Indonesia's Batam eases business licensing to boost investment

BATAM - JAKARTA. The government has launched one-stop investment services in Batam to help process business permits on the island city, which has been designated as one of the country’s  special economic zones.

The one-stop services are located at a public service mall inaugurated recently by the Office of the Coordinating Economic Minister. 

Susiwijono, a secretary at the Office of the Coordinating Economic Minister, said the clinic would help speed up the issuance of permits related to goods, land, the environment, manpower and immigration.

The facility will be connected to the online single submission (OSS) system, an integrated web-based government licensing service intended to simplify the process of obtaining business permits for companies in various sectors, excluding finance and mining.

The one-stop services are expected to boost investment in the region as difficulties in obtaining licenses often discourage businesspeople, having caused Indonesia to slide to 73rd place on the World Bank’s 2019 Ease of Doing Business Index from its previous position of 72.

“Our difficult task in the past two years has been improving the trade balance, which has been experiencing a deficit. The business clinic is expected to resolve problems often faced by investors to improve the investment climate, which is eventually expected to create a better trade balance,” Susiwijono said.

He acknowledged that leadership dualism between the Batam administration and Batam Industrial Development Authority (BP Batam) had confused investors . He added that the issue would no longer be of a hindrance following the government’s plan to merge the two bodies.

“We don’t want the issue to be a hindrance because the government has decided to appoint Batam’s mayor as the ex-officio BP Batam head,” he said.

Acting as the BP Batam chief is Edy Putra Irawadi, former expert staff to Coordinating Economic Minister Darmin Nasution, who was recently inaugurated by the minister to lead the transition period between the two authorities. 

Darmin previously said the transition period was expected to last until April 30, the deadline for the amendment of a government regulation that would act as the legal basis for the appointment of Batam’s mayor as the ex-officio BP Batam head.

Currently, BP Batam has the authority to issue 62 investment licenses, while the Batam administration 155 licenses.

“We are working toward merging the two authorities’ licensing processes into one system,” Susiwijono said.

Inconsistent policies resulting from the leadership dualism in Batam have been blamed for the decline in economic growth. Batam Deputy Mayor Amsakar said changes in government policies and the dualism had been the cause of the region’s downward trend in economic growth since 2013.

“We want Batam’s economic growth to move back to a positive direction. The public service mall is expected to provide a solution,” he said.

BP Batam chief Edi said Batam’s geopotential should push the government to turn the region into the gateway of Indonesia’s investment services.

“Batam has been developed into an industrial area since 1971 for its geographical nature, so we have the responsibility to continue the development,” Edi said, referring to the island’s proximity to Singapore.

Edi expressed hope that investors would put their trust in the services as a channel to overcome the hurdles they often faced in obtaining business permits.

Batam’s public service is mall is among 500 in the country, managed by city and regency administrations.

The services aim to help improve the country’s investment climate, as difficulties in obtaining permits have often discouraged people from opening businesses, according to a survey conducted by a joint National Development Planning Board-Canadian program.