JAKARTA - The Indonesian government is directing its primary focus on\neasing licensing procedures as the key to accelerating domestic\ninvestment realisation. This forms part of a strategic effort to achieve\nthe ambitious targets of 8 per cent economic growth and Rp 13,000\ntrillion in investment by 2029.<\/p>\n
To realise these targets, the Ministry of Investment and\nDownstreaming together with the Investment Coordinating Board (BKPM) are\nrevising three implementing regulations under Government Regulation\nNo.\u00a05 of 2021 governing Risk-Based Business Licensing. The revision of\nthese three regulations represents a critical step towards improving and\naccelerating the business licensing process, which has continued to face\nvarious obstacles and barriers.<\/p>\n
Deputy Minister of Investment and Downstreaming\/BKPM, Todotua\nPasaribu, explained that the three regulations being revised include\nBKPM Regulation No.\u00a03 of 2021, which governs the Electronically\nIntegrated Risk-Based Business Licensing System; BKPM Regulation No.\u00a04\nof 2021, which provides guidelines and procedures for risk-based\nlicensing services and investment facilities; and BKPM Regulation No.\u00a05\nof 2021, which governs guidelines for supervising risk-based business\nlicensing.<\/p>\n
\u201cThis government has a target of economic growth heading towards 8\nper cent. This is a fairly ambitious figure, but also quite realistic if\nit can be achieved,\u201d said Todotua in an official statement issued\nrecently.<\/p>\n
Looking at investment achievements over the previous ten years of\ngovernment, investment realisation stood at approximately Rp 9,900\ntrillion. With the 8 per cent economic growth target for the current\nadministration, the government is targeting a significant increase to Rp\n13,000 trillion over the next five years. This means domestic investment\ninflows must increase dramatically for the economic target to be\nmet.<\/p>\n
\u201cIf during the previous 10 years of government, the investment\nrealisation figure was approximately Rp 9,900 trillion, then in the next\n5 years to reach the 8 per cent figure, we need investment realisation\nof Rp 13,000 trillion,\u201d Todotua affirmed.<\/p>\n
For this year, the government has already raised the investment\ntarget to Rp 1,900 trillion, up from last year\u2019s realisation of Rp 1,700\ntrillion. This figure serves as an initial benchmark for measuring the\neffectiveness of various policies and licensing system improvements in\nattracting both domestic and foreign investors.<\/p>\n
The investment realisation report for the first quarter of 2025\nshowed achievement of approximately Rp 465 trillion, and early data for\nthe second quarter also showed relatively stable results. However, the\ngovernment remains vigilant against potential obstacles that could\nemerge particularly in the third and fourth quarters.<\/p>\n
Licensing services remain a primary concern as longstanding problems\nin this sector have previously caused Indonesia to lose significant\ninvestment potential. According to Todotua, in 2024 Indonesia\nexperienced \u201cunrealised investment\u201d estimated at between Rp 1,500\ntrillion and Rp 2,000 trillion. These losses were caused by classic\nbarriers such as complex and convoluted licensing processes, an\ninvestment climate that was not fully conducive, and overlapping\npolicies that confused investors.<\/p>\n
\u201cWe found that in 2024, the unrealised investment figure was around\n1,500, possibly reaching 2,000 trillion. Unrealised investment \u2014 why?\nBecause of problems like these: licensing, an unconducive investment\nclimate, various overlapping policies and so on,\u201d he stated firmly.<\/p>\n
The revision of the three ministerial regulations is viewed as a\nsolution to overcome these barriers. One important aspect of the\nrevision is the simplification and acceleration of licensing processes\ninvolving multiple ministries and agencies. Currently, there are\napproximately 1,700 types of licences that investors must navigate,\ninvolving at least 17 different ministries and agencies.<\/p>\n
Additionally, the financial industry sector, which has not yet been\nincorporated into the Online Single Submission (OSS) system, is a\nprimary focus for integration. This aims to ensure that licensing\nprocesses and investment realisation records in the financial sector \u2014\nincluding banking, insurance and non-banking sectors \u2014 can be recorded\ntransparently and in an integrated manner.<\/p>\n
\u201cApproximately 1-2 weeks ago we held a meeting with the Chairman of\nthe Financial Services Authority (OJK) and we provided an explanation,\nwe gave input on why it is important for us to consolidate,\u201d said\nTodotua. He added that financial industry data had never been properly\nrecorded in investment realisation figures because it had not yet been\nincorporated into the electronically integrated licensing system.<\/p>\n
Through data consolidation and streamlined licensing processes, the\ngovernment hopes investors will receive faster and more efficient\nservices, thereby driving significant investment growth. This will not\nonly help attract new capital but also accelerate the achievement of\nhigher and more sustainable economic growth targets.<\/p>\n
The 8 per cent economic growth target is not merely an ambitious\nfigure without foundation. The government views it as a strategic\nnecessity to strengthen Indonesia\u2019s economic competitiveness amid\nintense global competition. Accordingly, improving regulations and\neasing business licensing have become key pillars in the national\neconomic development strategy going forward.<\/p>\n
Through strategic measures such as regulatory revision and electronic\nlicensing system integration, the government aims to ensure the\ninvestment climate becomes increasingly conducive and transparent.\nSuccess in this area will pave the way for more optimal investment\nrealisation, enabling Indonesia to effectively achieve its established\ndevelopment targets.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/government-prepares-new-regulations-as-investment-target-soars-1771253721", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }