Remarks by Chairman of BKPM

Transcription

1 Remarks by Chairman of BKPM 3rd Indonesia Investment Forum 2018 Kuala Lumpur, 19 April 2018

2 Indonesia has a large and diverse economy WHERE ON EARTH The largest economy in SE Asia & member of G20 2

3 Indonesia s GDP growth is projected to be ranked 4th in 2050 GDP at PPP Rankings (Projection for 2030 and 2050) 2016 PPP Rank GDP at PPP (bn) 21,269 18,562 8,721 4,932 3,979 3,745 3,135 3,028 2,788 2,737 Country China United States India Japan Germany Russia Brazil Indonesia United Kingdom France Country China United States India Japan Indonesia Russia Germany Brazil Mexico United Kingdom World Bank s Economic Growth Projection Country China Cambodia Philippines Vietnam Laos Myanmar Malaysia Indonesia Thailand Source: WorldBank, Projected GDP at PPP (bn) 38,008 23,475 19,511 5,606 5,424 4,736 4,707 4,439 3,661 3, Projected GDP at Country PPP (bn) China 58,499 India 44,128 United States 34,102 Indonesia 10,502 Brazil Russia 7,131 Mexico 6,863 Japan 6,779 Germany 6,138 United Kingdom 5,369 Source: How will the global economic order change by 2050, PwC, 2017 Indonesia in 2045: Population: 309 million Working age population: 52% Urban population: 75% Middle class population: 80% Income per capita: USD 29,300 Share economu from service: 73% 3

4 Rise of Indonesian Middle Class Mckinsey research shows Indonesian consuming class will grow almost double in 10 years since INDONESIAN MIDDLE CLASS SPENDING ( BILLION) Financial services Food and beverage 73 Leisure 26 Apparel Bellow Consuming class Consuming class Additional people in The consuming class in 5-6% 2030 in 7% GDP scenario GDP scenario Education Transportation Housing and utilities Telecommunication s Beauty and cosmetics Health care Source: Canback Global Income Distribution Database; Indonesia s Central Bureau of Statistics, Mckinsey Consumer and Shopper Insight Indonesia Study, 2011, Mckinsey Global Growth Model; Mckinsey Global Institute analysis 4

5 Achievement of International Recognition (1/2) Investment Grade from International Credit Rating Agencies BBB-/ Positive BB+/ Stable BBB+/ Stable Baa2 / Stable BBB/ Stable BBB/ Stable 5

6 Achievement of International Recognition (2/2) ASEAN Country Country DB 2017 BRIC DB 2018 Country DB 2017 DB 2018 Russia Indonesia China India Vietnam Brazil Indonesia Philippines Lao PDR Singapore 2 2 Malaysia Thailand 46 Brunei 19 Ease of Doing Business Indonesia, BKPM started to enganged in EODB reform since 2014 by assignment from Coordinating Minister of Economic Affairs

7 Invest in Indonesia NOW Most aggressive infrastructure development in Indonesia s history Extra incentive for investments in industrial, tourism and special economic zones Fiscal reform for long term sustainable growth Law reform to ease business and investment Concrete policy for eradication of corruption Citizens trust on the Indonesian Government is at all time high Strong investors confidence to invest further in Indonesia Policies reform in ICT Sectors Source: WorldBank Report,

8 The Year of 2017: Investment Continues to Grow Beyond the Target Investment Realization (IDR Trillion) FDI & DDI Shares, FDI DDI. %. %. %. % (in %, IDR) DDI 35% (Rp 942T) FDI 65% (Rp 1.770T) growth growth % % DDI Realization in 2017 compared to its target: 102.1% Source: BKPM, (Target) Africa [PERCEN TAGE] America 9% Europe 11% Y-o-y 21.3% FDI 8.5% Total 13.1% Australia & Pacific 1% [CATEGO RY NAME] 61% *DDI and FDI accumulation,

9 Investment Still Centralized in Java, but Bali & NT Records Highest Growth Investment Distribution, (Rp Trillion) 15% 13% 8% Sumatera (271) Kalimantan (223) Sulawesi (140) 54% Jawa (949) 4% 7% Papua & Maluku (123) Bali & NT (63) Investment Growth, 2017 (y/y) 43% 19% 14% 10% 2% Sumatera 0% Jawa *Note: based on internal BKPM calculation method Source: BKPM, 2018 Kalimantan Sulawesi Bali & NT Papua & Maluku 9

