Jokowi's Golden Visa Could Pose Risk to Indonesia's Fiscal and Macroeconomic Conditions: Observer

TEMPO.CO, Jakarta - President Joko Widodo or Jokowi has officially launched the Golden Visa Indonesia last Thursday, July 25, 2024. The launch of the policy, which is expected to attract investors to invest in the country, is said to contain risks.

Agus Pambagio, an observer of public policy and consumer protection, said that although it was designed to boost the economy, the Golden Visa could actually pose a risk to a country's fiscal and macroeconomic conditions through rapid economic fluctuations and the emergence of economic bubbles in the property sector.

“There are also security risks such as abuse of residence and business permits, an increase in corruption cases, tax evasion, money laundering, and funding of terrorist groups,” he said in his opinion in the March 5, 2024 issue of Tempo Newspaper, 

In fact, he said, several countries have stopped the Golden Visa policy because the negative impact is greater than the benefits. Those who have abolished this type of policy include Hungary (since July 2018), the UK (February 2022), Bulgaria (April 2022), and finally Portugal (February 2023).

“Later, there was also a call for termination among European Union members due to Russia's invasion of Ukraine,” Agus said.

According to him, in order for the Golden Visa policy to run effectively as intended, the following things must be done by the government:

First, the implementation of the Golden Visa must provide convenience and certainty. One of them is through the submission of one single submission that does not take a long time.

Second, reflecting on several other countries regarding the negative impacts that arise, the government needs to conduct an evaluation within 3-6 months after the implementation of the Golden Visa. The evaluation needs to be done to check whether this policy has significant results on the increase in investment.

Third, the government must also pay attention to the negative implications of the Golden Visa policy practice in other countries, especially in countries that have stopped the policy. The formulation of the Golden Visa policy in Indonesia needs to be done selectively with the precautionary principle and in accordance with the laws and regulations.

“Mitigation measures against the risk of negative impacts of the implementation of the Golden Visa need to be prepared, such as background checking of the applicant and the source of funds invested, as well as preparing a monitoring mechanism for individuals who have obtained a Golden Visa,” he said.

Fourth, the implementation of the Golden Visa policy must be considered so that it is not permanently established. This policy should be discontinued if the evaluation results from the first to third things above show that this policy does not produce the expected results.

HENDRIK KHOIRUL MUHID

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