2019 ACCE CCELER LERATIN TING G INFRAST INFRASTRUCTU CTURE E - - PowerPoint PPT Presentation

2019

40

ACCE CCELER LERATIN TING G INFRAST INFRASTRUCTU CTURE E DEV DEVEL ELOPM OPMENT ENT THR THROUGH OUGH INN INNOVATIV TIVE E INVES INVESTM TMEN ENT

• MOCH. RIDWAN KAMIL

WEST JAVA GOVERNOR

FOREWORD

DONI P. JOEWONO HEAD OF BANK INDONESIA REPRESENTATIVE OFFICE FOR WEST JAVA PROVINCE

FOREWORD

NATIONAL ECONOMIC REVIEW

Improving Global Perception

…with recent improvements on corruption perception index and governance indicator

Global l Compe petitive titivene ness Index

Higher rank is better 41 36 45 20 30 40 50 60 70 80 90 Rank nk India Indonesia Philippines

*New Concepts by using the Global Competitiveness index 4.0 which captures the determinants of long- term growth.

Ease of Doing ng Busin iness

Higher rank is better (ranks at the time of annual report publication) 91 72 73 20 40 60 80 100 120 140 160 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Indonesia India Philippines Bulgaria Colombia

World ldwid wide Governa nanc nce Indic icator tors

Higher rank is better

51 29 55 52 41 48

15 20 25 30 35 40 45 50 55 2010 2011 2012 2013 2014 2015 2016 2017

Voice and Accountability Political Stability/Absence of Violence Government Effectiveness Regulatory Quality Rule of Law Control of Corruption

Corruptio uption n Perce cept ptio ion n Index

Higher score is better 38 41 42 36 30 32 34 36 38 40 42 44 2012 2013 2014 2015 2016 2017 2018 Indonesia India Philippines Bulgaria Colombia

Continuous Improvement of Investment Climate

…another leap on Indonesia’s Rank on Ease of Doing Business (EODB)*

• Government efforts to boost business growth through deregulations and de-bureaucratization have been recognized

by the improvement of EODB

• Structural reforms will continue including in the budget and real sectors

* Higher rank is better, EoDB 2019 was published in October 2018

Source: World Bank

Indonesia is Now Fully Rated as Investment Grade Country

Indonesia Remains the Investment Destination of Choice

22,5 25,2 26,3 31,9 32,1 34,2 36,4 36,4 38,5 39,2 39,8 48,1 48,7 58,3 10 20 30 40 50 60 70 Myanmar Taiwan South Korea Philippines Hong Kong Malaysia Australia Japan Thailand Singapore Vietnam Indonesia India China

The Economist: Indonesia ia roun unds out the top five of Asian an economies that can look forward to increase ased investment spending. (Jan anua uary 2019)

31,59 34,47 23,63 27,04 25,01 26,57 31,74 34,61 24,61 27,14 25,79 26,04 31,81 34,69 24,56 28,05 26,17 25,98 5 10 15 20 25 30 35 40 India Indonesia Malaysia Philippines Thailand Vietnam 2018 2019e 2020e

Tota tal Investm tment t / GD GDP (%)

Indonesia ia Enjoys ys Lar arge Investments Relative ive to Peers within in the Region

50 100 150 200 250 300 Billion USD 2018 2017

UNCTAD: AD: Indonesia a is listed d in the top 20 host econo nomi mies based d

• n FDI inflo

lows, , 2017 17 and d 2018 18 (June ne 2019) 19)

(x) = 2017 ranking

3,7 4,4 5,1 5,6 5,8 8,4 8,6 10,0 13,7 28,8 30,4 33,9 37,1 46,2 52,2 0,0 10,0 20,0 30,0 40,0 50,0 60,0 Russia Taiwan Korea Brazil Germany Malaysia Myanmar Philippines Mexico US Indonesia Vietnam Thailand India China

JBIC: Among ASEAN AN countrie ies, Indonesia ia is one of the most preferred plac ace for busin iness investment (November 2018)

% of surveyed who consider each country has promising prospects

Indonesia’s Strong GDP

Strong ng GDP Growth th

%

0,04 3,83 3,27 (2,07) (0,16) 3,74 3,31 (1,73) (0,36) 4,01 3,14 (1,81) (0,30) 4,01 3,19 (1,70) (0,41) 4,21 3,09 (1,69) (0,52) 4,20 5,12 4,94 4,93 5,05 4,82 4,74 4,77 5,17 4,92 5,18 5,01 4,94 5,01 5,01 5,06 5,19 5,065,275,175,185,075,05

