Apindo Hopes the Establishment of a Deregulation Task Force Can Improve Indonesia's Investment Climate

President Prabowo Subianto plans to form a special task force to streamline regulations and permits that are deemed to hinder investment and business activities in Indonesia.

Chairman of the Indonesian Employers Association (Apindo), Shinta Kamdani, welcomed the President’s plan, hoping it will improve the business and investment climate in Indonesia. According to Shinta, the task force will have a strong mandate and can work consistently to address various national and regional regulations that are still considered overlapping.

“We hope that this task force can work consistently, responsively and effectively in handling the regulatory issues that exist in the field, simplifying and eliminating unnecessary business regulations,” said Shinta when contacted by Kumparan, Friday (15/5).

She also hopes that this task force can resolve issues, especially those related to improving the efficiency of business operations, simplifying business licensing, and promoting investment transparency and realisation.

“We see that the formation of a task force to improve the business and investment climate in the field is very urgent, especially if we take into account the impact of current geopolitical pressures on business activities and job creation in Indonesia,” explained Shinta.

Shinta also acknowledged that Indonesia’s business and investment climate is still lagging behind its competitors. In addition, she also highlighted the inconsistency in the implementation of regulations in the field.

“With the impact of geopolitical pressures on increasing business burdens and decreasing the competitiveness of Indonesia’s investment climate, improvements in Indonesia need to be made immediately so that jobs in the formal sector continue to be created,” Shinta continued.

Shinta then outlined a number of regulations that are considered to be the most burdensome for businesses, ranging from investment permits, trade, imports and exports and their technical requirements, to environmental and spatial permits. In addition, regulations related to business financing or credit, energy costs, and logistics are also said to be major challenges for the business world.

“We need to convey that the government’s efforts to control or monopolize certain aspects or sectors in business activities have also backfired on the creation of efficiency and healthy business competition,” said Shinta.

Shinta also emphasised that the issue of consistency in the implementation of regulations is still a major challenge, even though the government has previously carried out reforms through the Job Creation Law.

Previously, Prabowo asked for the investment licensing process in Indonesia to be simplified and not made difficult in order to increase investment interest and accelerate business activities.

According to Prabowo, many business actors want to invest but have to wait for permits for one to two years. Therefore, Prabowo asked the government to form a special task force with experts to simplify investment regulations.

“I asked the Minister of State Secretary to gather experts to form a special task force to accelerate deregulation. Simplify, don’t make it difficult for entrepreneurs,” said Prabowo at the event on the Collection of Administrative Fines and the Rescue of State Finances at the Attorney General’s Office, Jakarta, quoted Friday (15/5).