Ada Pertanyaan? Hubungi Kami 
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Ada Pertanyaan? Hubungi Kami Marcell Sihombing, Fitri N. Heriani
In the midst of a slow economic growth, Indonesia struggles to attract more investors. Seemingly desperate with the possible options, the government is trying to bolster domestic economy, by allowing foreigners to have property ownership in Indonesia.While the government is yet to come with an actual plan and legal framework, related parties have laid out possible schemes on this policy. Franky Sibarani, Head of Indonesia Investment Coordinating Board (BKPM), said that there are suggestions to extend the period for property ownership by foreigners in Indonesia from a total of 50 years to 80 years. This suggestion, as Mr. Sibarani said, represents BKPM’s mission to attract as many foreign investors as possible.
Despite of allowing foreigners to invest in property, BKPM says that this policy will not apply to all Indonesian territory. BKPM suggests to limit the policy to Special Economic Zones only (Kawasan Ekonomi Khusus – KEK), since it was planned to be a new center of economic growth. Mr. Sibarani explains that the suggestion itself remains to be finalized by BKPM.
Property observer Nirwono Yoga assessed that there are three property-related investment problems needed to be resolved. First, the area which can be owned by foreigners must be designated in advance to avoid centralization of economic growth within developed areas. Therefore, the government must designate the primary areas in which an extended ownership will look appealing to foreign investors.
“For instance, the areas in the Eastern Indonesia regions that need the development of foreign investors,” said Mr. Yoga.
Next, government could provide protection for Indonesian citizens (WNI) in developed areas, areas with tourism potential or other kind of excellence. Government should loosen the property ownership process for WNI in such areas. With a magnificent tourism potential such as Mataram for example, it should be protected by the government under the control of WNI while limiting foreign ownership.
Lastly, the Government must take the role as a land manager who manages the development of cities, areas, and spatial planning. Spatial planning issues are due to the fact that the government never assumes such role.
Mr. Yoga also asserted that land procurement cannot be fully handled by foreigners or market schemes, since it will be unorganized. The government must directly buy and manage land procurements just like Singapore or Tokyo.
Mr. Yoga noted that the failure of investment in Indonesia is caused by horrible spatial planning managed and controlled by developers or property owners. The matter becomes even more difficult when the properties are owned by foreigners.
“If the government only grants licenses and permits while holding no authorities whatsoever, the end result would be the degradation of environment quality. That is not effective,” said Mr. Yoga.
It requires a clear limitation as to where foreigners may or may not have an ownership. Without such limitation, the government can only watch from the sidelines while local citizens have no chance to obtain properties.
Mr. Yoga agrees for the government to allow foreign ownership on KEKs, as this area will apply a specific control management. Most importantly, Mr. Yoga strongly emphasized that the government needs continuous observation on the development of KEKs.
(hot/nm/ja)
Marcell Sihombing, Fitri N. Heriani
In the midst of a slow economic growth, Indonesia struggles to attract more investors. Seemingly desperate with the possible options, the government is trying to bolster domestic economy, by allowing foreigners to have property ownership in Indonesia.While the government is yet to come with an actual plan and legal framework, related parties have laid out possible schemes on this policy. Franky Sibarani, Head of Indonesia Investment Coordinating Board (BKPM), said that there are suggestions to extend the period for property ownership by foreigners in Indonesia from a total of 50 years to 80 years. This suggestion, as Mr. Sibarani said, represents BKPM’s mission to attract as many foreign investors as possible.
Despite of allowing foreigners to invest in property, BKPM says that this policy will not apply to all Indonesian territory. BKPM suggests to limit the policy to Special Economic Zones only (Kawasan Ekonomi Khusus – KEK), since it was planned to be a new center of economic growth. Mr. Sibarani explains that the suggestion itself remains to be finalized by BKPM.
Property observer Nirwono Yoga assessed that there are three property-related investment problems needed to be resolved. First, the area which can be owned by foreigners must be designated in advance to avoid centralization of economic growth within developed areas. Therefore, the government must designate the primary areas in which an extended ownership will look appealing to foreign investors.
“For instance, the areas in the Eastern Indonesia regions that need the development of foreign investors,” said Mr. Yoga.
Next, government could provide protection for Indonesian citizens (WNI) in developed areas, areas with tourism potential or other kind of excellence. Government should loosen the property ownership process for WNI in such areas. With a magnificent tourism potential such as Mataram for example, it should be protected by the government under the control of WNI while limiting foreign ownership.
Lastly, the Government must take the role as a land manager who manages the development of cities, areas, and spatial planning. Spatial planning issues are due to the fact that the government never assumes such role.
Mr. Yoga also asserted that land procurement cannot be fully handled by foreigners or market schemes, since it will be unorganized. The government must directly buy and manage land procurements just like Singapore or Tokyo.
Mr. Yoga noted that the failure of investment in Indonesia is caused by horrible spatial planning managed and controlled by developers or property owners. The matter becomes even more difficult when the properties are owned by foreigners.
“If the government only grants licenses and permits while holding no authorities whatsoever, the end result would be the degradation of environment quality. That is not effective,” said Mr. Yoga.
It requires a clear limitation as to where foreigners may or may not have an ownership. Without such limitation, the government can only watch from the sidelines while local citizens have no chance to obtain properties.
Mr. Yoga agrees for the government to allow foreign ownership on KEKs, as this area will apply a specific control management. Most importantly, Mr. Yoga strongly emphasized that the government needs continuous observation on the development of KEKs.
(hot/nm/ja)