City Efforts to Fix Economy and Investment In the Last Five Years

In the last five years, the wheels of the economy around the world, including the city of Jakarta, have not been easy. The Covid-19 pandemic, which began in the first quarter of 2020 until now, when the war broke out between Russia and Ukraine, has put pressure on the economy and the threat of a recession. This certainly affects investment growth.

Alhamdulillah, all of this does not deter our steps to continue to rise

“We are faced with an unexpected extreme condition, where the pandemic that has paralyzed us for 2 years. Alhamdulillah, all of this does not deter our steps to continue to rise and move in realizing the progress of Jakarta, which is just and capable of being equal to a global city," expressed Jakarta Governor, Anies Baswedan, as quoted by Jakarta PPID's press release, Sunday (10/8).

Jakarta Introduces Collaboration Concept at Asian Smart City Conference Malaysia

The Jakarta administration always maintains the investment climate in Jakarta, thus it remains safe and comfortable for investors. For business licensing, the administration has made adjustments to the Job Creation Law in the Governor's Regulation regarding licensing, digitizing technical recommendations to the JakEvo application in licensing services, 100% automation of online licensing, as well as activating a licensing system that adapts and integrates with Online Single Submission (OSS).

Several breakthroughs were made to increase the value of an investment in the city of Jakarta, such as providing licensing and non-licensing assistance services; facilitating problems faced by investors; holding an International Business Forum through the Jakarta Investment Forum (JIF); actively participating in other international business forums, such as the InSight Investment Webinar Series in collaboration with IIPC Singapore, the Indonesia-Japan Virtual Business Forum (IJBF), and participate in the World Expo Dubai 2020; then actively offer potential projects to investors.

Economy Starts to Recover

Despite being shocked by the pandemic storm and the threat of a global recession, Jakarta's fiscal capacity has continued to grow and strengthen. Based on the SMART Jakarta APBD and the 2022 Jakarta Bylaw on the 2022 Jakarta Regional Revenue and Expenditure Budget (APBD), in the two years after the pandemic, Jakarta's APBD revenues and Jakarta's Original Regional Revenue (PAD) grew again, and strengthened at 44.2% and 46, respectively. 2%.

Based on data from the Central Statistics Agency (BPS), Jakarta's workforce rose the fastest after becoming a province affected by the pandemic. When the pandemic struck, the unemployment rate in Jakarta rose sharply, namely February-August 2020 the unemployment rate increased by 5.8%. However, two years later, in the range of August 2020-February 2022, the unemployment rate in Jakarta fell by 2.95%. With this figure, Jakarta is leading the recovery of the unemployment rate.

Jakarta Regional Owned Enterprises (BUMD) are always encouraged to develop and grow. For 4 years, BUMD owned by the administration grew healthy with asset growth in 2017 reaching Rp 119 trillion, while it grew to Rp 159 trillion in 2021.

Faster Permissions

Proposing permits in Jakarta becomes faster and more certain because based on the Instruction of the Jakarta Regional Secretary No. 100/2021, the permit issuance process is no later than 57 days. In practice, the permit issuance process can be faster than 57 days. Before this regulation, the processing of a Building Permit (IMB) in Jakarta reached 365 days or about 1 year.

As quoted by Jakarta Investment and One-Stop Integrated Service (DPMPTSP), in the 2018-2019 period, an average of 4,000 IMBs were issued per year. However, in the 2020-2022 period, an average of 9,000 IMBs are issued per year.

Win Investment Realization Award

The Jakarta DPMPTSP received an award from the Ministry of Investment or the Investment Coordinating Board (BKPM) of the Republic of Indonesia for its 2021 Investment Realization Achievement. This award is given by the Ministry of Investment/BKPM to the Regional Government which has made a major contribution to the achievement of Investment Realization in Indonesia in 2021.

Throughout 2021, the Investment Ministry/BKPM noted that there were 34,739 investment projects in Jakarta. The number of these projects is the largest in Indonesia. Based on a report released by the Ministry of Investment/BKPM, the realization of investment in Jakarta from January to December 2021 amounted to Rp 103.3 trillion, consisting of realized foreign investment (PMA) of USD 3.3 billion or equivalent to Rp 48.6 trillion, and realization of Domestic Investment (PMDN) of Rp 54.7 trillion.

As for the realization of investment until the first semester (January-June) of 2022 reached Rp 80.5 trillion. Meanwhile, the investment target in 2022 is Rp 124.5 trillion which is projected to be achieved.

PMDN Scores Highest Record

Based on BPS data, Jakarta's PMDN rate has grown rapidly in the last 5 years. The increase in the last 5 years when compared to the previous 11 years, on average was >500% or more than 6 times. Even, for the first time in the history of Jakarta's PMDN value, it was the highest in Indonesia, namely in 2019 with a value of Rp 62 trillion. The value of PMDN strengthened again in the following year after the Covid-19 pandemic.

The administration keeps opening up investment opportunities and invites investors who want to invest in Jakarta to make green investments as a sustainable and sustainable city development initiative. With the presence of the Jakarta Investment Center and the Jakarta Investment Forum, they facilitate potential investors in exploring business opportunities and cooperation, as well as bringing together potential investors with Regional-Owned Enterprises (BUMD) project owners and related government parties.

This year, there are 15 environmental-based city development investment projects offered to investors, including the Intermediate Treatment Facility (ITF) Sunter, LRT Jakarta Phase 2A (Jakarta International Stadium-Rajawali), MRT Phase 3 (East-West), Transjakarta Electric Bus, Seribu Seribu - Eco Resort and Eco Theme Park, to Medical Tourism for the Elderly.

Raise Investment with Urban Tourism

The administration opens up investment opportunities in the urban tourism sector. Hence, they hold collaborative activities with investors, communities, and residents in various urban tourism locations and public spaces in Jakarta. For instance, with the activation of Kota Tua some time ago called the Kota Tua Batavia Festival and the #IniJakarta Festival.

Governor Anies also invited investors to activate state-owned and private assets as an example of post-revitalization adaptive reuse. Adaptive reuse refers to efforts to reuse assets by adjusting the condition of existing assets, in this case, cultural heritage buildings. For instance Tugu Batavia, Bank Indonesia, Cafe Batavia, and others.

They also initiated reviving the economy of Seribu Islands by making Seribu Island a Digital Nomad Island (DNI). On Jakarta's 495th anniversary, located on Bidadari Island, Seribu Islands, he explained that Jakarta and Bodetabek (Bogor, Depok, Tangerang, and Bekasi) are the home of the largest startup ecosystem in Indonesia with around 471 startups or 39.9% startups in Indonesia so they have great potential to develop a digital ecosystem. Access to digital infrastructure in Jakarta is very adequate compared to other regions in Indonesia with more than 14,000 public wifi spots available.

“Jakarta has tremendous potential in the tourism sector and the archipelago that can still be developed specifically to become global class tourism, by bringing the concept of digital nomads. With 113 islands owned by Jakarta with a distance of 1-2 hours, and the potential of this area to support the development of digital ecosystems in Indonesia through digital nomads," he concluded.