• 3,0
• 1,0

1,0 3,0 5,0 7,0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2016 2017 2018 2019 QoQ YoY

Favo vour urable ble GDP Growth th Compar pared to Peers

% 3,3 3,0 3,5 3,6 7,3 7,5 5,2 5,2 6,5 6,6 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 2012 2013 2014 2015 2016 2017 2018 2019* 2020* Bulgaria Colombia India Indonesia Philippines

• Economic growth momentum in Indonesia

was maintained in the second quarter of 2019 despite a backdrop

• f

global economic moderation. The national economy expanded 5.05% (yoy) in the second quarter

• f

2019, relatively unchanged compared with the 5.07% (yoy) recorded in the previous period.

• The latest economic developments were

influenced by increasing domestic demand against a declining external

• sector. Domestic demand has increased
• n the back of rising consumption and

stable investment, although inventories have decreased.

• Meanwhile,

the external sector was weighed down by decreasing exports as a corollary

• f

global economic moderation and fresh fears concerning a potential furtherance of the trade war.

External Balance under Control Supported by Adequate Reserves

Exchange Rate In Line with Fundamentals

The The ru rupia iah con

• ntin

tinues to to move ve in in lin ine wit ith the he curre rrency' y's fu fundamenta tal va value, the hereby reinforc forcin ing exte ternal re resil ilie ience. Point-to- point, the rupiah gained 0.8% in July 2019 compared with the level recorded at the end of June 2019, and by 1.3% compared with the June average in 2019. The stronger rupiah was supported by an influx of foreign capital inflows based on the positive perception of non-resident investors regarding the national economic outlook as well as the attractiveness

• f

domestic financial assets. Mirroring global currency movements, the rupiah depreciated in August 2019, weighed down by global financial market uncertainty as trade tensions between the USA and China escalated, triggering 1.6% (ptp) depreciation or 1.4% on the July average in 2019. As of 21st Aug 2019, the rupiah appreciated 0.98% (ptp) compared with conditions at the end of 2018. Moving forward, Bank Indonesia expects stable rupiah exchange rates in line with maintained market mechanisms. Furthermore, projected currency stability is supported by the prospect of foreign capital inflows to Indonesia on sound domestic economic performance and attractive returns, as well as the favourable impact of looser monetary policy in advanced economies.

Governor : Moch. Ridwan Kamil Vice Governor : Uu Ruzhanul Ulum Capital City : Bandung City Regencies/Cities : 18 Regencies and 9 Cities

Area : 35.377,76 km2 Coordinates : 6o45’S 107o30’E Topography : Lowlands, Mountains, & Coasts Populations : 48,037,83 (2017) Density : 1,358 people per sq km (2017) Productive age : 32.67 million (age 15-64) -2017

• Min. Wage Rate : USD 120.24 – USD 301.56 (2019)

48,03 M 19% 12,9% 13,09% 24%

West Java Area: 35

35,377.76 76 square kilometers.

West Java Total Population: 48

48 milli lion people le or

• r 18

18.1%

• f Indonesia Total

Population. With populat

ation growth ar around 1.34 34% each year, West Java total population in 2021 is

expected to reach 50 50 million people people.

Market Potentials

As the most populous province in Indonesia, West Java offers the biggest potential market, with growing number of middle-class households

Governor : Moch. Ridwan Kamil Vice Governor : Uu Ruzhanul Ulum Capital City : Bandung City Regencies/Cities : 18 Regencies and 9 Cities

Economic Growth of All Provinces in Java National and West Java Economic Growth

In the second quarter of 2019, West Java economic growth rose to 5.68% (yoy). Such growth was stronger than national performance at 5.05% (yoy). West Java growth in this quarter was supported by sharp growth in agriculture, robust growth in trade and retail as well as stable performance in construction sector.