10 In the last 5 years, Investment has Created more than 7 million jobs, with FDI Contributes to 61%, mostly from Asia. IDR 2,713.3 T. Investment 7,260, ,414 Additional jobs Projects Top-10 Investment per Sector No. Sector 1. Mining 3,781 Metal, Machinary and Electronics , Electricity, Gas and Water , , , , , , Crops & Plantation , Paper and Printing Chemical and Pharmaceutical Transportation Equipment 5. & Others Food Industry Transportation, Warehouse & Telco Real Estate, Industrial 8. Estates 7. Japan Malaysia USD 34.03B USD 20.69B USD 7.89B 15,422 9,673 4,461 projects Source: BKPM, 2018 projects projects United States China USD 7.78B 1,637 USD 7.75B 5,075 projects projects Proj Singapore Inv. (IDR T.) 10

11 Investment from Malaysia is Rising USD 1.2 B +8.8% Malaysia s investment realization in 2017 compared to in , , % 2016 Rank Total Malaysia s investment realization in % 52.1 % 2017 Sectors Transport, warehouse and Telco Chemical and Pharmaceutical Food crops and plantation Food industry Trade and repair Other Sectors Total Investment Value ,213.6 Y-o-y 1,005.8% 45.5% 55.7% 67.4% 456.6% 8.8% % of total 28.2% 13.1% 10.3% 10.1% 9.2% 29.1% 100.0% Top-5 Investment Sectors Malaysia s Investment Realization in 2017 (USD million) Source: BKPM,

12 Indonesia s priority sectors for investment Infrastructure Energy, transportation, industrial estates, SEZs Maritime Manufacturing Industry Including fisheries and cold storage Labor Intensive Industry e.g: textile, garment, furniture, etc Agriculture Export Orientation Industry e.g: automotive, electronic, machinery, etc Import Substitution Industry e.g: pharmaceutical raw material, petrochemical Value added Industry Tourism New Bali Lifestyle Industry The new big deal e.g: creative economy, digital industry e.g: agro-industry, smelters, etc 12

13 Int l tourists arrival grew at +25%, investment in tourism up +45% Indonesia Annual investment growth in tourism in SE Asia surpasses Asia, Int l Tourist Arrival +22% Investment realization* in Tourism +47% (estimation) Source: WTTC, 2016 IDR22 T 14.0m 11.5m IDR15 T Source: Ministry of Tourism & BKPM, 2018 * KBLI 5511, 5512, 5513, 5519, 5590, 5610, 5621, 5629, 5630, 6812, 7911, 7912, 7991, 7999, 9321, 9322, 9323, 9324, 9329 * Exchange rate 2016: IDR 13,900; 2017: IDR 13,400 13

14 Tourism is the next big thing : 10 New Bali Tourism: The industry of 21st century 10 National Strategic Tourism Areas SEZ Kelayang Cape Toba Lake SEZ Lesung Cape Bromo Tengger Semeru Seribu Islands SEZ Mandalika Komodo Borobudur SEZ Morotai Wakatobi 14

15 Indonesia is home for >100 million internet users Internet Users mn new users between 2017 & (No. of people, millions) 38.2 Internet Penetration % 29% 34% 39% 43% 46% 50% 53% (% of population) are actual figures, are forecast. Source: McKinsey&Company, Statista, population data from World Bank 9

16 Indonesia aims to be the center of digital economy in SE Asia in 2020 E-Commerce Financial Technology (Fintech) Potential of Transaction in Indonesia: bn bn bn 14.5bn Transaction in Indonesia 2016 (projection) Nominal of transaction per population 2014 Players Players On Demand Services Internet of Things (IOT) Mobile social users 92.0mn in 2017 Market opportunity in Asia Pacific Players Players Internet users mn in bn 583bn Source: Ministry of Communication and Informatics RI, Tech in Asia, IDC, Daily Social, Bank Indonesia, Statista, Idea, World Bank 16

