Friday, July 12, 2024

BKPM, Indonesia’s focal point to bring in investors

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Quality investment at hand

The Investment Coordinating Board (BKPM) is a government agency in charge of implementing policy and service coordination in the investment sector in accordance with the regulations. It was founded in 1973, to replace the previous functions undertaken by the Investment Technical Committee, a government institution that was established in 1968. A primary interface between business and government, BKPM was created to boost domestic and foreign direct investments by creating a conducive investment climate. In 2009, the status of BKPM returned to ministerial status and it reports directly to the President of the Republic of Indonesia. Its goal is not only to seek domestic and foreign investment but also to seek quality investments that may drive the Indonesian economy and absorb manpower. Since October 2021, BKPM has been led by Investment Minister Bahlil Lahadalia.

In 2021, President Joko Widodo officially appointed Lahadalia as the new Minister of Investment based on Presidential Regulation no. 31/2021. The ministry will be the focal point to connect all of the investment sectors from the technical ministries. Connecting business and government, the ministry is responsible for creating a more conducive investment climate for Indonesia.

Achievements:

  • 2014 – Minister of State Apparatus Empowerment and the Bureaucratic Reform of Republic of Indonesia presents the BKPM scored 62.70 in B category with improvement in Achievement of Bureaucracy Reform in Accountability Report of Government Institution;
  • 2014 – Corruption Eradication Commission (KPK) presents award to the BKPM as the second ranked in KPK Integrity Survey at the government level
  • 2014 – Ombudsman Republic of Indonesia presents award to the BKPM the 1st ranked for complying to Public Service Standards pursuant to Law No. 25/2009 about Public Service to infrastructure at the Ministries/Institutions;
  • 2014 – The BKPM achieved the best 6th in category of e-Transparency Award out of 47 Ministries/ Institutions;
  • 2014 – Ministry of State Apparatus Empowerment and the Bureaucratic Reform Republic of Indonesia gives the BKPM scored 71.03 or “B” ranking for Evaluation of Performance Accountability;
  • 2015 – Rating and Investment Information Inc. gives the BKPM grade predicate with BBB- rating;
  • 2015 – Moody’s Investor Service gives the BKPM grade predicate with Baa3 rating and stable outlook;
  • 2015 – Japan Credit Rating Agency Ltd. gives the BKPM grade predicate with BBB rating and stable outlook;
  • 2015 – Fitch Rating gives the BKPM grade predicate with BBB rating and stable outlook;
  • 2015 – Standard and Poor’s presents the BKPM grade predicate with BB+ rating and positive outlook;
  • 2015 – Unqualified Opinion (WTP) on the BKPM’s Financial Report in 2014 from the State Audit Body;
  • 2015 – Minister of Finance Republic of Indonesia presents award to the BKPM for its Participation in Tax Collection;
  • 2015 – Minister of State Apparatus Empowerment and the Bureaucratic Reform Republic of Indonesia presents award to the BKPM for BB Predicate (Very Good) on Performance Accountability Report in 2015;
  • 2015 – On behalf of the Government of Indonesia, the Minister of Finance Republic of Indonesia presents award to the BKPM for its success in preparing and presenting financial statements in 2014 with the highest standard of achievement in the Government Accounting and Financial Reporting;
  • 2015 – Organizer of Indonesia Electricity Show (ICS) 2015 gives award to the BKPM as the Favorite Stand at Indonesia Electricity Show (ICS) 2015;
  • 2015 – Organizer of Jak Invest Expo 2015 gives award to the BKPM as the Best Stand at Jak Invest Expo 2015: Exhibition of Investment Opportunity and Local Superior Products 2015;
  • 2016 – Head of the State Personnel Agency (BKN) presents AWARDS to the BKPM, as the Third Best Winner in the Human Resources Planning Category for the Ministry/Institution Level;
  • 2016 – the Ombudsman Republic of Indonesia gives an award to the BKPM as the 6th ranked in High Compliance Predicate to Public Service Standards pursuant to Law No. 25/2009 on Public Service. The average value of 100 in the Green Compliance Zone;
  • 2016 – Sucofindo International Certification Services gives SNI Certificate ISO 9001: 2008 Quality Management Systems-Requirements which is valid from September 5, 2016, to September 14, 2018;
  • 2016 – Minister of Finance Republic of Indonesia gives award to the BKPM for its Contribution in Non-Tax State Revenue (PNBP);
  • 2016 – National Administration Institute gives award to the Education and Training Center of the BKPM as the Authorize Institution that provides accreditation for technical training on investment;
  • 2016 – Rating and Investment Information Inc. gives the BKPM grade predicate with a BBB- rating;
  • 2016 – Moody’s Investor Service gives the BKPM grade predicate with a Baa3 rating and stable outlook;
  • 2016 – Japan Credit Rating Agency Ltd. gives the BKPM grade predicate with a BBB rating and stable outlook;
  • 2016 – Standard and Poor’s gives the BKPM grade predicate with a BB+ rating and positive outlook;
  • 2016 – Minister of Finance Republic of Indonesia gives award to the BKPM for its Reasonable without Exception Opinion (WTP) achievement for 5 (five) years in arrow the Financial Report from 2011 to 2-15;
  • 2017 – Minister of State Apparatus Empowerment and the Bureaucratic Reform Republic of Indonesia gives the BKPM Scored 74.23 with BB category for the Index of Bureaucracy Reform in the Result of Bureaucracy Reform Implementation.

