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Ada Pertanyaan? Hubungi Kami Marcell Sihombing, Kartini L. Makmur
It is common knowledge that not all policies and regulations formulated by the government are flawless. In fact, new initiatives often end up creating concern among the relevant stakeholders. Hukumonline put several such areas of concern, as they relate to recent government policies and regulations, up for discussion at an event entitled Panel Discussion on the Latest Government Policies and Obstacles Faced by Businesses, which was held in Jakarta on Tuesday, 3 May 2016.
Legal Compliance Expenses
At present, Indonesia has the highest loan interest rates of any Southeast Asian nation, and these are seen as a major obstacle as regards improving the country’s overall business competitiveness, and is also believed to be slowing down economic growth as a whole.
According to Hariyadi B. Sukamdani, Chair of the National Management Council (DPN) for the Employer’s Association of Indonesia (Apindo), the main cause of the country’s high loan interest rates is because its legal sector. Mr. Sukamdani firmly believes that legal uncertainties, the expenses involved in legal compliance, and various aspects of company management have a significant influence on the country’s interest rates. Mr. Sukamdani asserted that banks intentionally set high loan interest rates in order to anticipate loan risks which could result from legal uncertainties and longwinded dispute-settlement mechanisms involving bankruptcy trial proceedings in court.
“Legal-compliance expenses are indeed very high here due to the country’s complicated regulatory banking framework. Thus we are strongly hoping that the Financial Services Authority (OJK) and Bank Indonesia will be able to evaluate several relevant banking regulations, so that legal compliance expenses can be minimized,” asserted Mr. Sukamdani.
Licensing Procedures
Continuing his address, Mr. Sukamdani asserted that licensing procedures have long proved to be a major hindrance for the investment sector here, and also pointed out that complicated and time-consuming license-issuance processing greatly diminishes the development of business operations.
In response to Mr. Sukamdani, Lestari Indah, Deputy for Service at the Indonesia Investment Coordinating Board (BKPM), asserted that the government is currently focusing its efforts upon further improving the country’s investment sector. In order to do this, the government has already issued various policies and regulations which, it is hoped, will give a boost to the investment climate here. These initiatives include a simplification of the current regulatory frameworks and bureaucratic processes which businesses have to comply with in order to secure relevant licenses.
“Quantitatively speaking, there has been a significant rise in the number of licenses issued. Moreover, qualitatively speaking, the government has also introduced the new three-hour investment service facility in a bid to boost investment. The One-Stop Integrated Service facility is seen as being very reliable, and indeed the BKPM is now issuing over 1,000 licenses per month. And so, while increased competition for investment awaits us in the future, the BKPM is optimistic that it can maintain a positive investment flow with the support of the simplified policies outlined above,” asserted Ms. Indah.
Logistics Procedures
Mr. Sukamdani also pointed to the fact that transporting goods between different regions of the country, as well as to and from foreign countries, was a far from efficient process. According to Sukamdani, the Ministry of Trade obliges businesses to first secure a pre-verification report from the port of embarkation and the longwinded procedures involved in this process places an extra burden upon businesses.
“For example, ships only take three days to arrive in Bangkok from Jakarta, however securing a pre-verification report takes seven days. The obligation to secure a pre-verification report therefore results in lengthy dwelling times for ships,” revealed Mr. Sukamdani.
According to Mr. Sukamdani, it would be more effective if the government established a more streamlined, pre-clearance mechanism instead, which would ultimately shorten dwelling times at ports. Indeed, Mr. Sukamdani claimed that more than 85% of the goods arriving in Tanjung Priok port did not have to go through a pre-clearance process prior to their arrival.
Negative Investment List Revised
Hendri Saparini, a member of the National Industrial and Economic Committee (KENI) and the President Commissioner of PT Telkom Indonesia, was also present at the recent panel discussion and asserted that the official launch last February of the government’s new negative investment list (DNI), as a part of its Tenth Economic Policy Package, was also a concern for Indonesian businesses. Indeed, Mr. Saparini claimed that the revised DNI completely opened up some 35 business sectors to foreign direct investment (FDI), including the crumb-rubber industry and the cold-storage industry. The fear is that an influx of foreign commodities could ultimately cause Indonesian businesses to lose access to their own domestic market.
