Transcript July09 Taipei - WakilBKPM

UPDATE ON INVESTMENT POLICY
AND OPPORTUNITY IN INDONESIA
BY
ACHMAD KURNIADI
DEPUTY CHAIRMAN FOR INVESTMENT COOPERATION
THE INVESTMENT COORDINATING BOARD
(BKPM)
Distinguished Guests, Ladies and Gentlemen,
I am greatly pleased and honored to be here today in The
Business Forum Seminar, Economic and Trade Mission
of the Ministry of Fishery and Maritime to Taiwan.
First of all, I would like to convey the message of our
Chairman of the Indonesian Investment Coordinating
Board that he would like to send his sincerest gratitude
to Indonesia’s closest business partner, Taiwan, today.
However, I would also like to address my sincerest
appreciation of the organizing committee, particularly the
Indonesian Economic and Trade Office to Taipei, through
this effort, the cooperation between Indonesia and
Taiwan may regain a higher value of what we have been
pursuing for many years.
Ladies and Gentlemen,
Indonesia and Taiwan have enjoyed regional
relationship and cooperation for many years –
such strategic partnerships. Many progress and
development were made. Positive measures are
taken by the cooperation stakeholders. The
scope of cooperation have been conducted in a
broader ways of development dimensions in
which, we consider and realize the imperative
and importance of Foreign Direct Investment
(FDI) flows into the countries.
Distinguished Participants,
I may touch a bit of Indonesian economy progress and tracks as the
key issues of proper example of how a pluralistic country develop its
economy in lieu of investment as the economic engine of
development growth.
With respect to the archipelagic country-characteristics of which a 240
million people with more than 300 languages and dialect, inhabited
not many of the all 17,500 islands spreading over the 5.8 million
sq.km, the macroeconomic indicators development achieve a
promising condition, if I may present you several - recorded by more
than 4.5% GDP growth for the last 2009, foreign reserve of more
than US$ 60 billion, Central Bank interest rate at a level of 5%, the
inflation rate was maintained below two digits. The robust
investment plan of both foreign and domestic spurring the country is
facilitated by a better investment climate created by the probusiness, pro growth, pro job creation and pro poor government
attitude as well. In addition, our committed government was due to
the zero tolerance of corruption battle and perpetual reform of
government bureaucracies may arise strong momentum of
economic revival.
Ladies and Gentlemen,
I may brief you on the Taiwanese investment performance
for the period of 1 January 2005 – 31 December 2009
that Taiwan investment (PMA) implemented in Indonesia
was 171 projects with the value of US$ 682.3 million.
The leading business sectors of these investments
comprise of Trade & reparation (US$ 20.9 million, 58
projects) non metal mineral industry; basic metal, metal
goods, machinery & electronics (US$ 53.9 million, 25
projects); Textile industry (US$ 26.3 million, 17 projects),
Transportation & vehicles (US$ 28.4 million, 14 projects)
and Food Industry (US$ 26.9 million, 9 projects) are the
5 biggest leading sectors. The favorable regions depict
West Java province, East Java province, Banten
province, DKI Jakarta province and East Kalimantan
Province as the leading location of Taiwanese
investment.
Ladies and Gentlemen,
I would like to brief you about several progress of the
Government of Indonesia measures in creating a better
investment climate, as follows: the New Investment Law
No. 25 Year 2007 that is enacted on last May 2007. The
features of this law are among others: equal treatment
between foreign and domestic shareholdings, no
minimum capital requirement, free to repatriate
investment & profit, legal guarantee, dispute settlement
choices, improved investment services. To support the
value of our New Investment Law, the Government
provides incentives facilities like exemptions or
deduction of income tax (fiscal incentives), 95 years for
cultivation rights, 80 years for building rights, 70 years of
land usage rights and immigration facilities as well.
Under the Government Regulation No. 1 Year
2007 jo 62 Year 2008, the investors may also
enjoy income tax facilities for certain business
sectors and or certain locations. Investors may
apply for significant incentives as they urgently
need to be more competitive through a strictly
evaluation by related interdepartmental
assessment team. This government regulation is
followed by Ministry of Finance Decree No.
16/PMK.03/2007 concerning the technical
guidance of PP No. 1 Year 2007; and the
Facilities granted procedures by Directorate
General Taxation regulation No. PER67/PJ./2007.
In addition, Special Economic Zones
(Kawasan Ekonomi Khusus/KEK) policy
and regulation was launched presently to
attract many more investment in several
regions. The Zones will provide maximum
incentives schemes in addition to the
prevailing incentives scheme provided
before (PP No. 1 Year 2007/PP No. 62
Year 2008). Furthermore, PERKA BKPM
no 11, 12, 13 Year 2010 would reinstate
the strong willingness of the Government
of Indonesia to facilitate investors need
and services.
The balance of public interests versus private
sectors or even wider scope of development
dimension is stately incorporated into the recent
Government Regulation No. 77 Year 2007 jo. No.
111 Year 2007 concerning the Negative List for
Investment. The list restricts several sectors
such as the defense equipments,
pollution/environmental damages, broadcasting,
transportation and natural resources.
Nonetheless, the list is dedicated not only to
protect the public interests and state, but also to
properly manage the investment in pursuit of
prosperity to all development stakeholders.
Thus, all the key issues I have mentioned in developing
stronger framework of economic engine namely direct
investment or even, FDI in particular, may be expected
to have a substantial impact upon the national
development within the near future as the momentum of
socio-political stability is steady set along with the
improved democratic state systems. In addition, to
facilitate more foreign investment, the government has
been developing infrastructure facilities throughout
Indonesia provinces. The accelerated project
developments are among others: electricity capacity
development, toll roads, sea and airports construction.
The progress of these projects may gain its momentum
since this 2010 and ahead.
Ladies and Gentlemen,
Since Taiwan and Indonesia have been doing
much together, I just like to remind the business
investment opportunities in accordance with our
economic resources and conditions, namely;
refinery and petrochemical, primary commodities
(including fishery & maritime products), iron,
steel and specialized steel, telecommunication,
agro-based manufacturing industry such as
crude palm oil processing, cocoa, metal-based
processing, automotives and vehicle & its
supporting industries, electronics, and tourisms.
Ladies and Gentlemen,
In respect to boost the economic cooperation of IndonesiaTaiwan, I am confident to recommend greater business
and investment flows between Indonesia- Taiwan, be
enhanced by increasing frequencies of businessinvestment mission of which, shall be facilitated and
supported by both sides. The more we or the economic
stakeholders meet, the more business alliances could be
arranged and the more positive impacts may provide
promising prosperity of our nations’ region. Globalization
of production process and liberalization schemes in
many areas of economy, are a matter of tools that how
we have to take advantages for mutual business ties and
greater development contributions.
Last but not least,
We look forward to having an
implementation phases soon as you have
committed to investing in Indonesia, and
we would like to help and facilitate all the
services you need. We welcome you to
Indonesia.
Thank you