Mr. Heru Budi Hartono

ASEAN Business Leaders: There are certain industries that have seen significant growth including finance, trade, infrastructure, and transport. Can you please elaborate on the main areas that the Indonesian Government is targeting for development?

Heru Budi Harton: The government is focusing to develop infrastructure in Indonesia including the development of remote areas or less developed areas of Indonesia and then from there, Jokowi has the focus to develop the Human Resources of Indonesia. If you ask now about the main focus of the administration is the infrastructure. For example, the focus to develop the airports all over Indonesia in Papua and also in West Java. We are now developing a big airport in North Sumatra, West Sumatra and also Kalimantan and East Nusa Tenggara.

The Government develops the infrastructure so that the economic development rate will be always maintained and after
some time people can feel the benefit of this infrastructure development because in the long run this will be good
assistance for the economic development. For example to create job opportunities and we are building a bridge in that is
connecting people from different villages of Papua, this will make economic development.

ASEAN Business Leaders: How are these infrastructure projects being financed, and does the government welcome foreign investments into infrastructure projects?

Heru Budi Harton: So, the infrastructure development is being carried out by the state-owned companies who are assigned to develop the infrastructure of Indonesia. Then the state-owned companies get the finance from the national banks and the private sector. Foreign investors would invest in Indonesia in the toll road development because this is profitable, but for example toll roads in the areas which have less people living there, this must be carried out by the state-owned companies. JASA MARGA is the state-owned company for the toll road of Indonesia they built the toll road in Jakarta which is very profitable.

There are also collaborations between state-owned companies for example in the toll road development as the contractor.

ASEAN Business Leaders: I have a quote here of Jokowi when he was attending to the G-20 in hamburg. “We want to transform political ties that we have built since 1955 into concrete economic ties by promoting investment, reducing and eliminating trade barriers, and promoting technical cooperation”. In which areas specifically is Indonesia looking to collaborate internationally?

Heru Budi Harton: We have many opportunities in trade cooperation with the international communities. For example the president visited India, Pakistan, and this is actually for the trade cooperation for our CPO to be sold to these countries. For Europe we are also beginning with the EU for our palm oil industry and recently we hosted the Indonesia-Africa summit in Bali. This is also focusing on trade cooperation. We sell Indonesian products to the African market, such as building materials, cement, and more raw materials.

ASEAN Business Leaders: Recently Indonesia global competitiveness has increased the ranked has improved significantly as well as the ease of doing business in Indonesia. What were the achievements to which you contribute this improvement, and what are the challenges that the government is addressing to continue advancing its competitiveness?

Heru Budi Harton: Our competitiveness is getting better because of the synergy of the ministries of Indonesia and this is also the focus of the administration. Now the ministries of Indonesia are working closely with each other. For example, the ministry of industry and ministry of trade are working together to improve our competitiveness. Pak Jokowi is reducing bureaucracy so the people can get the investment / business permit easily in Indonesia.

For the challenges, it is related to the global market, the situation in Europe is making the situation of local businesses not really good as well as the interest rate implemented by the US Fed is one of the challenges. Now we are starting with election time in Indonesia from this year and then next year 2019 in October until the president is inaugurated. The business community has a “wait and see” approach because of this, this is bringing some of the challenges. Pak Jokowi always encourage business communities ‘you don’t have to be afraid, don’t wait and see because we are going to be peaceful here in Indonesia’.

This is the encouragement of president Jokowi to business communities in Indonesia because we are implementing regional autonomy. Pak Jokowi is asking the governors and majors of Indonesia to simplify the permits issuance to make it easier for investment, so the local government should make the permit issuance easy and fast.

There are too many regulations within the local government which make it difficult to the investors, this must change. This is the message of the president and then the president will continue this meeting with the local and regional governments.

ASEAN Business Leaders: The government is negotiating a lot of bilateral trade agreements internationally so the business community is really being pushed in order to take the opportunities. And now still the US is Indonesia’s 2nd biggest trading partner so what is your message of confidence to stimulate/ motivate the business community to continue exploring bilateral trade opportunities?

Heru Budi Harton: The message is not to be afraid or unsure about the situation in Indonesia because we are always maintaining the situation to be conducive for the trade relations or for the investment between and the US. For the next years the situation will also be conducive so we are optimistic for this. So, don’t be unsure about this situation in Indonesia for investment. The president is now also getting into development of sharia economy, the Islamic economy this is also is being focus of the government to develop this.

The sharia economy is being funded by private sector the idea of this development is to empower the people and to promote inclusive economic development. For example, the private sector is assisting this Islamic boarding schools to organize small supermarkets to manage so they can get income from this and experience how to deal with businesses, this is actually the idea.

ASEAN Business Leaders: What is the importance of the maritime development for Indonesia and how is the government improving the management, safety and security so the maritime industry can keep bringing prosperity to its people?

Heru Budi Harton: The development of the maritime sector of Indonesia is focused on development of seaports for sure and then this sea toll in Indonesia is riding well and improving the connectivity between islands of Indonesia. How can Indonesia get maximum output of fisheries because we are having big potential of fisheries. The minister of fisheries said how can we empower the fisherman of Indonesian to export the fishes to Japan and Australia for Indonesia to become the leader in fisheries. It is also important how the banks and the financial sector could assist the fisherman in developing the fish ponds for fish farming, so this is the focus.

ASEAN Business Leaders: What is the importance of Industry 4.0 and what initiatives is the government providing to empower small and medium enterprises so they can be prepared for the coming changes?

Heru Budi Harton: Actually the government of Indonesia is not really prepared for the change brought by the industry 4.0.
For example, in the case of Grab and Uber actually Indonesia is not really prepared for this that’s why the transportation sector in Indonesia for regular taxi operators is being affected by this. And also for the case of airbnb, that provides accommodation without being taxed. This needs to be anticipated so the respective ministries must be aware of these developments and must be ready to anticipate and we need to learn from other countries (for example Singapore) how to deal with this development of the impact of the industry 4.0.

The president also encourages the universities of Indonesia to provide more creative courses/subjects related to this development of industry 4.0. Actually this is the demand of the people to get better services with lower pricing for example in the case of transportation sector there are some taxi operators which are now closed their businesses. Now the government is evaluating how to generate revenues or income from this industry 4.0 which is growing very fast in Indonesia.

For those investors considering to capitalize on the investment climate and business links with the country, they can contact the Indonesia’s Investment Coordinating Board (BKPM), which is the government body to assist investors to fulfill their investments.