Investment Outlook & Strategic Policy 2020 oleh BKPM

1. Wisnu W. Soedibjo
Deputy Chairman for Investment Cooperation
Indonesia Investment Coordinating Board
Benefitting from
Indonesia-Australia CEPAInvestment Outlook & Strategic Policy 2020

2. Rising tensions and uncertainty could further weaken global growth…
2
Trade War
US and China
Latin American Protests
(Bolivia, Venezuela, Ecuador,
Chile)
Conflicts in the Middle-East region
(Syria, Yaman, Iraq)
British Exit (Brexit)
Hong Kong
Protests
Conflict
Iran v US
India’s growth
Is slowing

3. 3,6
3,0
3,4
2,3
1,7 1,7
4,5
3,9
4,6
2020 Projections for the global economic growth
3
2018 2019 2020 2018 2019 2020 2018 2019 2020
Global
Economy
Advanced
Economies
Emerging Markets &
Developing Economies
Growth Projections
global economy in a synchronized slowdown
Source: IMF, 2019

4. Projection of Indonesia's Economic Growth 2020
4
Source: International Monetary Fund
0%
1%
2%
3%
4%
5%
6%
5% 5.1% 5.1% 5.1% 5.2%
5.5%

5. Investment must be the main engine of economic growth
5
Jobs
Income
Spending
Investment
76% of
government revenue
comes from tax.
An increase in
investment will have a
positive impact on tax
revenue.
Investment in
manufacturing sector,
which creates jobs,
will increase export
and add value to
goods.
Y = C + I + G + ( Ex – Im )
Investment
encourages jobs
creation
Jobs creation
increases income
An increase in
income spurs
consumption and
spending

6. 5 ways to convince investors that Indonesia is the right destination for investment
6
Investment promotion,
convincing investor
that Indonesia is a good
destination for
investment
Assisting in licensing
Services
Assisting in
Financial closing
End-to-end services
for investors
Assisting until
production stage

7. 6 key performance indicators (KPIs) of BKPM
7
Ease of Doing Business Improvement
Execution of Large Investment Realization
Encourage Large Investments to Partner with
Local Entrepreneurs
Distribution of Quality Investment
Investment Promotions that are Focused on
Sectors and Countries
Increase Domestic Direct Investment, especially
SMEs

8. Investment realization from 2014 to September 2019
8
Rank Negara 2014 2015 2016 2017 2018
Jan-Sep
2019
Total
1 Singapore 5.832,1 5.901,2 9.178,7 8.441,6 9.193,2 5.380,5 43.927,3
2 Japan 2.705,1 2.877,0 5.400,9 4.996,2 4.952,8 3.239,9 24.171,8
3 China 800,0 628,3 2.665,3 3.361,2 2.376,5 3.313,3 13.144,7
4 Malaysia 1.776,3 3.077,0 1.115,6 1.213,6 1.774,9 1.267,7 10.225,1
5 Hongkong China 657,3 937,2 2.248,3 2.116,5 2.011,4 1.746,7 9.717,5
Total (145 countries) 28.529,7 29.275,9 28.964,1 32.239,7 29.307,9 21.188,1 169.505,4
FDI realization in
Indonesia (2014–Sep2019)
Basedonlocation,excludingtheupstreamoil
andgassectorandfinancialservices54,1%
3,8%
11,5%
8,4%
15,8%
6,5%
Top 5 investor countries (USDmillion)
Primary
17,4%
Secondary
38,9%
Tertiary
43,7%
Investment
Realization based on
Sectors (2014–Sep2019)

9. tO
Investment realization from January 2019 to September 2019
9
Rp 191T/USD 13.6 billion
To achieve
(target Rp 792,3T/USD 56.6 billion)
Still Need
Rp 208,3T/USD 14.8 billion
(target Rp 792,3T/USD 56.6 billion)
Potential investment realization
in Q IV
Estimated total investment realization in 2019:
Rp 809.6T / USD 57.8 B or 102.1% from the target
Investment realization
from January to September 2019
reached
Investment realization
from January to September 2019
reached
Of the 2019 target
*note: using assumption, in average 1 USD is IDR 14,000
/USD 42.9
billion

10. 2020 Investment Realization Target
10
IDR 886T/
USD63.3 Billion*
IDR 246.3T/
USD17.6 Billion*
45.6%
Investment Realization
Target 2020
Investment Realization
Target on Secondary Sector
(Manufacturing) 2020
Investment Distribution
outside Java
*note: using assumption, in average 1 USD is IDR 14,000

11. 21 projects with potential investment realization of IDR 708 trillion are still facilitated...
11
17
Projects
Investment Realization Potential
facilitated by BKPM
IDR 481,3 Trillion/
USD 34.4 Billion*
4
Mega
Projects
IDR 226,6 Trillion/
USD 16.2 Billion*
Projected Investment Realization
708IDR
Trillion/
21 Projects
Source: BKPM, 2019
USD 50.6
Billion*
*note: using assumption, in average 1 USD is IDR 14,000

12. Projects that have been facilitated, as of January 2020
12
38
(IDR trillion)/
2.7
(USD billion)
61,2
(IDR trillion)/
4.4
(USD billion)
1,8
(IDR trillion)/
128,6
(USD million)
21,7
(IDR trillion)/
1,6
(USD billion)
(Tanjung Jati Power)
Issue:
The SJKU
recommendation was not
issued from the SOE
Minister
Settlement:
issuance of SJKU
recommendations from
the Minister of BUMN No.
S-851 / MBU / 11/2019
Issue :
Building permit
Settlement:
Issueance of IMB No.
057/IMB.DPMPTSP/XI/2019
Issue:
Overlapping land
Settlement:
MOU between PT KS,
PT. KIEC withPT LCI
Issue:
Fiscal incentives
Settlement:
Fiscal incentives will
be given in
accordance with the
MOU between the
Head of BKPM and
the President & CEO
of Hyundai Motor
Company
(PT Galempa Sejahtera
Bersama)
2
(IDR trillion)/
142.9
(USD million)
Issue:
The Location Permit from the
Four Lawang Regency has
expired.
Settlement:
The Head of DPMPTSP Empat
Lawang has signed the
Commitment Fulfillment
Agreement on behalf of PT.
Galempa Sejahtera Bersama
No. 503/20 / DPMPTSP / 2019
dated December 19, 2019
39,2
(IDR trillion)/
2.8
(USD billion)
Issues:
Enviromental Impact
Assessment (EIA) and borrow-
to-use forestry permit
Settlement:
 EIA was already at the LHK
Minister's desk, but there was
a revision and returned to the
Director General's desk
 borrow-to-use forestry permit
is in the Regional Secretary
of North Sulawesi Province
Notes: the average exchange rate of USD to IDR is IDR 14.000

13. Presidential Instruction No. 7 of 2019 was issued to encourage legal certainty for investors ...
13
Minister / Head of Institution to take
necessary steps according to their
respective duties, functions and
authorities : …
…
4. delegating authority for
business licensing and
granting investment facilities
to the Chairman of the
Investment Coordinating
Board
"Second Dictum Number 4 (Four)"

14. Latest update of Presidential Instruction No. 7 of 2019
14
1 Ministry of Cooperatives and Small & Medium
Enterprises
2 Ministry of Energy and Mineral Resource
3 Indonesian National Police
4 Ministry of Agrarian Affairs and Spatial Planning
(Head of National Land Agency)
5 Ministry of Public Works and Public Housing
6 Ministry of Industry
7 National Standardization Body (BSN)
8 Directorate General of Customs and Excise
1 Ministry of Trade
2 Ministry of Communication and Informatics
3 Ministry of Religion
4 Ministry of Agriculture
5 Ministry of Transportation
6 Ministry of Health
7 Ministry of Manpower
8 Ministry of Marine and Fisheries
9 Ministry of Tourism and Creative Economy
10 Ministry of Education and Culture
11 Ministry of Environment and Forestry
12 National Drug and Food Agency (BPOM)
13 National Nuclear Power Agency (BAPETEN)
14 Directorate General of Taxation
Ministries/Institutions that have decided
Representative Officer placement and authority
delegation (in accordance to Presidential
Instruction No. 7/2019):
Ministries/Institutions that have decided Representative
Officer placement, but authority delegation is still on
process:

15. … and making BKPM as the frontline in accelerating ease of doing business
15
Coordinate corrective measures for improving the
EODB rating
Evaluate the implementation of business licensing and
investment facilities executed and provided by
Ministries/Institutions
Facilitating and providing services to investors in
managing their business licenses and providing
investment facilities
Prepare Norms, standards, procedures and criteria
(NSPK) of business licensing and granting of
investment facilities delegated by
Ministries/Institutions
1
2
3
4

16. Omnibus Law on Investment: Creating Jobs
16
Global
Economic
Development
Potential
Economic
Stagnation
Low investment
competitiveness
Overlapping
regulations
GOAL
1. Improving a conducive and attractive investment climate for
investors
2. Increasing ease of doing business, especially for MSMEs
3. Increasing economic growth in Indonesia
4. Increasing legal certainty and business certainty and the
occurrence of technology transfer and improving the quality of
Indonesian human resources
5. Increasing capital inflow into Indonesia
6. Encourage increasing in added value creation, job creation,
increasing export value and state revenues from both excise and
tax
BACKGROUND FLOW (11 Clusters)
Source of
JOBS CREATION
Investment SME Govt.
Clusters:
• Licensing
• Requirements
• Labor
• Ease of Business
• Research
• Land acquisition
• Economic Zone
Ease,
Empowerment, and
Protection of MSME
which includes :
• Criteria
• Database
• Single Licensing
• Partnerships,
incentives,
financing
Government
Investment and
Projects
• Government
Investment
• Ease of
Government
Projects
Supporting Clusters: Government Administration & Imposition of Sanctions
Total Laws that have been identified:
79 Laws (1,244 articles)

17. 11 Clusters of Omnibus law
17
1. Simplification of Business Licensing
2. Investment Requirements
3. Employment
4. Ease and Protection of MSMEs
5. Ease of Doing Business
6. Research and Innovation Support
7. Government administration
8. Imposition of Sanctions
9. Land acquisition
10. Ease of Government Projects
11. Economic Zones
Note: There are laws that
are classified into more than
1 (one) cluster because of
the relevance of substance
Total Laws that have been
identified
74 Laws
(1,237 articles)

18. 2015 2016 2017 2018 2019 2020 Target
2021
Indonesia’s Ease of Doing Business (EoDB) Ranking
18
Indonesia’s EoDB Ranking
2015-2020 and Target for 2021:
120
106
91
72
50
73 73
GOVERNMENT TARGETS IN EODB 2021
1. Building Commitments among Ministries/Institutions in
accordance with Presidential Instruction No. 7/2019 to carry out
structural reform on 11 indicators.
2. Structural Reform:
• Discussions have been conducted among Ministries/Institutions
for preparation of action plans to improve business ease on 3rd of
December 2019
• Issuance/Amendment of Ministry/Institution regulations
related to structural reforms of business ease for 11
indicators
3. Escort Implementation of EoDB Reforms at Ministries/
Institutions and Regions (Jakarta and Surabaya) in accordance
with regulations on 11 indicators (working together with the Cabinet
Secretariat and the Coordinating Ministry for the Economic Affairs)
4. Dissemination of EoDB Policies to stakeholders
Of the 190 countries surveyed by 2020 EODB, 115 countries have
made improvements.

19. Human capital investment is key
19
2015 2016 2017
0.694
0.691
0.689
0.686
0.682
Indonesia’s HDI 2013-2017
Comparison of HDI 2017
69.4
Life expectancy
at birth
12.8
E xpected years of
schooling
* In t h o u s a n d
8.0
Mean years of
schooling
10.846*
GNI per Capita
2013 2014
Indonesia’s HDI 2017
Indonesia still needs to improve its human capital continuously and consistantly
Source: UNDP, 2019
Singapore
Brunei Drslm
Malaysia
Turkey
Mexico
Brazil
Thailand
China
Philippines
South Africa
Indonesia
Vietnam
India
Cambodia
Myanmar
0.932
0.853
0.802
0.791
0.774
0.759
0.755
0.752
0.699
0.699
0.694
0.694
0.640
0.578
0.582

20. Rising need for vocational schools: preparing Indonesia’s future workforce
20
Food and
agriculture
Energy Tourism and
creative
industry
Maritime
Develop
vocational
education
Arrange
the joint-
curriculum
Provide
lecturers
Provide
internships
Where arevocational
graduatesneeded?
What canindustrydo?
Source: Ministry of Research, Technology, and Higher Education, 2017
Univ. graduates
do not match
industries’ needs
5.4%
of educational
institutes are
vocational, compared
to 50% in developed
countries
Regulation
Establishment of
Presidential
Instruction No. 9/2016
on revitalization of
vocational schools
Revitalization
of Vocational
Education

21. THANK YOU
Indonesia Investment Coordinating Board
Badan Koordinasi Penanaman Modal (BKPM)
Jl. Jenderal Gatot Subroto No. 44
Jakarta 12190 - Indonesia
Tel: (+6221) 525 2008
Fax : (+6221) 525 4945
Contact Center : 0807 100 2576
E-mail : info@bkpm.go.id
www.bkpm.go.id
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