Day: August 21, 2021

Center for Indonesian Policy Studies (CIPS) researcher Andree Surianta opined that reducing the price of PCR tests will support economic recovery since the COVID-19 pandemic can be brought under control through testing and tracing activities.

“Testing and tracing are only a small component in the complex efforts to control the pandemic. Hence, making the pricing of PCR more affordable is a good step,” Surianta stated during a press release on Saturday.

The CIPS researcher reminded that the pace of economic recovery will hinge on the synergy among all components, such as behavioral changes among members of the public and success of the vaccination program.

The latest data from the Ministry of Finance indicated that testing and tracing were still low, according to Surianta. This was since out of the Rp185.98 trillion budget for COVID-19 handling for 2021, only Rp4.08 trillion was utilized for diagnostics purposes, such as testing and tracing.

“The amount is much smaller than Rp58 trillion allocated for vaccination and Rp59.1 trillion for treatment,” he stated.

Since the demand for PCR tests is now high, Surianta reminded the government to ensure the supply of PCR tests in order to reduce the pricing. It is also necessary to examine bottlenecks in the supply of PCR tests since Indonesia is not in a position to produce its own PCR tests and should import the testing kit from a relatively small number of importers.

He believes that the policy of fixing prices will only be effective if the supply is abundant and all cost components are known to the government.

“If the benchmark price for a PCR test kit is too high, of course, there will not be many consumers interested. However, if it is too low, suppliers can retreat, thereby resulting in scarcity or even creating a black market,” he pointed out.

Surianta suggested that the safest solution lay in augmenting supply by increasing import routes. For the medium and long term, the solution is to attract investment in domestic medical device manufacturers.

 

Source: Antara News

The government will strengthen business supervision even though the licensing process has been simplified with the enforcement of the Job Creation Law, an official from the Coordinating Ministry for Economic Affairs has said.

“We will strengthen surveillance. So permits are made easier, but supervision is strengthened,” expert staff for economic productivity and competitiveness development at the Coordinating Ministry for Economic Affairs, Lestari Indah, said at a webinar in Jakarta on Friday.

Business supervision will also be better than before the Job Creation Act was implemented, she added. At that time, business actors were regulated by more than one ministry and institution so their supervision was not well-scheduled, she explained.

“Sporadic, unclear, unscheduled surveillance or inspections make business actors afraid and become mental barriers for start-ups. It becomes unattractive for investment because it is monitored a lot,” Indah said.

The government will encourage compliance with the application of standard rules in the future, she added.

The government will also open opportunities for third parties to supervise a business, she informed.

Currently, the government has made the Online Single Submission (OSS), the only portal for business actors to apply for business licenses, she said.

The OSS has now been improved to divide applications for business licenses based on risk, she informed. This is expected to make the OSS adapt to dynamic business risks, she said.

“One of the most important, this RBA (risk-based approach) is dynamic. Risks will always change, but they can be mitigated with technological developments so that we can continue to adapt to technology,” she added.

 

Source: Antara News

Coordinating Minister for Economic Affairs, Airlangga Hartarto, has emphasized that the ease of business licensing would encourage more foreign investment to enter Indonesia.

“Indonesia is committed to improving competitiveness and the investment climate through structural reforms by combining 76 regulations into one through the Omnibus Law system in Law no. 11 of 2020 concerning Job Creation,” he said while delivering a keynote speech at a webinar on Friday.

According to Hartarto, the Job Creation Law simplifies business licensing procedures, provides better environmental protection, and makes changes to existing labor regulations. The law has also been recognized by the World Bank as a very positive economic reform program that Indonesia has created in the last four decades, he noted.

To complete the implementation of the Job Creation Law, digital registration and licensing procedures have also been made easier with the launch of the latest version of the Online Single Submission (OSS), which is based on the Risk-Based Approach (RBA), and the shift from the Negative Investment List (DNI) to the Investment Positive List (DPI).

“In this system, the type of licensing will be adjusted based on the risk level of each business. For example, (under this system) MSME licensing procedures are different from large businesses,” the minister explained.

Now, MSMEs, or other low-risk businesses in the private sector, only need a Business Identification Number (NIB) from OSS to start a business, while medium-risk businesses require an additional Standard Certificate, he noted. All permissions are granted in an integrated OSS system, so the process is very transparent, easier, faster, and credible, he said.

The Indonesian government is committed to implementing and supervising the implementation of the new version of OSS in the future, Hartarto said. This is because OSS is one of the important instruments to attract more investment into the country, he added.

“We expect that the launch of a risk-based OSS will improve the investment climate and investor confidence to invest in Indonesia. If investment increases in the end, it is hoped that it will open up wider job opportunities as well,” he said.

The government has issued a Priority Investment List (DPI) in the Presidential Regulation no. 10 of 2021 concerning the Investment Business Sector. The regulation contains DPI which focuses on providing a list of priority business fields or businesses, including National Strategic Projects (PSN), the latest technology, pioneering industries, export-oriented industries, as well as research and development, he informed.

Investors who invest in priority sectors will get fiscal and non-fiscal incentives, he said. From the fiscal side, incentives can be in the form of investment allowances, super deductions, or import duty exemptions, he added.

Meanwhile, from the non-fiscal side, they can be in the form of ease of doing business, ease of licensing for the implementation of business activities, business support infrastructure, and guarantees for the availability of fuel or energy and raw materials, he continued.

In addition, the Indonesian government has established an Investment Management Agency (LPI) to increase, prioritize and optimize long-term investments that will support sustainable development, the minister said.

“The government has allocated US$1 billion in 2020 as initial capital of the LPI and will add another US$4 billion this year to optimize the LPI’s role. Currently, there is also a Sovereign Wealth Fund of around US$3 billion from three countries, namely the Netherlands, Canada, and the United Arab Emirates (which have entered the LPI),” Hartarto said.

 

Source: Antara News