OECD Investment Policy Reviews
Building on the achievements since the first OECD Investment Policy Review of Indonesia a decade ago, this 2nd Review presents an assessment of the investment climate in Indonesia to support the government in its ongoing reform efforts.
| Autor principal: | |
|---|---|
| Formato: | Libro electrónico |
| Idioma: | Inglés |
| Publicado: |
Paris :
OECD Publishing
2020.
|
| Materias: | |
| Ver en Biblioteca Universitat Ramon Llull: | https://discovery.url.edu/permalink/34CSUC_URL/1im36ta/alma991009704824706719 |
Tabla de Contenidos:
- Intro
- Foreword
- Abbreviations and acronyms
- Executive summary
- 1. Assessment and recommendations
- Introduction
- Overview of Indonesia' development path
- Democratisation and decentralisation have progressed albeit not without challenges
- Until the pandemic, economic growth had been solid and steady
- The manufacturing sector has been steadily declining as a share of GDP, but there is a gradual shift from the extractive industry to services
- Continued growth has reduced poverty, but improving the quality and competitiveness of human resources is necessary
- Improving the business environment stands high on the government's agenda
- The government seeks to addresses infrastructure gaps impeding business environment improvements
- Despite a recent reduction of the deforestation rate, pollution and deforestation still threaten sustainability
- FDI has played an important role in Indonesia but can further contribute to sustainable development
- Indonesia has the potential to be a key FDI destination in ASEAN, but investment climate reforms will make it more competitive
- FDI contributes to sustainable development but its impact can be enhanced
- Key findings and recommendations to improve Indonesia's investment climate
- Indonesia's approach towards FDI needs to be more open
- Main policy recommendations
- Indonesia's investment protection and dispute resolution have improved but need further reforms to build investor confidence
- Main policy recommendations for the domestic legal framework
- Main policy recommendations for investment treaty policy
- Embracing promotion of responsible business conduct can lead to far-reaching and strategic successes in attracting FDI and promoting a more sound and sustainable investment climate
- Main policy recommendations on responsible business conduct.
- Investment promotion and facilitation measures are a key component of Indonesia's recovery from the COVID-19 crisis and need to be scaled up
- Main policy recommendations on investment promotion and facilitation
- Main policy recommendations on tax incentives for investment
- Decentralisation comes with opportunities and challenges on the investment climate and regional development
- Main policy recommendations
- References
- Notes
- 2. Trends and impacts of FDI in Indonesia
- Summary and policy directions
- Main policy directions
- FDI can support Indonesia's sustainable development agenda
- Boosting productivity
- Creating more decent jobs, improving skills and enhancing gender equality
- Transition to a low-carbon and energy efficient economy
- FDI trends
- Recently FDI as a share of GDP has fallen
- Greenfield investment dominates manufacturing, while M&
- A deals prevail in the primary and services sectors
- Manufacturing FDI accounts for the largest share but is declining
- The bulk of FDI to Indonesia originates in Singapore and Japan
- FDI qualities
- Foreign firms generate significant direct economic effects
- Foreign firms favour GVC integration of Indonesia
- FDI supports productivity gains within the economy
- FDI is prevalent in sectors that are more productive
- Indonesian firms may lack capacity to benefit from FDI positive spillovers
- Business linkages with foreign firms are significant
- FDI has mixed effects on labour market outcomes
- Foreign firms operate in sectors with higher wages and pay their employees more
- Foreign and domestic firms do not differ systematically in their skill intensity
- Foreign firms operate in male-dominated sectors but are more gender-inclusive
- FDI affects environmental targets in contrasting ways.
- FDI goes to more polluting sectors, but foreign firms are more energy-efficient
- FDI in renewables is low but growing
- References
- Annex 2.A. Methodology of calculation of indicators Type 1 and 2
- Indicator Type 1
- Indicator Type 2
- Notes
- 3 Re-thinking Indonesia's FDI regime
- Summary and main recommendations
- Main policy recommendations
- Why do barriers to FDI matter for Indonesia?
