The Investment Coordinating Board (BKPM) will trial a highly anticipated one-stop licensing service in the country's 15 major provinces on Wednesday, ahead of the formal implementation of the new licensing mechanism at the end of the month. BKPM chief Franky Sibarani said in Jakarta on Tuesday that 135 permit types covering the three main sectors of electricity, industry and agriculture were being prepared for the trial.
Franky added that 16 ministries and the National Police had agreed to transfer full authority to issue the 135 investment permits to the board, while the Food and Drug Monitoring Agency (BPOM) and the National Standardization Agency (BSN) had been brought in for consultation purposes. "Soon, investors will no longer have to travel back and forth across the city, they need only come here," Franky told a press briefing at his office in Central Jakarta on Tuesday. According to Franky, 18 ministries and related institutions had stationed their own representatives to ensure faster handling.
He acknowledged how long it had took for the government to realize the integrated licensing center, which dates back to 2009 when former president Susilo Bambang Yudhoyono signed Presidential Regulation (Perpres) No. 27/2009. Franky invited investors to try out the new system while acknowledging that his office would work hard to paper over the cracks, vowing to make the process swift, simple, transparent and integrated. "We'll try to perfect the end-to-end process for these permits and improve our service-level guarantee, especially with regard to processing time," he said. The prolonged process required to obtain permits to do business has long been an issue in Indonesia. The World Bank's "Doing Business 2015" report ranks Indonesia 114th out of 189 nations assessed.
Thus, easing licensing processes is seen as necessary to boost economic growth in the country, where investment accounts for around 30 percent of gross domestic product (GDP). The board previously set a target to pull investments totaling Rp. 932.9 trillion (US$73.31 billion) by 2019, barring the success of the one-stop service policy.
Franky said he had formed an ad hoc team to help simplify licensing procedures in the regions, with a target of readying the one-stop licensing centers across 70 regency and city administrations and 22 provinces this year. "Our efforts have run parallel to those in the regions since last year, such as the merging of integrated licensing centers with regional branches of the BKPM," he explained, adding that the board could not readily intervene in local investment policies due to strong regional autonomy. BKPM investment promotion deputy chief Himawan Hariyoga said the priority provinces of West Java, East Java, Central Java, Banten and North Sumatra would take part in the trial run this Thursday.
Source: The Jakarta Post, 14 January 2015