“The government’s policies contradict one another. One policy intends to improve a particular matter, while another policy allows for FDI. Eventually our [local businesses’] access to the domestic market will be exhausted due to the influx of cheap goods from foreign countries,” asserted Mr. Saparini.
Infrastructure Budget
Mr. Saparini went on to raise another significant concern, specifically the population’s low purchasing power. This is the result of the country’s high unemployment level, as revealed in recent Central Statistic Board (BPS) data. According to this data, Indonesia’s unemployment level, as of March 2016, stood at some 7.02 million people.
“Inevitably, the construction of infrastructure will provide new employment opportunities and is thus vital. The construction of infrastructure has to be funded via the state budget of course, however hopefully new infrastructure projects may compensate for the loss of employment opportunities across other sectors,” Mr. Saparini speculated.
Commenting on this issue, Mr. Sukamdani declared that the business sector was highly hopeful as regards the allocation of infrastructure funding via the state budget. Mr. Sukamdani also sounded a note of caution though, and reminded those present at the discussion that budget allocations were often not followed by the successful implementation of infrastructure projects, due to the failure of many ministries to utilize even 50% of their designated budgets.
Legal Compliance Expenses
At present, Indonesia has the highest loan interest rates of any Southeast Asian nation, and these are seen as a major obstacle as regards improving the country’s overall business competitiveness, and is also believed to be slowing down economic growth as a whole.
According to Hariyadi B. Sukamdani, Chair of the National Management Council (DPN) for the Employer’s Association of Indonesia (Apindo), the main cause of the country’s high loan interest rates is because its legal sector. Mr. Sukamdani firmly believes that legal uncertainties, the expenses involved in legal compliance, and various aspects of company management have a significant influence on the country’s interest rates. Mr. Sukamdani asserted that banks intentionally set high loan interest rates in order to anticipate loan risks which could result from legal uncertainties and longwinded dispute-settlement mechanisms involving bankruptcy trial proceedings in court.
“Legal-compliance expenses are indeed very high here due to the country’s complicated regulatory banking framework. Thus we are strongly hoping that the Financial Services Authority (OJK) and Bank Indonesia will be able to evaluate several relevant banking regulations, so that legal compliance expenses can be minimized,” asserted Mr. Sukamdani.
Licensing Procedures
Continuing his address, Mr. Sukamdani asserted that licensing procedures have long proved to be a major hindrance for the investment sector here, and also pointed out that complicated and time-consuming license-issuance processing greatly diminishes the development of business operations.
In response to Mr. Sukamdani, Lestari Indah, Deputy for Service at the Indonesia Investment Coordinating Board (BKPM), asserted that the government is currently focusing its efforts upon further improving the country’s investment sector. In order to do this, the government has already issued various policies and regulations which, it is hoped, will give a boost to the investment climate here. These initiatives include a simplification of the current regulatory frameworks and bureaucratic processes which businesses have to comply with in order to secure relevant licenses.
“Quantitatively speaking, there has been a significant rise in the number of licenses issued. Moreover, qualitatively speaking, the government has also introduced the new three-hour investment service facility in a bid to boost investment. The One-Stop Integrated Service facility is seen as being very reliable, and indeed the BKPM is now issuing over 1,000 licenses per month. And so, while increased competition for investment awaits us in the future, the BKPM is optimistic that it can maintain a positive investment flow with the support of the simplified policies outlined above,” asserted Ms. Indah.
Logistics Procedures
Mr. Sukamdani also pointed to the fact that transporting goods between different regions of the country, as well as to and from foreign countries, was a far from efficient process. According to Sukamdani, the Ministry of Trade obliges businesses to first secure a pre-verification report from the port of embarkation and the longwinded procedures involved in this process places an extra burden upon businesses.
“For example, ships only take three days to arrive in Bangkok from Jakarta, however securing a pre-verification report takes seven days. The obligation to secure a pre-verification report therefore results in lengthy dwelling times for ships,” revealed Mr. Sukamdani.
