This Is Bahlil's Homework After Becoming Minister Of Investment According To An Economist At BCA

JAKARTA - PT Bank Central Asia Tbk (BCA) economist David Sumual assessed that 2021 is the right moment for investors to invest in the country in line with the post-pandemic economic recovery target in 2023 and the presence of the Ministry of Investment under the leadership of Bahlil Lahadalia.

"Looking at the prospects for economic growth now is actually the right time to invest. For example, this year investors can start applying for permits, then build factories for one to two years so that when the economy recovers in 2023 it will be operational. If it is postponed, the settlement will take longer and even more. In fact, the cost of capital is getting higher", said David, quoted from Antara, Thursday, April 29.

According to David, foreign investors are the ones who are actively investing because they see Indonesia's great prospects. This is reflected in data from the Investment Coordinating Board (BKPM), during the first quarter of 2021 the total investment realization reached IDR 219.7 trillion with a growth of 4.3 percent (year on year/yoy).

Of this value, 50.8 percent or IDR 111.7 trillion is the foreign investment (PMA). While the rest is the domestic investment (PMDN) with a value of IDR 108 trillion or the equivalent of 49.2 percent.

The high interest in foreign investment, continued David, should not be wasted. This is because many other countries are ready to accommodate this investment. Therefore, this momentum needs to be maintained by the government by facilitating the needs of investors.

A similar sentiment was also expressed by Teuku Rifqy, a researcher at the Institute for Economic and Social Research (LPEM) at the University of Indonesia (UI). According to him, currently, Indonesia does need a large investment to boost the economy. With an increase in investment, it can be one of the keys to stimulating rapid economic growth.

This increase in investment is also needed in connection with the widening fiscal deficit, which is already more than 6 percent due to large government spending during the pandemic. Therefore, the government is obliged to reduce the fiscal deficit by 3 percent before 2023.

"Government spending is very wasteful, the budget is already very depressed. And this condition is indeed important to be supported by an investment so as not to disrupt economic stability because state spending will be very depressed", said Rifqy.

To encourage the realization of these investments, Rifqy also hopes that the government can facilitate investors' needs in order to realize their investments.

"From the fiscal side, there are still several points that can be improved to attract investors' interest, as well as tax stimuli, for example, foreign investment from the United Nations is exempted. This is substantial homework in terms of regulation and investment", said Rifqy.

The government was asked to learn from Tesla's departure to another country. In fact, Tesla was originally rumored to be building an electric car factory in Indonesia. The number of complaints from investors that it is difficult to realize their investment has been caught by the Investment Coordinating Board (BKPM). The BKPM, which is now the Ministry of Investment, is trying to resolve investment commitments that have been stalled until now.

The Fiscal Coordinating Board (BKF) in its report entitled Economic, Financial, and Fiscal Review in the first quarter of 2021 said that investment could be a driver of economic growth during times of crisis. That's why the Fiscal policy Agency (BKF) asked the government to optimize a number of investment instruments.

According to the BKF, relying on state spending alone for economic growth will not be effective, especially since the role of spending in the last 10 years has continued to weaken. Meanwhile, an increase in spending amidst suboptimal state revenue can actually hinder private investment.