Indonesia Conference Directory

By referring to the data of Capital Investment Coordination Board throughout the year 2018, the realization of foreign capital investment (Penanaman Modal Asing or PMA) has reached a value of 293.7 trillion rupiahs. Java Island is still categorized as one of the biggest foreign capital investment destination compared to other destinations. Meanwhile, tertiary sector (i.e., sectors of electricity, gas and water; construction; commerce and reparations; hotels and restaurants; transport, warehousing and telecommunications; housing, industrial areas and office space; and other services) are recorded much more superior than the primary and secondary sectors. However, there has been significant worries about the emerging foreign capital investment that will subsequently contribute to the downfall of the sector of micro, small and medium enterprises (Usaha Mikro Kecil dan Menengah or UMKM) in indonesia. In contrast, the change of Investment Negative List (Daftar Negatif Investasi or DNI) does not affect the development of UMKM because the rate of competitiveness between domestic and foreign investment is basically different. The efforts to balance between PMA and the development of UMKM should be based on the Principles for Responsible Investment (PRI). Some related principles, such as society, environment, and government should be a concern for the foreign investors in PMA. This article tries to analyze the regulations either in the region or national in order to make an easy climate of business (ease of doing business) and to protect UMKM by accommodating PRI in regulation formations especially for PMA. The first issue focused on the national regulation formations while the second issue stressed on the local regulation analysis, especially in Java island which has more foreign investment.