According to Mr. Sukamdani, it would be more effective if the government established a more streamlined, pre-clearance mechanism instead, which would ultimately shorten dwelling times at ports. Indeed, Mr. Sukamdani claimed that more than 85% of the goods arriving in Tanjung Priok port did not have to go through a pre-clearance process prior to their arrival.
Negative Investment List Revised
Hendri Saparini, a member of the National Industrial and Economic Committee (KENI) and the President Commissioner of PT Telkom Indonesia, was also present at the recent panel discussion and asserted that the official launch last February of the government’s new negative investment list (DNI), as a part of its Tenth Economic Policy Package, was also a concern for Indonesian businesses. Indeed, Mr. Saparini claimed that the revised DNI completely opened up some 35 business sectors to foreign direct investment (FDI), including the crumb-rubber industry and the cold-storage industry. The fear is that an influx of foreign commodities could ultimately cause Indonesian businesses to lose access to their own domestic market.
“The government’s policies contradict one another. One policy intends to improve a particular matter, while another policy allows for FDI. Eventually our [local businesses’] access to the domestic market will be exhausted due to the influx of cheap goods from foreign countries,” asserted Mr. Saparini.
Infrastructure Budget
Mr. Saparini went on to raise another significant concern, specifically the population’s low purchasing power. This is the result of the country’s high unemployment level, as revealed in recent Central Statistic Board (BPS) data. According to this data, Indonesia’s unemployment level, as of March 2016, stood at some 7.02 million people.
“Inevitably, the construction of infrastructure will provide new employment opportunities and is thus vital. The construction of infrastructure has to be funded via the state budget of course, however hopefully new infrastructure projects may compensate for the loss of employment opportunities across other sectors,” Mr. Saparini speculated.
Commenting on this issue, Mr. Sukamdani declared that the business sector was highly hopeful as regards the allocation of infrastructure funding via the state budget. Mr. Sukamdani also sounded a note of caution though, and reminded those present at the discussion that budget allocations were often not followed by the successful implementation of infrastructure projects, due to the failure of many ministries to utilize even 50% of their designated budgets.
(rfs/sp)
Marcell Sihombing, Kartini L. Makmur
It is common knowledge that not all policies and regulations formulated by the government are flawless. In fact, new initiatives often end up creating concern among the relevant stakeholders. Hukumonline put several such areas of concern, as they relate to recent government policies and regulations, up for discussion at an event entitled Panel Discussion on the Latest Government Policies and Obstacles Faced by Businesses, which was held in Jakarta on Tuesday, 3 May 2016.
Legal Compliance Expenses
At present, Indonesia has the highest loan interest rates of any Southeast Asian nation, and these are seen as a major obstacle as regards improving the country’s overall business competitiveness, and is also believed to be slowing down economic growth as a whole.
According to Hariyadi B. Sukamdani, Chair of the National Management Council (DPN) for the Employer’s Association of Indonesia (Apindo), the main cause of the country’s high loan interest rates is because its legal sector. Mr. Sukamdani firmly believes that legal uncertainties, the expenses involved in legal compliance, and various aspects of company management have a significant influence on the country’s interest rates. Mr. Sukamdani asserted that banks intentionally set high loan interest rates in order to anticipate loan risks which could result from legal uncertainties and longwinded dispute-settlement mechanisms involving bankruptcy trial proceedings in court.
“Legal-compliance expenses are indeed very high here due to the country’s complicated regulatory banking framework. Thus we are strongly hoping that the Financial Services Authority (OJK) and Bank Indonesia will be able to evaluate several relevant banking regulations, so that legal compliance expenses can be minimized,” asserted Mr. Sukamdani.
Licensing Procedures
Continuing his address, Mr. Sukamdani asserted that licensing procedures have long proved to be a major hindrance for the investment sector here, and also pointed out that complicated and time-consuming license-issuance processing greatly diminishes the development of business operations.
In response to Mr. Sukamdani, Lestari Indah, Deputy for Service at the Indonesia Investment Coordinating Board (BKPM), asserted that the government is currently focusing its efforts upon further improving the country’s investment sector. In order to do this, the government has already issued various policies and regulations which, it is hoped, will give a boost to the investment climate here. These initiatives include a simplification of the current regulatory frameworks and bureaucratic processes which businesses have to comply with in order to secure relevant licenses.
“Quantitatively speaking, there has been a significant rise in the number of licenses issued. Moreover, qualitatively speaking, the government has also introduced the new three-hour investment service facility in a bid to boost investment. The One-Stop Integrated Service facility is seen as being very reliable, and indeed the BKPM is now issuing over 1,000 licenses per month. And so, while increased competition for investment awaits us in the future, the BKPM is optimistic that it can maintain a positive investment flow with the support of the simplified policies outlined above,” asserted Ms. Indah.
Logistics Procedures
Mr. Sukamdani also pointed to the fact that transporting goods between different regions of the country, as well as to and from foreign countries, was a far from efficient process. According to Sukamdani, the Ministry of Trade obliges businesses to first secure a pre-verification report from the port of embarkation and the longwinded procedures involved in this process places an extra burden upon businesses.
“For example, ships only take three days to arrive in Bangkok from Jakarta, however securing a pre-verification report takes seven days. The obligation to secure a pre-verification report therefore results in lengthy dwelling times for ships,” revealed Mr. Sukamdani.
According to Mr. Sukamdani, it would be more effective if the government established a more streamlined, pre-clearance mechanism instead, which would ultimately shorten dwelling times at ports. Indeed, Mr. Sukamdani claimed that more than 85% of the goods arriving in Tanjung Priok port did not have to go through a pre-clearance process prior to their arrival.
Negative Investment List Revised
Hendri Saparini, a member of the National Industrial and Economic Committee (KENI) and the President Commissioner of PT Telkom Indonesia, was also present at the recent panel discussion and asserted that the official launch last February of the government’s new negative investment list (DNI), as a part of its Tenth Economic Policy Package, was also a concern for Indonesian businesses. Indeed, Mr. Saparini claimed that the revised DNI completely opened up some 35 business sectors to foreign direct investment (FDI), including the crumb-rubber industry and the cold-storage industry. The fear is that an influx of foreign commodities could ultimately cause Indonesian businesses to lose access to their own domestic market.
“The government’s policies contradict one another. One policy intends to improve a particular matter, while another policy allows for FDI. Eventually our [local businesses’] access to the domestic market will be exhausted due to the influx of cheap goods from foreign countries,” asserted Mr. Saparini.
Infrastructure Budget
Mr. Saparini went on to raise another significant concern, specifically the population’s low purchasing power. This is the result of the country’s high unemployment level, as revealed in recent Central Statistic Board (BPS) data. According to this data, Indonesia’s unemployment level, as of March 2016, stood at some 7.02 million people.
“Inevitably, the construction of infrastructure will provide new employment opportunities and is thus vital. The construction of infrastructure has to be funded via the state budget of course, however hopefully new infrastructure projects may compensate for the loss of employment opportunities across other sectors,” Mr. Saparini speculated.
Commenting on this issue, Mr. Sukamdani declared that the business sector was highly hopeful as regards the allocation of infrastructure funding via the state budget. Mr. Sukamdani also sounded a note of caution though, and reminded those present at the discussion that budget allocations were often not followed by the successful implementation of infrastructure projects, due to the failure of many ministries to utilize even 50% of their designated budgets.
Legal Compliance Expenses
At present, Indonesia has the highest loan interest rates of any Southeast Asian nation, and these are seen as a major obstacle as regards improving the country’s overall business competitiveness, and is also believed to be slowing down economic growth as a whole.
According to Hariyadi B. Sukamdani, Chair of the National Management Council (DPN) for the Employer’s Association of Indonesia (Apindo), the main cause of the country’s high loan interest rates is because its legal sector. Mr. Sukamdani firmly believes that legal uncertainties, the expenses involved in legal compliance, and various aspects of company management have a significant influence on the country’s interest rates. Mr. Sukamdani asserted that banks intentionally set high loan interest rates in order to anticipate loan risks which could result from legal uncertainties and longwinded dispute-settlement mechanisms involving bankruptcy trial proceedings in court.