(yoy)

AGRICULTURE MANUFACTURING CONSTRUCTION TRADE & RETAIL

Top Sectors with Highest Contribution to GRDP (as of Q2-2019)

43% 9% 7% 15%

5,68 5,05

0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 I II III IV I II III IV I II III IV I II III IV I II III IV I II 2014 2015 2016 2017 2018 2019 West Java National

13,49

• 0,91

6,87

Q4-2018 Q1-2019 Q2-2019

3,03 5,12 9,79

Q4-2018 Q1-2019 Q2-2019

5,40 6,25 3,33

Q4-2018 Q1-2019 Q2-2019

7,13 7,91 6,61

Q4-2018 Q1-2019 Q2-2019

In September 2019, West Java inflation was under control. It was still within the national target corridor of 3.5±1% (yoy). Inflation of All Provinces in Java West Java Inflation Aggregation

% (yoy)

National and West Java Inflation

3.85 3.39

0,0 1,0 2,0 3,0 4,0 5,0 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 2016 2017 2018 2019

West Java National 3.85 4.32 1.53 4.99

• 1

1 3 5

• 5

5 10 15 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 2016 2017 2018 2019

CPI y-o-y (rhs) Core y-o-y Administered Prices y-o-y Volatile Food y-o-y

% (yoy) % (yoy)

• In September 2019, West Java CPI recorded a

deflation at 0.24% (mtm), decreased compared to infation in the month earlier of 0.39% (mtm).

• Consequently, on annual basis, CPI inflation

stood at 3.85% (yoy), still within the national target corridor of 3.5±1% (yoy).

• CPI inflation remained controlled within the

target as supported by relatively stable AP inflation and very low VF inflation in the midst of relatively high core inflation.

• Since 2014, West Java keeps an outstanding record of positive net exports over the years. Up until the first quarter
• f 2019, West Java foreign trade balance continues to record positive net exports, supported by the strong export

growth and decreasing import growth.

• West Java exports were supported by 5 (five) main sectors which are: Manufacturing, Textile, Electronics, Rubber

and Plastics as well as Automotive.

Growth in Exports of Goods

• West Java export in Q2-2019 decreased by 3.3% (yoy). Its import was

also in downward trend by 3.5% (yoy). These events led to slightly decreasing growth in West Java net export by 3.2% (yoy).

• Based on country of destination, exports to ASEAN countries were in

upward trend, while exports to USA and Europe slightly decreased.

0.36%

• 50%

0% 50% 100% 150% 200%

• 30%
• 10%

10% 30% 50%

I III I III I III I III I III I III* 2014 2015 2016 2017 2018 2019

% (yoy) % (yoy)

Manufacturing Textile Electronics Rubber & Plastics Automotive-rhs

• 20
• 10

10 20 30 40 50 60 I III I III I III I III I III I III* 2014 2015 2016 2017 2018 2019

% (YOY)

Total Export USA Europe ASEAN

4.57

2,0 2,5 3,0 3,5 4,0 4,5 5,0 5,5

• 4
• 2

2 4 6 8 10 I II III IV I II III IV I II III IV I II III IV I II III IV I II 2014 2015 2016 2017 2018 2019 USD Billion USD Billion

Import Export Net Export-rhs

4.234.010,27 (USD 301.56) per month.

Banjar City has the lowest wage with Rp. 1.688.217,52 (USD 120,24) per month.

• f 2019

2.731.081,49 (USD 194.52) per month.

The average minimum wage in West Java for the period of 2019 is around Rp.2,731,081 (USD 194.52) per month. Karawang Regency has the highest wage with Rp.4,234,010 (USD 301.57) per month. Banjar City has the lowest wage rate with Rp.1,688,217 (USD 120.24) per month.

Industrial zones & big cities have the highest wage rate

In IDR In USD* Karawang Regency 4.234.010 301,57 Bekasi City 4.229.756 301,26 Bekasi Regency 4.146.126 295,31 Depok City 3.872.551 275,82 Bogor City 3.842.785 273,70 Bogor Regency 3.763.405 268,05 Purwakarta Regency 3.722.299 265,12 Bandung City 3.339.580 237,86 West Bandung Regency 2.898.744 206,46 Sumedang Regency 2.893.074 206,06 Bandung Regency 2.893.074 206,06 Cimahi City 2.893.074 206,06 Sukabumi Regency 2.791.016 198,79 Subang Regency 2.732.899 194,65 Cianjur Regency 2.336.004 166,38 Sukabumi City 2.331.752 166,08 Indramayu Regency 2.117.713 150,83 Tasikmalaya City 2.086.529 148,61 Tasikmalaya Regency 2.075.189 147,81 Cirebon City 2.045.422 145,69 Cirebon Regency 2.024.160 144,17 Garut Regency 1.807.285 128,72 Majalengka Regency 1.791.693 127,61 Kuningan Regency 1.734.994 123,58 Ciamis Regency 1.733.162 123,44 Pangandaran Regency 1.714.673 122,13 Banjar City 1.688.217 120,24 City/Regency Minimum Wage Rate per Month

