The government is beginning to change its approach to providing\ninvestment incentives by placing the absorption of labour as the primary\nfactor. Through the Investment Coordinating Board (BKPM), this policy is\nexpected to encourage the creation of more jobs amid global investment\ncompetition.<\/p>\n
Minister of Investment and Downstreaming\/Head of BKPM, Rosan\nRoeslani, emphasised that the provision of fiscal incentives will no\nlonger be based solely on the size of the incoming investment value. The\ngovernment will now consider the direct impact on society, particularly\nin terms of job creation.<\/p>\n
According to him, the labour-intensive industrial sector is the main\nfocus of this new policy. Industries capable of absorbing large numbers\nof workers are deemed to have a significant contribution to economic\ngrowth as well as reducing unemployment rates.<\/p>\n
\u201cLabour absorption will become an important parameter in providing\nincentives going forward,\u201d said Rosan during a press conference in\nJakarta on Thursday (23\/4\/2026).<\/p>\n
He cited the example of the coconut processing project in Morowali\nwith an investment value of around US$100 million. Although considered\nsmaller compared to mineral-based downstream projects, that project is\nable to absorb a large number of workers, thus providing broad\nsocio-economic impacts for the surrounding community.<\/p>\n
In the old approach, projects with investment values like that might\nnot have been a priority for receiving incentives. However, with the new\npolicy, similar projects have a high chance of receiving government\nsupport due to their contribution to job creation.<\/p>\n
This policy also serves as a signal that the government wants to\nencourage more inclusive investment oriented towards public welfare. In\naddition to boosting economic growth, this step is expected to create an\neven distribution of development benefits in various regions.<\/p>\n
BKPM data shows that investment realisation in the first quarter of\n2026 reached Rp498.8 trillion or about 24.4% of the annual target of\nRp2,041.3 trillion. From that achievement, the number of workers\nabsorbed reached 706,569 people.<\/p>\n
This figure experienced a significant increase of 18.9% compared to\nthe same period last year which recorded 594,104 workers. This increase\nindicates that investment is beginning to have a positive impact on job\ncreation.<\/p>\n
Going forward, the government is also opening opportunities for\nnon-fiscal incentives to support investment sustainability, especially\nfor sectors that have broad impacts on society.<\/p>\n
With this new strategy, the government hopes that the investment\nclimate in Indonesia will become increasingly competitive while being\nable to provide real benefits for sustainable economic growth and public\nwelfare.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/fiscal-incentives-focused-on-labour-intensive-industries-heres-why-1777013664", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }