Indonesia has now become a favorite country of investment destination, due to its large population, rising purchasing power with potential bonus of demography, and abundant natural resources, have made Indonesia attractive for investments. It is no wonder, it has been continually seeing increasing investments.
There has been, of course, a long road before reaching such a condition. It has been 45 years now the Indonesia Investment Coordinating Board (BKPM) acting as the driver of the
investments in Indonesia. The investment policy in Indonesia was started after the issuance of Law No.1/1967 on Foreign Direct Investments (PMA). At that time, the New Order government set up an institution named Foreign Investment Advisory Board, One year after, the government issued law No.6/1968 on Domestic Direct Investment (PMDN), and established a new institution called Technical Committee on investment (PTPM) based on the presidential decree (Keppres) No. 286/ 1968.
Since then, the investment institution has been changing for several times until the year 1999, when the BKPM changed name to the Investment Coordination and State-Owned Enterprises (BUMN) Development Board (BPM-PBUMN), which was led by a minister in charge of investment and BUMN. Since 2002, the BKPM was back to non-ministerial institution (LPND), which is led by a leader directly responsible to president.
To accelerate the economic development, realize Indonesia’s political and economic sovereignty, and to deal with the global economy, the government issued the law No.25/2007 on investment. It was aimed to create a more conducive climate for investments, more certainty, fair and efficient.
The investments had proven to have pushed up Indonesian economy. A year after the application of the Law 1967 (UU PMA 1967), Indonesia’s economic growth reached 10.9 percent. In 1970, Indonesia managed to reduce inflation up to below 10 percent.
Of course, after 45 years of opening the investments, there have been ups and downs, due to domestic social and political conditions and global condition. For example, the political crisis in 1998 had caused Indonesian economy drop and investment stagnant. After the crisis of 1998, or post-reform era, the investors were still reluctant to invest in Indonesia as the social and political condition was not yet stable.
But the BKPM has been always taking actions quickly to attract again investments by intensifying coordination with other institutions and pushing for more friendly regulations. Through a good marketing strategy, BKPM managed to convince the investors that Indonesia is the right choice for investments. Its efforts, then, paid off as proven by the fact that Indonesia has been increasingly attractive for investors.
BKPM has played a significant role as the main intermediary between businesses and the government to encourage direct investments, local and foreign ones, through its efforts of
creating conducive condition for investments. Although it has seen a series of changes, BKPM still maintains the same vision and mission to promote the investments in Indonesia and serve all investors who want to invest in the country. BKPM will keep its strong commitment to serve the public services professionally and business-friendly.
During the last 45 years, BKPM has taken various innovations and breakthroughs to realize its vision as set in Indonesia’s constitution, which is to realize conducive but competitive investment climate to support the quality economy of Indonesia.
Since 2017, BKPM has two formal websites: http://www.bkpm.go.id/ and http://www.investindonesia.go.id/. The website bkpm.go.id focuses on providing information on the institution of BKPM which manages investment activities in Indonesia. The website investindonesia.go.id focuses on providing information on promotions of investments in Indonesia.
To maximize its licensing service quality under the integrated One Stop Service Center (PTSP), on July 3, 2017, BKPM made innovation by implementing digitalizing its services. Currently, all data, archives, licensing process have been managed under the digitalized system. Also, BKPM has been active in communication with the public through Facebook, Twitter, YouTube, Instagram, and LinkedIn, which are managed professionally.
BKPM has also won a number of awards for its achievement in managing investment activities. The latest one in 2018, BKPM won several awards, which include “Top 99 Inovasi Pelayanan Publik” for its fast innovative services. It also contributed to the improvement of Indonesia’s debt rating. Standard and Poor’s has given Indonesia the rating of investment grade with BBB- (stable). Japan Credit rating agency also gave the investment grade of BBB/BBB+. Then Moody’s raised its credit rating from Baa3 (positive) to Baa2 (Outlook). (*)