*) USD/IDR Exchange Rate per March 1st , 2019: USD 1 = Rp.14.040.00

Depok City

HDI : 80.29% Population : 2.33 million Eco growth : 7.28%

Bekasi City

HDI : 81.04% Population : 3.63 million Eco growth : 5.6%

Bandung City

HDI : 81.06% Population : 2.51 million Eco growth : 7.21%

Cirebon City

HDI : 74.35% Population : 316,277 Eco growth : 6.21%

Tasikmalaya City

HDI : 72.03% Population : 662,723 Eco growth : 5.8%

Sukabumi City

HDI : 73.55% Population : 326,282 Eco growth : 5.43%

Bogor City

HDI : 75.66% Population : 1.1 million Eco growth : 6.21%

WEST JAVA

HDI : 71.30% Population : 48.68 million Eco growth : 5.64%

Data as of December 2018

In the second quarter of 2019, West Java asset growth increased to 9% (yoy) along with increasing loan amount (by location) and relatively stable NPL at around 2.94% (yoy). Moreover, West Java Loan-to-Deposit ratio declined to 91.3% (yoy). Sectors with biggest credit share in West Java are Manufacturing industry as well as Social Services and Construction.

Resume of Banking Indicators – Conventional Commercial Banks in West Java

Rp trillion

Rp trillion 0% 5% 10% 15%

Manufacturing Social Services Construction Trade & Retail Transportation &… Electricity, Gas, and Water Business Services Agriculture Mining & Quarrying

15.5% 12.4% 10.8% 10.1% 9.9% 6.2% 5.9% 2.4% 2.1%

Credit Share by Sector

681.7 9.0% 0% 5% 10% 15% 20% 200 400 600 800 I II III IV I II III IV I II III IV I II III IV I II III IV I II 2014 2015 2016 2017 2018 2019

Asset Growth

Total Asset Growth (rhs) 706.26 2.94 1 2 3 4 200 400 600 800 I II III IV I II III IV I II III IV I II III IV I II III IV I II 2014 2015 2016 2017 2018 2019

NPL Growth

Loan (by Location) NPL (rhs)

%

91.3% 10.1% 6.6% 84% 86% 88% 90% 92% 94% 0% 10% 20% 30% I II III IV I II III IV I II III IV I II III IV I II III IV I II 2014 2015 2016 2017 2018 2019

LDR Development

Loan to Deposit Ratio (rhs) Credit Growth TPF Growth

Resume of Banking Indicators – Sharia Commercial Banks in West Java

In the second quarter of 2019, West Java asset growth significantly increased to 12.9% (yoy) along with increasing finance amount (by location) to IDR35.5 trillion. It was also accompanied by relatively stable NPF at 2.77% (yoy). Furthermore, West Java Finance-to-Deposit Ratio slightly decreased to 85.43% while its SME Share to Total Finance rose to 23,4%.

Rp trillion (%) Rp trillion (%) Rp trillion Rp trillion

23.4% 35.55 13.12 0% 10% 20% 30% 40% 10 20 30 40 I II III IV I II III IV I II III IV I II III IV I II III IV I II 2014 2015 2016 2017 2018 2019

SME Development

SME Share (rhs) Total Finance SME Finance 85.43 35.55 41.61 50 100 20 40 60 I II III IV I II III IV I II III IV I II III IV I II III IV I II 2014 2015 2016 2017 2018 2019

FDR Development

Finance to Deposit Ratio (rhs) Total Finance Total Deposit 35.55 2.77 2 4 6 8 10 20 30 40 I II III IV I II III IV I II III IV I II III IV I II III IV I II 2014 2015 2016 2017 2018 2019

