Jokowi's Dream To Realize IKN, Overshadowed By The Pessimists Of Foreign Investors?

Photo by Andry Winarko VOI

JAKARTA _ President Jokowi again appointed Coordinating Minister for Maritime Affairs and Investment (Menko Marves) Luhut Binsar Panjaitan as Head of the Task Force for the Acceleration of Land Acquisition and Investment in the State Capital (IKN) Nusantara.

The former Commander of the Detachment 81 Anti-Terrorist Kopassus is again trusted to secure the development of IKN in the Sepaku area, North Penajam Paser Regency and Kutai Kartanegara Regency, East Kalimantan, ahead of the end of President Joko Widodo's leadership. This is the umpteenth assignment in Luhut.

This politician from a goalkeeper and from North Sumatra received the main task of being Coordinating Minister for Maritime Affairs and Fisheries from Jokowi. On the occasion, Luhut admitted that in the DPR forum he had received 27 special assignments from the former Mayor of Solo. Details of the special tasks Luhut received from Jokowi include handling the Covid pandemic, support for the G20 Presidency, about carbon emissions, about sea tolls, Bandung high-speed trains, to assignments to overcome the problem of cooking oil. Now about the acceleration of IKN development.

The last assignment for Luhut Binsar Panjaitan is stated in Presidential Decree No. 14 of 2023 concerning the Task Force for Accelerating Land Acquisition and Investment in the State Capital (IKN). This presidential appointment follows a number of criticisms and complaints from investors who claim to have difficulty obtaining land in IKN. In addition to regulations and agrarian conflicts, there are also land issues that have not been completely free or clean and clear.

Of the many special tasks given by Jokowi, it is emphasized that the figure of Luhut Binsar Panjaitan is the most trusted person in solving various problems that occur in this country. It is not wrong if there is a nickname circulating to Luhut as the real president in Indonesia.

Head of the IKN Authority, Bambang Susantono, said the appointment of Coordinating Minister for Maritime Affairs and Fisheries, Luhut Binsar, was the Head of the Investment Acceleration Task Force at IKN or a special task force team to synergize and accelerate the development of IKN.

"He will coordinate interdept and also all related institutions, so that the process of accelerating investment in IKN can run better and more efficiently," Bambang said in a press release.

The task of the Task Force is said to have conducted an inventory, identified problems and determined strategic steps or breakthroughs needed to accelerate land acquisition and investment in IKN. In addition, the Task Force also has a function of increasing synergy and policy making between ministries/agencies to accelerate development in IKN. As well as facilitating the ease of doing business in IKN.

Returning to Luhut Binsar Panjaitan, this figure is again considered by Jokowi to be capable of taking tactical and precise steps in order to realize the IKN project that has been voiced since 2022. However, in reality, seeing the development of the IKN development process has not been encouraging.

The development of IKN in East Kalimantan, is located on 252,660 hectares of land with a budget of IDR 466 trillion. Where 20 percent will be financed by the APBN budget or around IDR 89 trillion. Meanwhile, 80 percent of it comes from Government Cooperation with Business Entities (PPP) and the private sector of IDR 253 trillion and BUMN and BUMD IDR 123 trillion. So the largest portion of IKN development relies on private investment. However, the realization until November 2023 has only reached IDR 35 T from the target of IDR 253 T.

Based on what is planned at the initial stage, basic infrastructure will be built, such as the presidential office, the MPR/DPR RI complex, government agency offices and connecting road facilities. Not to forget the utility of basic facilities and plans to transfer 500 thousand civil servants, this project is the responsibility of the state budget.

Slapped By Reality

Since its announcement until now, the IKN project has cost IDR 60 trillion with physical infrastructure construction reaching 74 percent. The physical development is in the form of the homes of ministers, ministry buildings, presidential palaces, connecting roads and workers' buildings. Unfortunately so far, no one investor has been interested in investing in IKN. This may make Jokowi feel slapped by the reality hard.

After the APEC Summit meeting, in California, USA, Jokowi told reporters that until now no foreign investors have entered IKN. However, he believes that if domestic investors start to enter, then foreign investors will be interested. "Just look at it," Jokowi said at that time optimistic.

In accordance with the 2020-2024 RPJMN, IKN financing will use various schemes, including through a pure APBN, a government and business entity cooperation scheme (KPBU), an international grant scheme, and other funding schemes (creative financing), such as crowdfunding and funds from philanthropy. However, only a handful of local entrepreneurs have been interested and invested. Bambang Susantono admitted that there were already 300 who submitted Letter of Intent, but only a few local investors have realized their investment commitments, which are referred to as pioneer investors.

Deputy for Funding and Investment of the Archipelago Capital Authority (OIKN) Agung Wicaksono, said that the total number of pioneer investors who entered IKN was 23 agencies, with an investment value of IDR 41 trillion. These investors include Agung Sedayu Group, Adaro, Sinarmas, Pulauintan, Salim Group, Astra, Mulia Group, Barito Pacific, Kawan Lama, and Alfamart

Promo Genjotan Pull Investors

To move IKN, the President did not only take steps to appoint Luhut as Chair of the Investment Acceleration Task Force at IKN. The President also took various actions such as perfecting Law 3 of 2022 concerning the State Capital (IKN). Being Law Number 21 of 2023 concerning Amendments to Law Number 3 of 2022 concerning the State Capital. Also issuing a number of derivative rules such as PP 12/2023 concerning incentives will make investment easier. Where this rule is considered by a number of parties to be able to encourage investment in IKN. And is currently working on other PP Drafts and other drafts of Presidential Regulation, which are expected to increase investment in IKN.

Deputy Head of Regional Autonomy, Sarman Simanjora assessed that the implementation of PP 12/2023 concerning the Granting of Business Licensing, Ease of Doing Business, and Investment Facilities for Business Actors in the capital city of the archipelago was a breath of fresh air for potential investors. Sarman views that there are now technical regulations, so that investment there are already guarantees for potential investors. For example, it is stated that HGU/land guarantees are up to 95 years. There is also exemption from import duties until 2035, VAT has not been withdrawn until 2035.

This already illustrates the appeal and encourages investment. This position is a guarantee of more. "This is a new city that needs guarantees, the new government must also provide a guarantee that IKN development will continue. This, he said, is a very strong message. Most importantly, the certainty is held. How PP can socialize, and make derivative regulations, ask for it to be realized quickly. According to him, the sustainability problem has been guaranteed, so that it can strongly attract investment. Especially local investment.

"Currently, the derivative of the PP is still being realized so that investors can enter immediately," Sarman told VOI.

Economist who is also the Director of Indonesia Development and Islamic Studies (IDEAS), Yusuf Wibisono admitted that he is still pessimistic about these efforts. According to him, if using pure commercial calculations, there will not be many investors who will dare to enter IKN.

"The presence of PP No. 12/2023 which was later strengthened by the revision of the IKN Law, I don't think there will be much change of the situation, even being proof of how prospective the investment in IKN is so that the government must promote so much ease of investment through Law no. 21/2023. Too much," he said.