Performance indicators

In January-September 2020, the number of investments reached IDR 611.6 trillion, with Domestic Direct Investments (DDI) at 50.7% or IDR 309.9 trillion, while Foreign Direct Investment (FDI) at 49.3% or IDR 301.7 trillion. 

In January-September 2021, the number of investments reached IDR 659.4 trillion, with DDI at 49.7% or IDR 327.7 trillion, while FDI at 50.3% or IDR 331.7 trillion.

BKPM has 6 indicators of performance:

1. Execution of Large Investment Realization;

2. East of Doing Business Improvement;

3. Encourage Large Investment to Partner with Local Entrepreneurs;

4. Distribution of Quality Investment;

5. Investment Promotions that are Focused on Sectors and Countries;’

6. Increase Domestic Direct Investment, Especially Small Medium Enterprise SMEs.

Ministry of Investment/BKPM Main Duties

To coordinate policies and services in the field of investment based on the provisions of laws and legislation.

BKPM Functions as Ministry of Investment

  • Analyzing and proposing national investment planning;
  • Coordinating implementation of national policies in the field of investment;
  • Analyzing and proposing a policy of investment services;
  • Determining norms, standards and procedures for the implementation of investment services;
  • To develop opportunities and potential investments in the region by empowering business entities;
  • Creating investment maps in Indonesia;
  • Coordinating promotional activities and investment cooperation;
  • Developing sector on investment through fostered investment among others, promoting partnerships, improving competitiveness, creating healthy competition, and disseminating the broadest information in terms of investment activity;
  • Fostering implementation of the investment, and aiding the completion of various obstacles and consulting problems faced by investors in carrying out investment activities;
  • Coordinating and implementation of one-stop service;
  • Coordinating domestic investors are running the planter investment outside the territory of Indonesia;
  • Providing licensing services and investment facilities;
  • Fostering and serving general administration in the areas of planning, administration, organization and governance, employment, education and training, finance, law, public relations, archiving, data and information processing, and household equipment; and
  • Implementing other functions in the field of investments in accordance with the provisions of the legislation.

Investment Promotion Center

Indonesia Investment Promotion Center (IIPC) is the official representative of BKPM overseas in charge of promoting investment in Indonesia to potential investors abroad. IIPC has the following several duties and functions:

Duties of IIPC:

  • Increasing investment from the State of Domicile and Working Area to Indonesia;
  • Facilitating investment from Indonesia to the State of Domicile and Working Area.

Functions of IIPC:

  • Proactively focus on doing investment marketing campaigns and providing investment information;
  • Do coordination and synchronization of investment marketing program with Indonesia Representatives, a related institution in the State of Domicile and Working Area, as well as Government Institution and business in Indonesia;
  • Facilitate the investment mission from the State of Domicile and Working Area to Indonesia and investment mission from Indonesia to the State of Domicile and Working Area;
  • Facilitate the investment problem solving of new or existing investors and encourage investment realization from the State of Domicile and Working Area that have received a license from BKPM;
  • Monitor the investment interest and policy in the State of Domicile and Working Area;
  • Facilitate Indonesian investors who invest in the State of Domicile and Working Area;
  • Propose the work programs and budget needs in order to accomplish the duties and achieve the investment targets set by BKPM’s Executive;
  • Do other duties given by BKPM’s Executives and Head of Indonesia Representatives in the State of Domicile.

Strategic Roadmaps:

  • Our short-term focus is to harvest the low-hanging fruits of investment in Indonesia, by optimizing the natural resources for greater economic development;
  • The channelling of investment towards infrastructure needs, both hard and soft. Hard includes roads, airports, ports and power-generating capacity, while soft infrastructure includes health services and education;
  • Laying the foundation for industrialization, investment in education and a highly educated workforce;
  • Support the formation of a knowledge-based economy with further development of a globally competitive educated workforce, strengthening policy advocacy and investor role in foreign and domestic.
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