Bahlil Lahadalia, Chairman, Indonesia Investment Coordinating Board (BKPM): Interview

Interview: Bahlil Lahadalia

Which aims of the proposed Omnibus Law on Job Creation are most likely to benefit investors?

BAHLIL LAHADALIA: The Omnibus Law aims to revise 79 laws that encompass a total of 1244 articles. The confusion caused by overlapping regulations today – in total, there are around 42,000 local and national regulations – is the greatest obstacle to the success of government initiatives. These challenges also have a considerable impact on Indonesia’s ease of doing business. The Omnibus Law will eliminate contradictions in laws and regulations; synchronise government policies at both the central and regional levels to support the investment climate; create a more efficient licensing process; simplify complicated bureaucratic chains; improve coordination between related government agencies; and ensure legal certainty and protection for policymakers.

Why will the role of major global technology and infrastructure leaders be so pivotal to the development of the new capital in East Kalimantan?

LAHADALIA: We are still awaiting the new capital law. The development of a new capital will require a host of supporting infrastructure, both physical and digital. The construction of infrastructure will be crucial to the success of this new city in East Kalimantan – particularly since the government intends to make the new capital a smart city that can support the development of 5G technologies and the operation of the internet of things. Alongside this, the capital will also be a green city, and for this we need the support of companies who are at the forefront of green technologies.

In what ways has BKPM contributed to improvements in Indonesia’s business climate?

LAHADALIA: The Presidential Instruction No. 7 of 2019 on the Acceleration of Ease of Doing Business gave BKPM the mandate to lead efforts to improve the country’s ranking in the World Bank’s ease of doing business index. To that end, we have taken a number of steps and are currently preparing an action plan to help Indonesia improve the ease of doing business. Importantly, we have entered into discussions with ministries, institutions and other stakeholders to inform our action plan.

The plan is based on 11 indicators and is expected to include 17 regulations, 15 of which are ministerial and institutional regulations, and two of which are circular letters. Together, these will create the framework we will implement to ensure complete structural reform and improve the business climate. We will also work to ensure that ministries, institutions and regions implement standards in accordance with the identified indicators, in collaboration with the Cabinet secretary and the Coordinating Ministry for Economic Affairs.

How is BKPM working to create synergy between the public and private sectors?

LAHADALIA: Through Presidential Instruction No. 7 of 2019 on the Acceleration of Ease of Doing Business, all the licensing and non-licensing responsibilities within the ministries and government institutions were delegated to BKPM. As such, moving forward we will oversee all business licensing.

We regularly hold meetings with national and international business associations to hear their input on the current state of doing business and coordinate with the various regions and cities to harmonise existing policies on a local level. We try to act on complaints to improve the quality of services that the government provides to businesses and better integrate our offerings with the needs of the community. Moreover, our Investment Supervision Task Force, in partnership with the Indonesian Attorney General’s office and the police, has been created with the intention to ensure legal certainty.