Why Did Indonesia Lose To Vietnam On Investment, Bahlil Lahadalia?

JAKARTA - Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia admitted that Indonesia is difficult to compete with other countries, especially Vietnam in terms of investment, because it involves regulations. He considered that the existing regulations in Indonesia were made to make Indonesia less competitive than other countries.

Bahlil said, for example, when a prospective investor obtains a Business Identification Number (NIB) it is not automatically possible to immediately carry out business activities in the country. Obtaining NIB is indeed easy, it is enough through an integrated electronic licensing system or online single submission (OSS). But according to him, there are still other permits that must be processed and the process is time-consuming.

"OSS said that 3 hours of registering directly to get NIB. That NIB can not then be used as a basis for doing business. He has to take care of new permits again and then get notifications from ministries / agencies. And the notification is then 'tawaf', up to 2 years. , 3 years have not been completed, "he said at the Corona Pandemic Book Launching: Virus Deglobalization, The Future of the Global and National Economy, Jakarta, Monday, July 13.

Regarding the regulations, President Joko Widodo (Jokowi) issued Presidential Instruction (Inpres) Number 7 of 2019 concerning the Acceleration of Ease of Doing Business. Through this Inpres, BKPM has the mandate to handle business licensing authority and the provision of investment facilities.

However, Bahlil revealed that currently Indonesia has become the destination for relocating the factories of large companies from China. In fact, previously large companies preferred to relocate their factories to Vietnam.

Bahlil explained, in 2018-2019 there were no companies relocating from China to Indonesia, all of them chose. However, currently BKPM noted that it has started to enter seven companies.

"Now it has been seven, yesterday it was inaugurated and later there will be 17 companies with 70-80 percent potential to enter," he said.

According to Bahlil, the entry of these companies was due to attractive offers provided by the Indonesian government to these companies. He gave an example, the Batang Industrial Estate in Central Java, where construction would begin by providing land for free.

"We just gave free land, yesterday we made it in Batang, the president inaugurated, this is BUMN land, infrastructure is built by the state budget, the resources are rented because the industrial area is currently not an industrial area for investors, but an industrial land area. There is no industry but the land. already there, "he said.

Bahlil said, with the existence of an industrial area in the Batang area, the government would give more priority to the Micro, Small and Medium Enterprises (MSMEs) sector.

"With the existence of the Batang industrial area, I give it to MSMEs, so that they grow up together," he said.