- Despite significant liberalisation in the past, Indonesia's foreign investment regime remains quite restrictive
- Discriminatory measures against foreign investors harm domestic consumers, as well as firms in downstream industries
- Foreign equity restrictions are the most prevalent type of barrier to FDI, but other operational measures are unusually pervasive in Indonesia
- Stringent local content requirements in some sectors add to the hurdles of carrying foreign investments in Indonesia
- The Omnibus Law on Job Creation: market access issues for consideration
- Ambitious reforms are needed to bring Indonesia closer to ASEAN levels of FDI openness
- The impact of substantial FDI reforms can be sizeable
- Keeping the 'achievements' of the 2007 Investment Law
- References
- Annex 3.A. Technical Notes
- Shift-share decomposition of Indonesia's FDI inward stock growth, 2010-18
- Trends in horizontal and vertical FDI in Indonesia: 1997-2017
- Services FDI restrictiveness impinging on manufacturing activity
- Annex 3.B. Selected sample of local content requirements in Indonesia
- Notes
- 4 Investment protection and dispute resolution
- Summary and main recommendations
- Main policy recommendations for the domestic legal framework
- Main policy recommendations for investment treaty policy
- Investor protections under the Investment Law.
- Significant strides towards a reliable land administration system but more could be done to clarify ambiguities in land tenure rules
- Land tenure rules
- Land titling and administration
- Further progress is needed to improve the protection and enforcement of intellectual property rights
- Some incremental reforms have improved the court system but bold action may be needed to address long-standing concerns
- And many investors continue to prefer arbitration and other forms of alternative dispute resolution to litigation
- Sustained momentum is needed to improve the regulatory climate supporting the digital economy
- Ongoing efforts to tackle corruption, reduce bureaucracy and improve the regulatory framework for investors
- Indonesia's investment treaties
- Treaty coverage for Indonesia's inward and outward FDI stock
- Developments since the first OECD Investment Policy Review
- Treaty use: ISDS claims under Indonesia's investment treaties
- Indonesia's investment treaty policy
- Vague provisions referring generally to "fair and equitable treatment" generate serious risks and costs, and should be addressed where possible
- Most-Favoured Nation treatment provisions in Indonesia's investment treaties may have a range of unintended consequences
- Indonesian treaties generally do not clarify the notion of indirect expropriation
- There are relatively few specifications or clarifications for investor-state dispute settlement (ISDS) provisions in Indonesia's investment treaties
- Other possible aspects of investment treaty reform
- Clearer specification of investment protection provisions would help to reflect government intent and ensure policy space for government regulation
- Investment treaties can be used as tools to liberalise domestic investment regimes
- Addressing the unique approach to claims for reflective loss in ISDS.
- Opportunities for investment treaties to address investor responsibilities
- Evaluating overlaps between investment treaties
- Evaluating overlaps between investment treaties and domestic law
- Developing approaches to prevention of ISDS claims and ISDS case management
- Procedural considerations: exit and renegotiation
- References
- Annex 4.A. Summary of Indonesia's investment treaties
- Notes
- 5 Promoting and enabling responsible business conduct
- Summary
- Main policy recommendations on responsible business conduct
- Scope and importance of responsible business conduct
- From risk to resilience: RBC and COVID-19
- Indonesia has historically promoted social responsibility in business operations
- COVID-19 has placed Indonesia at a critical juncture in its economic and social progress
- Benchmarking sustainability efforts with international RBC standards can lead to more clarity in the market and promote trade and investment
- Integrate explicit references to RBC in key ongoing strategies and efforts
- Reframing the conversation around existing business operations
- Accelerate efforts on RBC in the financial sector
- Giving a signal to the market by directing SOEs on RBC and ensuring future growth does not exacerbate existing challenges
- Leading by example to ensure that infrastructure and connectivity efforts are sustainable
- Fighting corruption and promoting business integrity
- References
- Notes
- 6 Investment promotion and facilitation in Indonesia
- Summary and main recommendations
- Main recommendations on investment promotion and facilitation
- Main recommendations on tax incentives for investment
- Overview of the institutional framework for investment promotion and facilitation in Indonesia
- BKPM as the main national IPA: benchmarking and analysing its characteristics
- Key organisational features.
- Scope and diversity of BKPM's mandates.
