REPUBLIKA.CO.ID, By: Toni Ervianto *)

Vice President Jusuf Kalla has said Indonesia needs a more efficient regulatory system to ease the entry of foreign investment into the country. Speaking about his participation in the Boao Forum for Asia (BFA) in Boao, Hainan, China, on Thursday, Kalla said Indonesia presented a promising market opportunity for Asian industrial countries, such as China, Japan and Korea. “Business players from all industrial countries, especially China, need a wider market and cheaper production base compared to what they can get in their home countries. They also need big resources. We, Indonesia, have both of them,” said Kalla as quoted by Antara news agency. One important thing Indonesia needed to do was to ensure that its regulatory system was much more efficient, so that it would be easier for foreign investors to enter the country, the Vice President said.  

Data shows that China sees Indonesia as its second-biggest market for investment after the US. Total realized foreign investment, excluding the downstream oil and gas and finance sector, from China to Indonesia amounted to US$2.1 billion between 2010 and 2015. According to the Investment Coordinating Board (BKPM), China ranks 11th among other nations in terms of amount of realized investment in Indonesia. The Indonesian and Chinese governments are targeting an investment commitment of up to $30 billion from China in Indonesia in 2016.

Bank Indonesia governor Agus Martowardojo has said that the country’s economic growth could reach up to 5.6 percent this year as long as the government was able to accomplish structural reform as planned. The International Monetary Fund (IMF) has estimated that Indonesian economic growth would reach about 4.9 percent this year. The IMF revised its the global economic growth forecast due to the declining commodity prices and economic slowdown in emerging countries, such as China and Brazil.

The growth assumption in the 2016 state budget is 5.3 percent. The Indonesian government plans to submit its budget revision bill to the House of Representatives in May, as part of the government’s response to the continuing global economic slowdown. Meanwhile, the central bank is projecting growth of between 4.2 and 5.6 percent.

The government has introduced a number of economic stimulus packages to boost the business climate, including measures such as the deregulation of business permits and employment systems in an attempt to attract investors.

To Attract Investors

The presence of investors is needed to boost our national economy, because investors have a huge capital, technology dan plan to make economic progress could be reached. But, we must also alert on investors because those ones could be become our seriously problems, if ones have a bad intention to our national economic through ones avoid our regulatory.

These issue has need more attention because at least 2,000 foreign companies in Indonesia have been avoiding billions of dollars of tax in the last 10 years by claiming that their companies are currently running at a loss, Finance Minister Bambang Brodjonegoro has reported as quoted by setkab.go.id. Each company, according to him, should have paid a minimum average of Rp 75 billion in tax liabilities per year. In total they have caused at least Rp 100 trillion (US$7.5 billion) in state losses.

As for individual taxpayers, he continued, their tax obedience was also quite low. There were only 900,000 taxpayers, out of 5 million NPWP (tax identification number) holders with two or three sources of income who last year paid personal-income tax, a total of Rp 9 trillion.

The government will encourage the tax office and Financial Transaction Reports and Analysis Centre (PPATK) to cooperate in listing taxpayer data, as well as integrating IT infrastructure between the two institutions.

To minimalizing foreign companies or investors which have a bad track record, the government of Indonesia through Financial Transaction Reports and Analysis Centre (PPATK), the Ministry of Foreign Affairs, the Investment Coordinating Board (BKPM) and State Intelligence Agency (BIN) must be tracked  their business track record.

Some of condition must do to attracts investor come to Indonesia such as regulatory system was much more efficient. These condition    must create because the efficient of regulatory system could build a condusive situation for investor, transparancy of business rule and to eradicate corruption actions.

Besides that, Indonesia must maintain a condusive national situation because labor rallies, unstable political situation and raising criminal trend just only make foreign investors would be replaced their capital or their investment to countries which have a condusive situation. These task is a serious task which is done by Security, Politic and Law Coordinator Ministry, security apparatus including intelligence apparatus to monitor national situation but in other side they must obey on human rights value, the principal of equality before the law and democracy.

I think Indonesia is the main player in the future of Asia and Indonesia is a key player on the dynamics of global and regional situation. Indonesia has a big potential to be a pivotal subject in the new era of Pasific Asia. Therefore, all of national stakeholders must realized on those potential and make harmony cooperation among them.

*) The writer is an economic observer also a mass communation experties.

Ikuti Whatsapp Channel Republika