“Legal-compliance expenses are indeed very high here due to the country’s complicated regulatory banking framework. Thus we are strongly hoping that the Financial Services Authority (OJK) and Bank Indonesia will be able to evaluate several relevant banking regulations, so that legal compliance expenses can be minimized,” asserted Mr. Sukamdani.
Licensing Procedures
Continuing his address, Mr. Sukamdani asserted that licensing procedures have long proved to be a major hindrance for the investment sector here, and also pointed out that complicated and time-consuming license-issuance processing greatly diminishes the development of business operations.
In response to Mr. Sukamdani, Lestari Indah, Deputy for Service at the Indonesia Investment Coordinating Board (BKPM), asserted that the government is currently focusing its efforts upon further improving the country’s investment sector. In order to do this, the government has already issued various policies and regulations which, it is hoped, will give a boost to the investment climate here. These initiatives include a simplification of the current regulatory frameworks and bureaucratic processes which businesses have to comply with in order to secure relevant licenses.
“Quantitatively speaking, there has been a significant rise in the number of licenses issued. Moreover, qualitatively speaking, the government has also introduced the new three-hour investment service facility in a bid to boost investment. The One-Stop Integrated Service facility is seen as being very reliable, and indeed the BKPM is now issuing over 1,000 licenses per month. And so, while increased competition for investment awaits us in the future, the BKPM is optimistic that it can maintain a positive investment flow with the support of the simplified policies outlined above,” asserted Ms. Indah.
Logistics Procedures
Mr. Sukamdani also pointed to the fact that transporting goods between different regions of the country, as well as to and from foreign countries, was a far from efficient process. According to Sukamdani, the Ministry of Trade obliges businesses to first secure a pre-verification report from the port of embarkation and the longwinded procedures involved in this process places an extra burden upon businesses.
“For example, ships only take three days to arrive in Bangkok from Jakarta, however securing a pre-verification report takes seven days. The obligation to secure a pre-verification report therefore results in lengthy dwelling times for ships,” revealed Mr. Sukamdani.
According to Mr. Sukamdani, it would be more effective if the government established a more streamlined, pre-clearance mechanism instead, which would ultimately shorten dwelling times at ports. Indeed, Mr. Sukamdani claimed that more than 85% of the goods arriving in Tanjung Priok port did not have to go through a pre-clearance process prior to their arrival.
Negative Investment List Revised
Hendri Saparini, a member of the National Industrial and Economic Committee (KENI) and the President Commissioner of PT Telkom Indonesia, was also present at the recent panel discussion and asserted that the official launch last February of the government’s new negative investment list (DNI), as a part of its Tenth Economic Policy Package, was also a concern for Indonesian businesses. Indeed, Mr. Saparini claimed that the revised DNI completely opened up some 35 business sectors to foreign direct investment (FDI), including the crumb-rubber industry and the cold-storage industry. The fear is that an influx of foreign commodities could ultimately cause Indonesian businesses to lose access to their own domestic market.
“The government’s policies contradict one another. One policy intends to improve a particular matter, while another policy allows for FDI. Eventually our [local businesses’] access to the domestic market will be exhausted due to the influx of cheap goods from foreign countries,” asserted Mr. Saparini.
Infrastructure Budget
Mr. Saparini went on to raise another significant concern, specifically the population’s low purchasing power. This is the result of the country’s high unemployment level, as revealed in recent Central Statistic Board (BPS) data. According to this data, Indonesia’s unemployment level, as of March 2016, stood at some 7.02 million people.
“Inevitably, the construction of infrastructure will provide new employment opportunities and is thus vital. The construction of infrastructure has to be funded via the state budget of course, however hopefully new infrastructure projects may compensate for the loss of employment opportunities across other sectors,” Mr. Saparini speculated.
Commenting on this issue, Mr. Sukamdani declared that the business sector was highly hopeful as regards the allocation of infrastructure funding via the state budget. Mr. Sukamdani also sounded a note of caution though, and reminded those present at the discussion that budget allocations were often not followed by the successful implementation of infrastructure projects, due to the failure of many ministries to utilize even 50% of their designated budgets.
(rfs/sp)