Revision of PP Number 5 of 2021: Government's Efforts to Improve Indonesia's Investment Climate

Jakarta, INTI – The government continues to strive for economic success by creating a better investment climate in Indonesia. One such effort is by simplifying business licensing through revising Government Regulation (PP) Number 5 of 2021 on Risk-Based Business Licensing. The Coordinating Ministry for Economic Affairs, along with relevant ministries/agencies, is revising the substantive provisions and attachments of this regulation. Currently, the revision process has reached around 95% and is in the finalization stage.

Process and Objectives of the Revision of PP Number 5 of 2021

Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono Moegiarso, stated that PP Number 5 of 2021 is one of the largest derivative regulations of the Job Creation Law. Through this regulation, the government aims to reform all business licensing processes. One tangible result of this implementation is the issuance of 9.5 million Business Identification Numbers (NIB) through the Online Single Submission (OSS) system.

"It's already very good, but because there are other needs, we will continue to push and review, especially regarding basic licensing and basic requirements. It's not easy to reform basic licensing," said Sesmenko Susiwijono.

Deputy Minister of Investment/Deputy Head of BKPM, Yuliot, who attended virtually in the Public Consultation Forum in Batam City, Riau Islands Province, on Friday (2/08), stated that the revision of this PP also relates to basic requirements such as environmental approvals and building management. This is expected to provide certainty for business actors.

Public Participation and Current Economic Conditions

The government is holding a Public Consultation Forum to involve the public in the revision process of PP Number 5 of 2021. Before being held in Batam City, this forum was also held in various cities representing Eastern and Central Indonesia.

On this occasion, Sesmenko Susiwijono also shared the current economic conditions. Based on various macroeconomic indicators, the government is optimistic that Indonesia's economy will continue to grow above 5% in the second quarter of 2024 with excellent inflation control. This places Indonesia among the few countries with strong economies.

"In terms of investment, I think the realization is very good. Until today, ministries/agencies still regularly receive visits from prospective investors. The Coordinating Ministry for Economic Affairs is responsible for Special Economic Zones, National Strategic Projects, and all other strategic projects, so we know exactly how prospective investors are still very eager to invest in Indonesia," said Sesmenko Susiwijono.

OECD Accession and Regulatory Reform

Although the revision process of PP Number 5 of 2021 has reached 95% and is planned to be harmonized next week for the President's signature, this revision is a dynamic process, and the government is very open to input from the public. This is important as the government is also making efforts to accede as a member of the Organisation for Economic Co-operation and Development (OECD), where Indonesia must comply with OECD standards.

Since July 2024, Indonesia has entered the OECD accession stage. The government is rolling out the second phase of reform, focusing on the implementation of licensing and investment practices. "If the first phase was about the regulations, the second phase is about the practice. We have submitted our application for OECD membership and must comply with all OECD standards. So, this is a parallel path: we amend the derivative regulations of the Job Creation Law, but we also proceed with OECD accession," explained Sesmenko Susiwijono.

Next week, the National Team for Accelerating OECD Accession, consisting of 26 sectors, one of which is investment and business licensing, will be kicked off. This Public Consultation Forum was moderated by the Head of Legal and Organizational Bureau of the Coordinating Ministry for Economic Affairs, I Ketut Hadi Priatna, and featured speakers from various sectors, including the Deputy for Economic Affairs of the Cabinet Secretariat, the Deputy for Investment Climate Development of the Ministry of Investment/BKPM, the Deputy for One-Stop Integrated Service of BP Batam, the Vice Chairman of KADIN Riau Islands Province, and academics from Borobudur University.

Invitation to Attend INTI 2024

As part of the efforts to advance the technology and innovation sector in Indonesia, the government invites the public to participate in the Indonesia Technology and Innovation 2024 (INTI 2024), which will be held at JI-EXPO on August 12-14, 2024. INTI 2024 is the largest technology and innovation exhibition in Indonesia, offering opportunities to learn, network, and explore the latest innovations in the technology field.

"INTI 2024 is a very valuable platform for anyone interested in technology and innovation. Let's take advantage of this opportunity to collaborate and delve into the latest developments in the digital world," invited Sesmenko Susiwijono.

For more information about this event, visit INTI 2024