ISD Executive Luncheon

Jakarta, 4 December 2014

ISD Executive Luncheon

Jakarta, December 4, 2014

Heading to the challenging 2015 Indonesia Services Dialogue (ISD) held the Executive Luncheon on December 4th, 2014 in JS Luwansa Hotel, Jakarta.  The establishment and some of the outcome of the first 100 days of the “Kerja” cabinet of Jokowi and JK has sent positive perception for investment climate and has shown a new stage of progress in the national economic development.

In his opening remark, Chris Kanter, the newly appointed Chairman of Board of Founders of ISD (Ketua Badan Pembina), who is also the Vice Chairman for Trade and International Relations of Indonesian Chamber of Commerce and Industry (KADIN), demonstrates that Indonesia is facing three challenges in macro-economic indicators. Firstly, high transportation cost for business, which is worsen by the lack of infrastructure and non-integration of the national transportation system. Secondly, labour issues such as lower productivity level compare to many countries, shortage of skilled workers, and outsourcing issues. Thirdly, legal uncertainty that at times creates confusion and additional cost for investors to do business in Indonesia.

“Our recommendations to the new government is to implement SLA (Service Level Agreement) in all public services, to reduce the restriction in investment, and to increase the quality of internet services for broadband internet to support economic growth,” added Chris.

Some of key decision makers from corporations who are ISD members  are also attending this dialogue. New ideas, recommendations, and meaningful insights are discussed during the three-hour session. Participants describes impediments which companies are facing, the pros and cons of current regulations, and suggestions for improvement in the services sectors.

“Education doesn’t produce ‘ready to use’ employees for private sectors, therefore we must close the gap between education and business. It is one of the opportunities for ISD to evaluate further about this topic,” said Antarina S.F Amir, Founder and CEO of HighScope Indonesia.

Clearly ISD has a role to connect the dots and to provide strategic and applicable solutions that will support its members efficiency and also the overall services sectors. Along with Antarina, Iskandar Panjaitan from Directorate of Trade in Services Ministry of Trade Republic of Indonesia also emphasizes ISD’s position facilitate positive transformation in some of the regulations.

“This is the best moment for Ministry of Trade to modernize Indonesia’s services sector. We need participation from all ISD members,” uttered Iskandar.

In alignment with Kabinet Kerja’s vision to empower maritime sector, Jakob Friis Sorensen, President Director of MAERSK Indonesia, encourages ISD to allocate attention to the maritime sector. ISD will not only put his concern in wish list, but maritime-related issues will also be one of the priorities of ISD’s Q1 Dialogue Series theme.

Regarding working agenda in 2015, ISD is very prepared to bring the most practical dialogue and recommendations for its members. Quarter 1 will be focusing on Logistic Services including maritime issues, Distribution Services, and Telecommunication Services. Quarter 2’s focus are Business Services, Legal Services, Education Services, and Financial Services. Themes that will be discussed in ISD’s Quarter 3 dialogues will touch on Tourism and Creative Economy, while the last quarter of 2015 will cover cross-sectors discussion of all members.

By joining ISD, members will not only understand local and national regulations in the services sectors, but also have more understanding about Indonesia’s relevancy amongst other nations in the region.

“If Indonesia wants to act as the hub to services sector, tax regulator should be more open to input from the private sectors. Malaysia imposes no VAT for overseas services delivery  and in 2015 will grant tax holiday. Singapore also offers similar no VAT scheme for services, providing good business justification for services providers to establish their headquarters in Malaysia and Singapore. On the contrary, Indonesia is losing its competitiveness by not applying a similar policy,” said Ay TjhingPhan, President Director of PwC Indonesia.