The effects of COVID-19 can be felt in every aspect of life, especially in the economic growth of Indonesia. Limitations to operate business leads to a mass panic, where people start to pull out their investment. This has undeniably affected Indonesia’s investment climate.
The Indonesia Investment Coordinating Board (BKPM) is well aware of this fact. However, there is still a chance to stabilize, even increase, the current state of Indonesia’s domestic and foreign investment realizations. BKPM took several measures to anticipate COVID-19, starting by assessing the impacts that it has created as well as impacts that will soon approach.
Looking back, the top foreign investors in Indonesia are Singapore, Japan, South Korea, and China, which have been greatly affected by the COVID-19 pandemic. BKPM has reported a 9.2% decrease during the first quarter of foreign investment. However, BKPM is still hopeful regarding the investment climate in Indonesia, since there is a significant rise in domestic investment amassing Rp 112.7 trillion.
BKPM has set a target of Rp 886.1 trillion for Indonesia’s investment realization, a target that Bahlil Lahadalia, chairman of BKPM, admitted as a very high number to achieve. Though at the time BKPM set the target, the COVID-19 was still unknown and still deemed possible due to the massive growth in Indonesia’s investment realization.
“As a national institution that has been tasked to handle any problems regarding investment in Indonesia, BKPM will do anything in its capacity to achieve that target,” stated Bahlil in a teleconference on Monday (20/4). BKPM took several measures to anticipate COVID-19, one of which is acknowledging the massive impact of the global pandemic to Indonesia’s investment climate. Having said that, BKPM set a rather pessimistic target of Rp 817 trillion for 2020.
The low number of foreign investment in Indonesia during the first quarter does not diminish the work of BKPM to help stabilize Indonesia’s investment climate. Currently, Bahlil stated that BKPM is reassessing the investment strategy and creating a simulation to prevent any recurring downfall of investment rate in Indonesia.
BKPM took several measures to anticipate COVID-19 impacts on Indonesia’s investment rate. BKPM works together with the Ministry of Foreign Affairs to boost interest from foreign countries, so they are appealed to make more investment in Indonesia. Both BKPM and Ministry of Foreign Affairs are confident that this cooperation will increase the foreign investment realization of 2020, by utilizing the proper strategy and targeted promotion approach.
The Ministry of Foreign Affairs will act as promoters, where diplomats promote Indonesia’s large potentials in investment. BKPM will continue its role to facilitate every investment activity.
To accommodate those who would like to make investments or request business permits, BKPM has launched a command center aptly named “Pusat Komando Operasi dan Pengawalan Investasi” (BKPM Investment Control and Command Center) in March. BKPM took several measures to anticipate COVID-19 with a faster, digitalized, and practical investment process.
Bahlil stated that this command center allows people to get business and investment permits in easier manners, the data shown is in real-time and monitored directly by BKPM. As the process of producing business permits got faster and more controlled, the investment administration process may get smoother in the long run.
BKPM has also re-focus in expanding investment to several countries that have minimal impacts of COVID-19 or have slowly recovered, such as South Korea, Singapore, Europe, and Middle East countries. According to Bahlil, several business sectors in Indonesia have great investment potential, including infrastructure, mining, and farming. Several specific in-demand sectors will keep operating, all according to SOP on PSBB, like wearing protective masks.
During this difficult time, BKPM took several measures to anticipate COVID-19 by facilitating more practical regulations in business and investment administration. “BKPM guarantees that it will continue to boost Indonesia’s investment climate by simplifying regulations for doing business easily,” urged Bahlil.