NPF Development

Finance (by Location) NPF (rhs) 52.76 12.9% 0% 5% 10% 15% 20% 25% 10 20 30 40 50 60 I II III IV I II III IV I II III IV I II III IV I II III IV I II 2014 2015 2016 2017 2018 2019

Asset Growth

Total Asset Growth (rhs)

West Java economic growth in 2018 was 5.5%, which was in line with Bank Indonesia projection. In 2019, West Java economic growth is estimated will be in the range of 5.3% - 5.7%. This projection is in line with the increase in investment and household consumption as well as fiscal stimuli from the central Government. West Java inflation in 2018 was 3.54% (yoy), which was still within the national target of 3.5±1%. Moreover, West Java inflation in 2019 is expected to be maintained within the 2019 inflation target of 3.5±1%, supported by strong policy coordination between Bank Indonesia and the central as well as provincial governments. *) Bank Indonesia projection

5.29 5.5

5,7 2017 2018 2019

5.3 – 5.7* 3.63 3.54

3,5 2017 2018 2019

3.5 ± 1

18

19

National Foreign Direct Investment Realization (January – June 2019) National Domestic Direct Investment Realization ( January – June 2019)

No Location Investment Project (USD Million) 1 West Java 3,216.1 5,034 2 Special Territory of Jakarta 1,858.0 6,081 3 Central Java 1,509.7 961 4 Banten 1,049.7 1,984 5 Riau Islands 906.7 828 6 Others 5,646.7 8,475 TOTAL 14,186.9 23,363 No Location Investment Project (IDR Billion) 1 Special Territory of Jakarta 26,652.4 1,556 2 East Java 25,448.9 2,721 3 West Java 20,454.1 2,214 4 Riau 17,316.9 523 5 Central Java 13,517.4 1,564 6 Others 79,443.3 7,302 TOTAL 182,833.0 15,880

22,67% 13,10% 10,64% 7,40% 6,39% 39,80% West Java Special Territory

• f Jakarta

Central Java Banten Riau Islands Others 14,58% 13,92% 11,19% 9,47% 7,39% 43,45% Special Territory of Jakarta East Java West Java Riau Central Java

20 Source: DPMPTSP of West Java Province

No Location

• No. of

Projects Labor Absorption (people) Investment Value (USD) 1 Bekasi Regency 2,345 11,373 1,065,813,500 2 Karawang Regency 784 3,832 816,280,900 3 West Bandung Regency 51 4,426 174,737,100 4 Bandung City 132 4,393 163,921,100 5 Bandung Regency 138 14,099 159,173,400 6 Purwakarta Regency 255 4,885 139,974,400 7 Bekasi City 264 583 130,845,700 8 Cirebon Regency 69 27 125,055,400 9 Bogor Regency 459 1,675 111,486,200 10 Depok City 89 179 108,369,700 11 Indramayu Regency 16 223 88,688,700 12 Cimahi City 29 198 54,677,300 13 Sukabumi Regency 107 11,579 22,733,800 14 Majalengka Regency 25 315 17,573,000 15 Subang Regency 61 127 15,974,700 16 Cianjur Regency 26 70 15,918,000 17 Garut Regency 33 4 3,455,400 18 Sukabumi City 7 736,700 19 Bogor City 42 5 515,900 20 Sumedang Regency 48 83 168,100 21 Cirebon City 8 14 40,700 22 Pangandaran Regency 1 5 6,700 23 Tasikmalaya Regency 21 2 24 Kuningan Regency 17 25 Banjar City 4 26 Ciamis Regency 2 27 Tasikmalaya City 2 TOTAL 5,035 58,097 3,216,146,400

Bekasi Regency 33% Karawang Regency 25% West Bandung Regency 6% Bandung City 5% Bandung Regency 5% Others 26%

