Something’s happening in Indonesia. And I for one say it’s something good. Actually it’s not just something, it’s more than one thing; it’s a relaxation on visas and work regulations, tax and amnesties, import duties, property and foreign ownership laws and if you can get past the clutter and confusion thrown out there by commentators hell bent on bringing you bad news you’ll see a bigger picture taking shape. You’ll see that these things are all connected and they’re not just good, they’re very good!
I sat down with Terje H. Nilsen, from Seven Stones Indonesia recently to get his take on the situation and to find out of he too was seeing a bright future. He’s an unashamed supporter of the government’s approach and he aligns the company’s vision with it. “Indonesia is heading in a new direction,” he said. “There have been many initiatives recently which are aimed at making Indonesia an easier place to do business. Hurdles are being removed and the path for future prosperity is being laid. I don’t think I’ve ever felt so positive about our business and where the country is heading.”
President Jokowi has been quoted as complaining in recent times that “we have been shackled by excessive procedures and regulations” and his response has been to proactively break the country free from the chains of a suffocating colonial bureaucracy riddled with corruption as well as the covert control of western dominated agendas, which by the way encourage corruption and all its riddling.
This doesn’t mean Indonesia is anti-western, or protectionist, or particularly high-risk for that matter. Far from it, despite what some observers both here and abroad would like you to think. It doesn’t matter if things are positive, haters still gonna hate. Nilsen doesn’t see these harbingers of doom as a threat, however. “By far the largest challenge for Indonesia in legal terms is the constitution. And that is close to impossible to change,” he explained. “The constitution is very socialist in its intent. We need to understand this means that people are important. They were when it was written in 1945 and they still are today. And bearing in mind it was written at the end of a bloody world war, it shouldn’t come as a surprise that there’s a sense of protecting those same people from the outside forces which occupied, tortured and killed. But things have changed since then, obviously. And now, Indonesia is doing more than any other country on the planet to adapt without compromising its core values which means it still puts its people first.”
It’s time to wake up and smell the Java (pun intended).
The world’s fourth most populous nation is rising from its slumber and the rest of us had better take note. The last quarter of 2015 saw the Indonesian government introduce the first of many economic stimulus packages, specifically designed to boost the local economy and encourage more foreign investment.
“Q4 of 2015 saw a 20% increase in foreign investments from the year before,” says Nilsen as if to prove the point. “Let’s be realistic here; things will take time and there will, of course, be adjustments as plans are rolled out but if we focus on the bigger picture it seems that red-tape is actually becoming a thing of the past. Don’t get me wrong, even in these optimistic and positive times there are still forms to fill and needs to meet, but every country has these. Indonesia is simply suiting up and getting ready to play.”
Reuters via The Jakarta Globe reported on January 21 that the Investment Coordinating Board (BKPM) announced plans allowing foreign investors to take bigger stakes in the tourism sector, especially the ownership of golf courses, health spas, convention centres, hotels, travel agencies and full ownership of bars, cafes, restaurants and sports centres. Currently foreign ownership in these areas is capped between 49%-51%.
“This shows just how serious the government is,” comments Nilsen. “They’re genuinely thinking the whole thing through, realizing that tourism is potentially the country’s biggest foreign exchange earner and if done correctly with expertise and initiatives from leaders in the field like HVS it can be integrated and sustainable and good for all stakeholders involved. Jokowi’s team is pushing the boundaries of how far they can go without stepping on the toes of the constitutional court. It’s exciting times!”
And it’s not stopping there. “Rules for foreign investment in the film industry will also be relaxed,” Triawan Munaf, the head of the creative economy agency, told reporters, with cinemas, film production and distribution, and technical services open to all.
“If you start to join the dots the picture President Jokowi is painting is going to be good for us all,” says Nilsen in closing.
We think he’s right!
If you’d like to learn more about investing in Indonesia get in touch with us today through hello@sevenstonesindonesia.com
