BKPM: Investments Start To Spread Outside Java, China Becomes The Second Largest Investor

Illustrated. (Irfan Meidianto / VOI)

JAKARTA - Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia said that both domestic and foreign investors are no longer focused on Java Island in investing. This is evidenced by the increasing investment outside Java Island.

"Outside Java Rp110.4 trillion or 52.8 percent and in Java Rp98.6 trillion or 47.2 percent. The investment is no longer focused on Java Island but has also happened outside Java Island," he said in a press conference. virtual, Friday, October 23.

Bahlil said that investment in Java Island has actually decreased by approximately 12 percent on an annual basis or year on year (yoy).

"So I see how good the expansion of investors outside Java Island is," he said.

Furthermore, Bahlil said, the largest foreign investors came from Singapore. This is also because the country is the hub of several countries that invest. The second largest country investing in Indonesia is China, and its position has even surpassed Japan.

"This is Japan. Hopefully with the presence of the Prime Minister it will further spur investment. Because after all Japan is an old partner with the government and has a history of independent Indonesia. Then Hong Kong is 0.7 billion US dollars," he said.

According to Bahlil, what is interesting is the increasing investment from the Netherlands to Indonesia. The amount reaches 0.5 billion US dollars. In fact, he said, currently European countries are experiencing a deficit due to the COVID-19 pandemic.

"Even though Europe has a deficit in their growth, their enthusiasm for investment in Indonesia is quite extraordinary. The Netherlands has also made several countries into real hubs," he said.

Bahlil said that foreign investment entering Indonesia cannot be separated from the perception that the government has built so far. According to him, by making regulatory changes through the Omnibus Law on Job Creation, the impact is starting to be good.

Different offers

Balil said, to overcome the imbalance in investment realization in the cities of Java and Outside Java, BKPM applies different treatments. One of them is a different tax holiday incentive.

"For outside Java, we provide more incentives. For example, tax holidays. For tax holidays in Java, we give 10 years, if they want to make it outside Java, in difficult areas, we will definitely increase the fiscal incentives to 15 years, for example," he said.

Then, said Bahlil, BKPM also provides different offers related to imported goods. For example, investors will get a bigger discount if they invest outside Java than in Java.

"We provide a tax allowance. This is an instrument that we offer to fellow investors so that they can invest their capital outside Java. Because only then can people enter," he said.

Bahlil said the government had to make a different offer so that both domestic investors would invest outside Java. Thus, investment inequality between Java and Outside Java can be overcome.

"If we give Java and outside Java the same incentive, they will prefer Java. Say we can provide land outside Java which is much cheaper than Java," he explained.