TOP 5 LOCATIONS BASED ON FDI VALUE

Top 5 Sectors based on Foreign Direct Investment Value

Automotive and Other Transportations

10.19%

Source: DPMPTSP of West Java Province 21 24

Electricity, Gas, and Water

16.17%

Transportation, Warehouse, and Communication

31.69%

Chemical and Pharmaceutical

6.62%

Residences, Industrial Area, and Offices

14.89%

No Sector

• No. of

Projects Labor Absorption (people) Investment Value (USD) 1 Transportation, Warehouse, and Communication 116 18,027 1,019,109,500 2 Electricity, Gas, and Water 22 46 520,083,700 3 Residences, Industrial Area, and Offices 230 2,514 479,008,100 4 Automotive and Other Transportations 696 2,466 327,710,700 5 Chemical and Pharmaceutical Industries 386 510 212,848,600 6 Food Industries 253 1,154 121,740,700 7 Rubber and Plastic Industries 346 847 120,451,300 8 Non-metallic Mineral Industries 87 690 83,261,600 9 Metal, Machine, and Electronic Industries 888 3,930 66,660,900 10 Other Industries 147 756 65,906,900 11 Paper and Printing Industries 122 746 48,763,100 12 Textile Industries 438 766 48,241,200 13 Trade and Repairs 798 604 39,210,700 14 Leather Goods and Footwear Industries 56 24,383 28,673,200 15 Agriculture and Plantation 40 319 10,353,900 16 Hotel and Restaurant 97 97 6,626,500 17 Other Services 217 126 5,343,800 18 Construction 36 34 5,318,400 19 Wood Industries 28 27 3,973,900 20 Mining 18 43 2,731,100 21 Fisheries 8 9 124,600 22 Forestry 6 3 4,000 23 Medical Instruments and Watch Industries 24 Farming TOTAL 5,035 58,097 3,216,146,400

22

South Korea USD 207.9 million

5

Singapore USD 485.9 million

4

Japan USD 664 million

2

China USD 974.3 million

1

Netherlands USD 530.5 million

3

Total Investment Value USD 3.22 billion (IDR 48.24 trillion) Number of Projects 5,035 projects Labor Absorption 58,097 people

0,0% 10,0% 20,0% 30,0%

China Japan Netherlands Singapore South Korea Others 30,3% 20,6% 16,5% 15,1% 6,5% 11,0%

23 20 Source: DPMPTSP of West Java Province

No Location

• No. of

Projects Labor Absorption (people) Investment Value (million IDR)

1 Bekasi Regency 591 5,457 10,861,743 2 Bekasi City 172 748 3,018,091 3 Karawang Regency 163 1,034 1,638,515 4 Bogor Regency 320 2,333 1,096,810 5 Bandung City 171 507 666,052 6 Subang Regency 20 10 576,016 7 Majalengka Regency 6 32 407,916 8 Depok City 81 64 386,637 9 Bogor City 104 558 290,876 10 Purwakarta Regency 72 560 266,183 11 Bandung Regency 165 1,058 186,038 12 Cianjur Regency 14 2 170,805 13 Garut Regency 53 547 116,137 14 Sukabumi Regency 61 153 110,760 15 Sumedang Regency 22 70 91,752 16 Cimahi City 63 172 17,024 17 Cirebon Regency 35 43 9,550 18 West Bandung Regency 22 14 5,573 19 Indramayu Regency 6 3,532 20 Kuningan Regency 5 48 2,082 21 Cirebon City 43 9 1,481 22 Tasikmalaya City 12 45 350 23 Sukabumi City 9 12 24 Ciamis Regency 2 25 Tasikmalaya Regency 2 26 Banjar City 27 Pangandaran Regency

