Economist: Increasing Human Resources Competitiveness Is The Key To Entering Investment Into The Country

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JAKARTA - Economist Yusuf Rendy Manilet assesses that tax incentives and increased competitiveness of human resources (HR) are the keys to increasing foreign direct investment (FDI) into Indonesia.

According to Yusuf, this needs to be done to take advantage of the potential for increasing FDI flow to ASEAN, even though Singapore is still at the top of the capital flow recipients.

"Actually, tax incentives are common and common to attract investors. But don't let us get caught up in cheap tax rates with inappropriate countries, one of which is Singapore," said the Center of Reform on Economics (CORE) economist, quoted from Antara, Sunday, August 20.

Yusuf said Singapore was indeed superior to Indonesia regarding relatively lower incentives and tax rates.

However, he reminded Indonesia to be careful so as not to get caught up in a low tax rate war to lure investors if they continue to compare themselves with Singapore.

And once again, when comparing with Singapore, you have to be careful because Singapore has many differences. When we can't catch up and only rely on low tax rates, we are afraid that we will actually erode the potential tax we can get. I think it needs to be noted," he said.

Yusuf assessed that Indonesia needs to provide the right incentives and in accordance with the characteristics of the Indonesian economy.

On the other hand, he did not deny that Indonesia needed to learn from Singapore, which is known as an international trade hub on logistic efficiency. Likewise, Singapore's relatively superior matter of legal, political and human rights stability.

Yusuf added that the competitiveness of Indonesian human resources also needs to be increased to be able to attract more FDIs to the country.

Finally, appropriate and consistent regulations also receive important attention to attract foreign investment. According to him, it is important to create regulations that are in accordance with investor needs but at the same time can be accepted by all interests.

It means that consistently and admissible, he applies not only to certain government periods but also in the medium to long term. And it is acceptable. Don't let the regulations be good for attracting investors but there are points that workers cannot accept. It is a challenge but yes that is the fact," said Yusuf.