17 Investment in Indonesian start ups reached 4.93 billion in billion Investment from Softbank & Didi Chuxing 1.2billion Tencent is the largest investor 1.1billion Alibaba is the largest investor 0.5billion JD.com is one of the largest investors 0.1billion Acquired by Grab 22million Indonesian 4th unicorn, after Gojek, Tokopedia and Traveloka 3.2million Indonesian 1st start up registered in the stock market - Acquired by Blibli.com (Djarum Group) Source: Bisnis Indonesia, Jan

18 Most of Manufacturing Industries are Open 100% for FDI 100% FDI Waste Recycling Industry 100% FDI 100% FDI 100% FDI Textile Industry Automotive Industry Smelter & Steel Industry Source: Negative List of Investment (Presidential Regulation No. 44 Year 2016) 18

19 To Support Manufacturing Industry Development, 47 Industrial Estates with Direct Constructions (KLIK) Facility Have Been Developed Riau Islands Batamindo Industrial Park Bintang Industriall Park II Kabil Integrated Industrial Park West Point Maritime Industrial Park Bintan Inti Industrial Estate North Sumatra KI Medan Riau KI Dumai KI Tanjung Buton South Sulawesi KI Bantaeng KI Makassar West Sumatera KI Padang Banten Modern Cikande Industrial Estate KI Wilmar Krakatau Industrial Estate Cilegon Millenium Industrial Estate East Kalimantan KI Kariangau Yogyakarta KI Piyungan West Java KI Kota Bukit Indah Ind. City Bekasi Fajar Industrial Estate KI Indotaisei Kota Bukit Indah DKI Jakarta KI Delta Silicon 8 East Jakarta Industrial Park Kawasan Berikat Nusantara/KBN Karawang Internasional Industrial City Bekasi International Industrial Estate KI Jakarta Industrial Estate Suryacipta City of Industry MM 2100 Industrial Town Pulagadung/JIEP GT Tech Park KI Terpadu Indonesia - China Artha Industrial Hill KI Kujang Cikampek KI Marunda Center KI Lion KI Greenland International Industrial Cibinong Center Industrial Estate Blue font: Phase 1 Center (GIIC)/Deltamas KI Rancaekek Green font: Phase 2 KI Jababeka Tahap III Central Java KI Kendal KI Bukit Semarang Baru KI Wijayakusuma KI Demak Tanjung Emas Export Processing Zone East Java Java Integrated Industrial & Port Estate KI Maspion KI Tuban Safe N Lock Industrial Estate Red font: Phase 3 19

20 To boost investment, BKPM keeps innovating BKPM has eliminate Principle License (Izin Prinsip/IP), now becomes Investment Registration (Pendaftaran Investasi/PI) From 3 days to 1 DAY ±40% KBLI can DIRECTLY apply for Business License DOCUMENT DIGITALIZATION 20

21 BKPM has simplified and strengthened its one-stop service Licensing process for Foreign, Across Provinces, and Strategic investments: 1 Investment Registration 2 Business Incentives 4 Business License BKPM BKPM BKPM 30% discount Tax & other incentives application 3 Formerly In-Principle License Operating Permits At line Ministries & Local Governments Business kickstart CONSTRUCTION PHASE Source: BKPM 21

22 Government develops Online Single Submission (OSS) for investment: From Service to Monitor & Facilitate Monitoring Leading Sector Task Force Licenses Application Monitoring National Task Force Licenses Investors One-Stop Service Licenses Integrated online system with data sharing Supporting Task Force Monitoring 22

23 New Tax Holiday Scheme Existing Changes (MoF Regulation No. 159 of 2015) (MoF Regulation No. 35 of 2018) Subject New Taxpayer New Investment Reduction rate % 100% Provisions (single rate) No. Time Period Time Period Investment Value 1. 5 years IDR 500 billion up to less than IDR 1 trillion 5-15 years 2. 7 years IDR 1 trillionup to less than IDR 5 trillion extended up to 20 years subject to approval from Minister of Finance years IDR 5 trillion up to less than IDR 15 trillion years IDR 15 trillion up to less than IDR 30 trillion years Minimum IDR 30 trillion Transition time Not regulated 50% for 2 years Industry coverage 8 Pioneer Industries 17 Pioneer Industries 23

24 THANK YOU LETS INVEST IN INDONESIA follow us on Badan Koordinasi Penanaman Modal (BKPM) Indonesia Investment Coordinating Board BKPM INDONESIA bkpm Invest Indonesia Indonesia Investment Coordinating Board bkpm_id 24