INDUSTRY.co.id - Jakarta - General Chair of the Industrial Area Association (HKI), Sanny Iskandar is optimistic that Indonesia still has quite good potential for investment, although currently foreign investors are a little wary because this year is a political year.

The statement by the General Chair of HKI was in response to widespread news that currently a lot of investment is coming to Malaysia. "We will wait until November. Currently, Indonesia is facing a leadership transition which positions us at the crossroads of economic transformation. So investors are in a wait and see position," explained Sanny in his official statement in Jakarta (4/10). "Of course we remain optimistic that after the inauguration and new cabinet, future investment can move," he added.

Sanny explained that the industrial area sector, which has been in existence for 50 years, has been able to become the main driver of the economy and a breakthrough regional development model in encouraging the acceleration of inclusive economic growth, where the development of this area is also able to encourage downstreaming, generate added value, increase investment, create fields. work, as well as opening up business opportunities in Indonesia.

Sanny gave an example, citing data from the April 2024 Investment Activity Report (LKPM) from the Ministry of Investment, which noted that West Java Province was still ranked first in terms of investment realization of IDR 64.7 trillion. "West Java is home to more than 30 industrial areas and realizes many manufacturing industries in the automotive, electronics, data center and other sectors," he explained.

Another example is the Riau Islands (Batam, Bintan and Karimun) which is a region with 18 industrial areas, where currently the development of the area there is leading not only to manufacturing in general but also to green industrial businesses with high technology and better energy utilization. .

Quoting data from the Central Statistics Agency (BPS), the economy of the Riau Islands grew 4.90 percent in the second quarter - 2024 (year-on-year). Meanwhile, in terms of the business sector, growth in the third quarter - 2024 was driven by the processing industry category which had a growth share of 5.16 percent. However, Sanny believes that there are still many challenges that must be faced, ranging from trade wars, technological changes, to the need to continue to improve the quality of human resources.

Based on HKI data, currently there are 117 industrial areas in Indonesia spread across 24 provinces. According to Sanny, industrial areas are government agents in bringing in investment. Sanny believes that Indonesia still has to improve, especially in terms of simplifying business licensing. Even though he is currently using a Risk Based Approached (RBA) OSS system, he sees that there are still many obstacles to licensing completion that occur in the field.

"For example, basic things related to the Detailed Spatial Planning Plan (RDTR) must be connected to the system, which is currently still being worked on because in many regions the process of changing regional regulations is in progress," said Sanny. Another challenge is related to guaranteeing legal certainty which also requires synchronization and harmonization between the central and regional governments. Furthermore, regarding the development of basic infrastructure, there is still much that is inadequate with policies that are not pro-investment.

"For example, the availability of raw water sources for industrial activities. Currently, in the West Java area it is very limited even though there are a lot of industries there and need raw water sources," said Sanny. Another challenge is the availability and price of industrial gas which is still an issue. Sanny believes that the Certain Natural Gas Price (HGBT) policy needs to be expanded to the industrial sector, which is currently only being enjoyed by 7 industrial sectors. "Furthermore, for holders of Natural Gas Supply Business Entities (BUPTL), industrial gas prices need to be made competitive," he explained.

What is not even important is related to security disturbances that are still occurring. "For example, the existence of economic waste owned by a certain company has become a trigger for demonstrations in industrial areas. Issues from the aspect of security and order can have a significant impact on the investment climate," stressed Sanny.

Apart from that, he continued, policies are needed that encourage a more attractive investment climate and the development of competent human resources. According to Sanny, investors will invest if a country or region has attractiveness both from a fiscal and non-fiscal perspective, so breakthroughs need to be made through various attractive incentives. "The formulation of this matter can involve business actors in its preparation so that it is more targeted," he concluded.

(SOURCE)