Wednesday, 24 April 2019 | 11:20 WIB

BKPM on Five Investment Hindrances in Indonesia

One-stop Service Office or PTSP at BKPM. (BKPM)

BATAM, NETRALNEWS.COM -  The Investment Coordinating Board (BKPM) says there are five investment hindrances in Indonesia that must be addressed together by ministries and agencies as well as local governments.

Head of BKPM, Thomas Lembong, said the first hindrance in question is numerous regulations that hamper arrival of investors. "Regulation, excessive rules, quality of regulation consistency," said Thomas in Batam, as cited by Antara.

The second hindrance is taxation regime that does not give more space for entrepreneurs. As a result, investors opt to invest in other regions that provide ease of taxation.

On one occasion, he said, the minister of finance stated that apparently of total revenue of industrial tax, 70 percent of which come from manufacturing industry. "Tax expense of manufacturing is too high. How our manufacturing industry can advance, meanwhile other countries provide incentives," Thomas explained.

Meanwhile, the third hindrance is quality of relevant human resources remains low. To overcome this obstacle, the government is promoting youths to pursue vocational education, in order to have special abilities that are needed in the industry.

The fourth obstacle is land issues amid central government and local governments. With regard to this, issues are, among others, certification, building permits and land zoning.

Finally, the fifth obstacle is infrastructure problem as main supporter of the industries.

To deal with those constraints, BKPM head said the government is actively building infrastructure, from electricity, transportation means to clean water and garbage collection.

Governor of Riau Islands, Nurdin Basirun added that the main difficulty of investments is too much bureaucracy. In fact, he said, to obtain a business license, it sometimes takes up to two suitcases of documents and the licensing process takes years. "The business world, they want swiftness and certainty," said the governor. (*)