TOTAL 2,214 13,476 20,454,119

Bekasi Regency 53% Bekasi City 15%

Karawang Regency 8% Bogor Regency 5% Bandung City 3%

Others 16%

TOP 5 LOCATIONS BASED ON DDI VALUE

24

Top 5 Sectors based on Domestic Direct Investment Value

Construction

45.87%

Metal, Machine, and Electronic Industries

9.52%

Transportation, Warehouse, and Communication

9.15%

Food Industries

6.15%

Residences, Industrial Area, and Offices

6.05%

Source: DPMPTSP of West Java Province

No Sector

• No. of

Projects Labor Absorption (people) Investment Value (million IDR) 1 Construction 91 524 9,382,182 2 Metal, Machine, and Electronic Industries 212 2,775 1,947,104 3 Transportation, Warehouse, and Communication 62 520 1,871,261 4 Food Industries 208 630 1,258,413 5 Residences, Industrial Area, and Offices 133 967 1,237,627 6 Other Industries 103 629 1,133,912 7 Electricity, Gas, and Water 41 192 1,073,359 8 Chemical and Pharmaceutical Industries 219 1,345 939,726 9 Non-metallic Mineral Industries 50 1,325 358,136 10 Rubber and Plastic Industries 124 277 260,384 11 Hotel and Restaurant 152 165 255,193 12 Textile Industries 207 1,469 254,500 13 Agriculture and Plantation 48 935 177,830 14 Trade and Repairs 376 891 137,991 15 Other Industries 42 52 96,591 16 Paper and Printing Industries 74 134 36,229 17 Automotive and Other Transportations 44 519 20,270 18 Mining 14 65 10,443 19 Wood Industries 6 62 2,967 20 Leather Goods and Footwear Industries 7 21 Fisheries 1 22 Forestry 23 Medical Instruments and Watch Industries 24 Farming TOTAL 2,214 13,476 20,454,119

25

INVESTMENT INCENTIVES

Investment Incentives to Boost Industry Sector

BUSINESS SS EXPANSION ION

• Tax allowance
• Exemp

mptio tion or relief ief of imp mport duty on capita ital goods, ma machiner ery or equipme ipment for production purposes that can not be produced domestically;

• Exemp

mptio tion or relief ief of imp mport duty on raw ma materials or auxilia iary y ma material for production purposes for a certain period of time and certain conditions;

• Exemp

mptio tion or suspensio ion of VAT on the imp mport of capit ital goods or ma machiner ery or equipmen pment for production purposes that have not been produced domestically for a certain period of time;

• Accelerate deprec

ecia iatio tion or amo mortizatio tion (part of tax allowance); and

• Proper

erty ty tax relief ief, especially for certain business sectors in certain regions;

• Combine with Online Single Submission (OSS)

Tax holiday of corporate income tax in a certain amount and time

PION ONEER EER INDUSTR TRIES IES SPECIA CIAL ECONOMI OMIC ZONE

• No collec

ectio tion of VAT and Luxury Goods Sales es Tax (PPnBM), ),

• Customs

ms tax exemp mptio tion,

• Tax Allowance

e and Tax Holiday, y,

• Suspen

ensio ion of Imp mport Duty,

• 0% Imp

mport Duty for goods produced using local components of a certain level

INDUSTRIA TRIAL ZONE FREE TRADE ZONES AND PORTS MICRO RO, SMALL LL, MEDIUM IUM ENTERPRISES RISES (MSM SMES) ES) E-COMM OMMERC ERCE

• VAT exemp

mptio tion on import or delivery of capital goods,

• Imp

mport Duty exemp mptio tion on machineries/goods/ materials,

• Tax Allowance

e and Tax Holiday Exemp mptio tion of:

• Imp

mport Duty

• VAT
• Luxury Goods Sales

s Tax (PPnBM)

• Customs

ms duty Decrea easin sing g MSMEs Es Tax from 1% to 0.5% of gross revenue

• Sales from customs areas for non

non-sma mall entrepr epren eneu eurs/SE /SE through the market place will be subject to 0.5% income me tax and 1% VAT

• Sales from customs areas for SEs through the

market place will be subject to 0.5% income me tax

New Tax Holiday Policy*

to boost industry sector

Enhancing Business License Service Standard

Presidential Regulation to Accelerate Ease of Doing Business has been launched

Improving Investment Climate

Online Single Submission (OSS) Has Been Launched...

OSS is a web-based business licensing system intended to cut the red tape involved in obtaining business permits and integrated between the central government and regional administrations The Advant antag age e of Using g OSS Business licenses can be secured in under an hour Standardized business licenses are available Electronically integrated The whole licensing process is monitored by the Task Force More practical Accessible at anytime and anywhere

Improving Investment Climate

…Bonded Logistic Center to Improve Indonesia’s Competitiveness

(Pusat Logistik Berikat/PLB) is a facility provided by Ministry

• f

Finance as part

• f

the implementation

• f

the 1st Economic Policy Package. PLB facility aims to improve efficiency and reduce the cost

• f transportation and logistics

in Indonesia; support the growth

• f

the domestic industry, including small and medium industries; increase investment; and to make Indonesia to become a logistics hub in Asia Pacific.

Bonded Logistic Center

To To da date, e, 52 Bo Bond nded ed Logis gistic tic Cent nter ha has been en laun unched hed to to suppo pport variou rious indus dustries ries.

Improving Investment Climate

…revising the Negative Investment List

25

25

INVESTMENT PROJECTS AND EXPORT COMMODITIES