Indonesia should build investor-friendly political system: Bappenas

Government

Indonesia should create a friendly environment for investors from developed countries, especially in terms of the political system, official at the National Development Planning (PPN) Ministry and National Development Planning Agency (Bappenas) stated.

The political system here means the regulatory framework for policies between sectors as well as between the regional and sectoral governments.

Existing regulations or policies often did not synchronize and support one another, Scenaider Casein Hasudungan Siahaan noted at the 23th Infrastructure Roundtable (IIR) Seminar T20 Edition on Friday.

Initiated by G20 in 2012, the Think20 (T20) engagement group is independent from national governments and comprised prestigious think tanks and academia from the international community.

This friendly environment is deemed crucial to draw investors, especially those from developed countries, who usually purely invest to gain profits, according to Siahaan.

In addition to the political system, Indonesia should be able to convince investors from developed countries regarding the execution capacity, especially within the scope of infrastructure financing.

Development of the domestic market and domestic investors that are still lacking in Indonesia is also crucial to attract international investors.

Siahaan deems it crucial since not all investors from developed countries are accepting of Indonesia’s environment, especially its political system.

“If they are domestic investors, then they have risk tolerance. They understand Indonesian culture more, especially the domestic environment, primarily politics, within the country,” he explained.

Throughout this time, Indonesia tends to receive funding support from various development partners that have higher risk tolerance toward Indonesia’s investment environment, such as the World Bank and Asian Development Bank, that have representatives within the country.

As a result, they have a broader understanding of the condition in Indonesia, he stated.

In addition, several bilateral institutions provide significant financing support to Indonesia.

However, these institutions tend to have a certain mission in developing countries and do understand the capacity of such nations.

To this end, Siahaan expects that a friendly environment for investors should continue to be developed in accordance with the types of investors that Indonesia is keen to attract.

 

Source: Antara News