JAKARTA - Indonesia is known as a haven for investment for the Asian region, due to its regulatory support. Unfortunately, the term investment paradise is actually a mess due to poor law enforcement, and the occurrence of disparities.
"Indonesia is a haven for investment for the Asian region, according to the law. But when it comes to law enforcement, heaven is in danger of falling apart, in danger of being destroyed because of poor law enforcement," senior economist Ichsanuddin Noorsy told reporters in Jakarta, Saturday, July 24.
He said that the condition was stated by two institutions, namely the World Bank, which stated that there was a problem with legal certainty which was referred to as lack of certainty. And the next agency by Moody's Poor.
It was previously reported that many investors left the Indonesian capital market due to the law enforcement process in the Jiwasraya-Asabri case. This condition was exacerbated by the actions of the Attorney General's Office which haphazardly confiscated and auctioned assets that were not even related to the case.
"I myself have said this since 2015 until late 2019, that in improving the investment climate it is not only about regulations, not only bureaucratic problems, but there are three problems there, the problem of justice and that could be related to the inequality that arises behind investment, then the problem of reckoning his position, and the problem of intervening," he said.
He also criticized President Jokowi's regime for providing a 'red carpet' to investors, but did not give a positive aura to law enforcement.
"Well, because it is not positive in law enforcement, a number of foreign securities have run away. Even though Indonesia is willing to be invaded, willing to be intervened, and willing to be introduced by foreign capital powers, right, but because law enforcement is bad they don't want to. So our position is enter into a position to be avoided in investing," he said.
Regarding the lowering of the bad law enforcement rating, Ichsanuddin assesses that the investment climate and the economy will definitely worsen.
"The rating is a verdict for me. The legal guarantee is there, but the position of law enforcement is unclear. There are a number of foreign investors who violate the law, nothing is wrong with them, only in Indonesia. So they are not just held on a red carpet, but given conditions an atmosphere of extraordinary comfort, followed by the lack of clarity in law enforcement," he said.
CSA Research Institute Senior Analyst, Reza Priyambada said there are several things that need to be considered in law enforcement in investment, in the capital market. Especially related to the way of handling or the way the legal apparatus handles or completes the legal process.
"For example, the case of wrong investment in BPJS or Jiwasraya-Asabri must be seen from the person who made the wrong SOP or investment. It is not the investment that is wrong, until news comes out that many of these investments are considered detrimental to the state," he said.
According to him, it was a mistake in analyzing the legal process that occurred.
"Things like that, law enforcement must also know what investment is, what is considered to be detrimental to the country? So things like that should get the attention of law enforcement officials. So that there are clarity from investors who are wondering how our officials will process the law related to the handling of existing cases. Then how this case is resolved, this is also their concern, "said Reza.
Reza added that related to legal handling, one must see many aspects, it cannot be seen from one or two aspects. Because investment is dynamic, so it can change at any time.
"Well, we just have to look into law enforcement. So, for example, investing in Astra shares, for example, even though the calculations are already included in a company that has good governance, now it turns out to buy at a price of 7,000, it turns out that when the book closes the price is 6,500 Now, the investment period is appropriate, it is considered detrimental to the state because it has decreased," he said.
"Then, is it wrong to invest in Astra, isn't it right? So, as I said, you have to look at it from various aspects. Unless, for example, you enter stocks that are outside the SOP, that's against the rules. "We have followed the SOP and the existing provisions, but it turns out that the investment has decreased, so we have to look again at where the mistakes were, what was mismanagement for other mistakes. So law enforcement must also be seen from various sides," he said again.
Similarly, Economist of the Center of Reform on Economics Indonesia (CORE), Yusuf Rendy Manilet, believes that the issue of legal certainty is one of the important considerations along with several other economic considerations such as ease of investment or access to bank financing.
"Although several regulations guarantee law enforcement aspects for investors, what needs to be paid attention to is the issue of the decline in Indonesia's corruption index ranking. Of course this is a kind of yellow light, because if the eradication of corruption is considered weak, then this could indicate a potential abuse of power. I think this can be a negative perception for investors," said Yusuf.
He said, in several measures of perception of corruption in Indonesia, there is one measure of the assessment of the decline in democracy that contributes to the varieties of democracy. That is, it illustrates that political corruption is still happening deeply in the political system in Indonesia.
"Once again, this could set a bad precedent for investors later," said Yusuf.
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