fund manager, said he was determined to develop a truly one-stop licensing center at BKPM, something even Soeharto failed to accomplish under his 32 years of authoritarian administration.

He realized his uphill task as the salesman of the Indonesian investment climate because most of the factors which determine the quality of the country as the place of investment lie beyond his jurisdiction.

“Expediting the licensing system should be the start because I was shocked to find that in the Easing-of-Doing Business Ranking of 178 countries surveyed annually by the IFC, Indonesia this year ranked 122nd, even behind Rwanda.”

Therefore, Gita added, he had embarked on cooperation and coordination with more than 15 other ministries in launching concerted efforts to woo investment.

“I also have started communications and cooperation with regional investment coordinating boards and have identified what I call potential regional champions as the target for investment promotion.”

He is optimistic about improving Indonesia’s rating in the IFC Ease of Doing Business ranking to 60-70th within two years.

“And we need at least about US$200 billion in foreign and domestic investment each year to generate an economic growth rate of 6 to 6.5 percent.”

According to Gita, Indonesia is now riding on the back of a fantastic (period) of economic and political stability as a result of President Susilo Bambang Yudhoyono’s re-election last July.

“As Indonesia is richly blessed with a wide variety of natural resources and the majority of its population is young, our country should be among the most favorite places for investment.”

Next on the government’s priority program is the adaptation of the labor regulations which have long been complained about by investors as too rigid and counterproductive to labor-intensive businesses, Gita said.

“The government also will straighten out the procedures for land acquisition for infrastructure such as roads. Investors simply require clarity and legal certainty that there is a cap on the price of the land they will acquire,” he pointed out.

Vice Minister of Trade Mahendra Siregar, who also addressed the two-day conference which ended Tuesday, said the national single window (NSW) system for clearance of shipments and goods would be fully operational at major ports next year.

The NSW is a clearance system enabling a single submission of information and data, single and simultaneous processing of data, and a single point of decision-making via close collaboration among line ministries and other parties involved in the customs clearance process.

Sound too big a promise?

“Given the way this Cabinet works, we are optimistic about achieving our targets. All ministries are directly monitored by the Presidential Unit for the Supervision and Control of Development [UKP3],” Siregar said.

UKP3, headed by Kuntoro Magkusubroto, a well experienced and highly capable technocrat, is the ears, eyes and hands of the President, working as a trouble-shooter, and Mr. Fixer.

Gita is similarly bullish about achieving the target for his investment promotion, pointing out that “with an annual economic growth of 6-6.5 percent a year, we will be able to increase the size of our economy from $550 billion now to $900-950 billion within five years.”

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