Economist Explains Investment Obstacles

TEMPO.CO, Jakarta - Economist from Samuel Sekuritas Lana Soelistianingsih said that there are obstacles that hinder investment climate in Indonesia. Although Indonesia continues to improve in Ease of Doing Business (EoDB), Indonesia is still losing compared to Thailand and Malaysia, which have entered the 'very easy' category.

Lana asserted that the main factor that continues to hinder investment in Indonesia is the lack of legal certainty. "Although Indonesia's ranking has improves, in reality, businesses and private sector has not experienced the government's commitment in creating legal certainty in investment, the government still needs to make improvements," Lana said in a written statement dated Sunday, August 11, 2019.

Whereas, Lana said that local and foreign investor show increasing interest to invest in the logistic sector. Therefore, Lana asserted that port construction needs to be prioritized by the government.

The Investment Coordination Board (BKPM) recorded that the realization of domestic investment during the January – June 2019 period was increasing by 16.4 percent annually, the figure is higher compared to the realization of foreign investment, which grew by 4 percent. Business sectors with the highest value of realization includes, among others, transportation; warehousing; and telecommunication, which recorded IDR 71.8 trillion of realization value. Meanwhile, the electricity, gas, and water sector recorded a IDR 56.8 trillion of realization value. Construction sector booked IDR 32 trillion followed by the food industry with IDR 31.9 trillion, and housing, undistrial complex, and offices with IDR 31 trillion of realization value.

Previously, PT Karya Citra Nusantara (KCN), one of local businesses owned by PT Karya Tehnik Utama and PT Kawasan Berikat Nusantara (KBN), have received approval to construct pier I, II and III of the Marunda port back in 2005. However, KCN Director Widodo Setiadi, said that because KBN, which is a state-owned enterprise cannot complete the licensing process, KCN later took over the licensing process directly to allow the construction of the port to be completed immediately.

Widodo said that due to the lateness of the licensing process, the construction of the port, which was initially targeted to be completed in 2012 is predicted to be completed in 2023. When the construction of the port starts in 2011, KBN, which holds 15 percent of KCN shares, demanded an increase of their shares to become the majority shareholder and file a lawsuit against KCN for a concession agreement considered to be in violation of the prevailing laws and Regulations.

"We remain committed to finish the construction of pier II and pier III, although unloading activities in pier I is decreasing by 60 percent due to various legal issues we are facing," said KCN Director Widodo Setiadi.

Currently, KCN is waiting for a decision from the Supreme Court of Indonesia for the ongoing legal dispute. Since the beginning of the unrest related to Marunda port, investors involved in the development of ports in Indonesia refused to employ the concession scheme because they were worried that their investment will experience the  same fate as Marunda.

HENDARTYO HANGGI