INDONESIA MOVING FORWARD“NEW OPPORTUNITIES IN THE EXCITING TIMES AHEAD”

Saribua SiahaanDirectorate of Regional Promotion FacilitationIndonesia Investment Coordinating Board (BKPM)

Jakarta, 20 November 2019

Globalization in Transition: The Future of Trade & Value Chain

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In 2018, Global FDI flows dropped by 13.4 %

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170 131 147 171 230

299 339 392 385

431 393 284

22 43

61 76

92

128 156

179 216

262 329

284

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q3 2019

FDI DDI

192.3 174.2 208.0246.7

322.6

427.5

494.7

571.5601.7

693.8721.3

601

↑ Y-o-Y 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

FDI -23.10% 12.58% 15.85% 34.99% 29.91% 13.12% 15.79% -1.69% 11.95% -8.99%

DDI 96.21% 39.86% 25.36% 21.29% 39.02% 21.83% 14.95% 20.49% 21.33% 25.25%

2018 Realization compared

with the target:

94.3%

Indonesia’s Investment Realization2008 – 2019 (Jan –Jun)

(Rp. Trillion)

Investment realization in 2018 reached Rp 721,3 Trillion DDI growth reached 25.3% FDI declined -8,8% Factors: political condition (Indonesia’s general election/Pemilu), the trade war which caused investors to “wait

and see”;Source: BKPM, 2019

2018: Indonesia’s Investment Realization was growing but FDI was

slowing down at -8.9%

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Top 10 - Investment Realization in Quarter III 2019 based on Sector

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Source: BKPM, 2019

Human Capital Developmentimprove healthcare, education and vocational training, invite global talent for cooperation, improve digital talent, & raise the endowment Fund

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Infrastructure DevelopmentAccess toindustrial estate and tourism destination as well as improving logistic performance

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Regulation ReformOmnibus Law on Labour and Small, Medium, Enterprises

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Bureaucracy Reform4

Economic TransformationFrom natural resources to manufacturing industry and services

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President Jokowi has stated that for 2020 – 2024, Indonesia will focus on

*) Inauguration of President Joko Widodo and Vice President of Republic Indonesia K.H Ma’ruf Amin , 20 October 2019

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6 Key Performance Indicators (KPI) of BKPM

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Improve the Ease of Doing Business Index

Accelerate the Investment Realization of biginvestment

Support big investors to make a partnership with local company

Ensure the Spread of Quality Investment

Investment Promotion focused on targeted sector and countries

Increase the domestic direct investment realization, especially the SMEs

We are facilitating the 21 projects of potential investment realization

accounted for about IDR 708 Trillion that facing challenges

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17Projects

Investment facing challengesRp 481.5 Trillion

4Big

Projects

Rp 226.5 Trillion

10

4

Investment Plan of Big Projects

708,0RpTrillion

21 Projects

Source: BKPM, 2019

2Projects

Rp 264.3 Trillion

Chemical Industry

Investment facing challenges

3Projects

Rp 152.8 TrillionInvestment Plan of Big Projects

Note:Assumption: 1$ = IDR 14,000

Negative Investment List 2016: More open to foreign investments

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Online Single Submission (OSS), an integrated online system with data

sharing to improve the ease of doing business

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Investment Incentive to Strengthen the Quality of Indonesia’s Human

Resources and Innovation (Regulation (PP) No. 45/2019 & MoF Regulation No. 128/2019 )

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Investment Incentives: New tax holiday policy

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18 Group Sectors Eligible to Apply for Tax Holiday

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Other Investment Incentives

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Mandate of President Jokowi about investment licensing &

fiscal incentives

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President has assigned tasks to the Chairmanof BKPM and affiliated Minister to return allthe investment permit to BKPM.

BKPM has also been given the authority todetermine the Tax allowance and Tax Holidayto investors and to reform its regulations.

President Joko Widodo at Cabinet Meeting 11 November 2019

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Indonesia Investment Promotion Centre (IIPC)

Badan Koordinasi Penanaman Modal (BKPM)Indonesia Investment Coordinating Board

Jalan Jenderal Gatot Subroto No. 44Jakarta 12190 - Indonesia

t +62 21 525 2008 | f +62 21 525 4945 | e info@bkpm.go.id

bkpm.go.id | investindonesia.go.id