Deputy Investment Minister Overhauls Licensing to Achieve Eight Per Cent Economic Growth
Jakarta — The Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) is currently revising three implementing regulations under Government Regulation No. 5 of 2021 on Risk-Based Business Licensing. The revisions are intended to accelerate investment realisation and achieve the national economic growth target of 8 per cent by 2029.
Deputy Minister of Investment and Downstreaming/BKPM Todotua Pasaribu explained that the three regulations under revision are BKPM Regulation No. 3 of 2021, which governs the Electronically Integrated Risk-Based Business Licensing System; BKPM Regulation No. 4 of 2021, which specifically regulates guidelines and procedures for Risk-Based Business Licensing Services and Investment Facilities; and BKPM Regulation No. 5 of 2021, which governs guidelines and procedures for Risk-Based Business Licensing Supervision.
"This government has set an economic growth target heading towards 8 per cent. This is a fairly ambitious figure, but also quite realistic if it can be delivered," said Todotua during a Public Consultation on the Draft Regulation of the Minister of Investment and Downstreaming/Head of BKPM.
He drew a comparison with the previous ten-year administration, during which investment realisation reached approximately Rp 9,900 trillion. Meanwhile, the current government has set a target of 8 per cent economic growth, meaning that domestic investment over the next five years must reach Rp 13,000 trillion.
"If during the previous government's ten years, investment realisation was approximately Rp 9,900 trillion, then in the next five years to reach 8 per cent, we need investment realisation of Rp 13,000 trillion," he explained.
He disclosed that this year's investment target has been raised to Rp 1,900 trillion, up from the 2024 realisation of Rp 1,700 trillion. Investment realisation in the first quarter of 2025 reached Rp 465 trillion, and preliminary reports for the second quarter also indicate safe results.
"The first quarter saw approximately Rp 465 trillion in investment realisation. Then for the second quarter, I was briefed by the Deputy from Monday and the figure is relatively safe. And if my deputies are to be believed, hopefully the second quarter will still be on track," he said.
Nevertheless, he acknowledged that the ministry is anticipating challenges in the third and fourth quarters, as investment realisation is heavily dependent on licensing services.
He recounted that Indonesia lost potential investment of up to Rp 2,000 trillion in 2024 due to various longstanding issues ranging from licensing problems to an unconducive investment climate.
"We found that in 2024, the figure for unrealised investment was around 1,500, possibly reaching Rp 2,000 trillion. Unrealised investment — why? Because of issues like these: licensing, an unconducive investment climate, various overlapping policies, and so on," he concluded.
Deputy Minister of Investment and Downstreaming/BKPM Todotua Pasaribu explained that the three regulations under revision are BKPM Regulation No. 3 of 2021, which governs the Electronically Integrated Risk-Based Business Licensing System; BKPM Regulation No. 4 of 2021, which specifically regulates guidelines and procedures for Risk-Based Business Licensing Services and Investment Facilities; and BKPM Regulation No. 5 of 2021, which governs guidelines and procedures for Risk-Based Business Licensing Supervision.
"This government has set an economic growth target heading towards 8 per cent. This is a fairly ambitious figure, but also quite realistic if it can be delivered," said Todotua during a Public Consultation on the Draft Regulation of the Minister of Investment and Downstreaming/Head of BKPM.
He drew a comparison with the previous ten-year administration, during which investment realisation reached approximately Rp 9,900 trillion. Meanwhile, the current government has set a target of 8 per cent economic growth, meaning that domestic investment over the next five years must reach Rp 13,000 trillion.
"If during the previous government's ten years, investment realisation was approximately Rp 9,900 trillion, then in the next five years to reach 8 per cent, we need investment realisation of Rp 13,000 trillion," he explained.
He disclosed that this year's investment target has been raised to Rp 1,900 trillion, up from the 2024 realisation of Rp 1,700 trillion. Investment realisation in the first quarter of 2025 reached Rp 465 trillion, and preliminary reports for the second quarter also indicate safe results.
"The first quarter saw approximately Rp 465 trillion in investment realisation. Then for the second quarter, I was briefed by the Deputy from Monday and the figure is relatively safe. And if my deputies are to be believed, hopefully the second quarter will still be on track," he said.
Nevertheless, he acknowledged that the ministry is anticipating challenges in the third and fourth quarters, as investment realisation is heavily dependent on licensing services.
He recounted that Indonesia lost potential investment of up to Rp 2,000 trillion in 2024 due to various longstanding issues ranging from licensing problems to an unconducive investment climate.
"We found that in 2024, the figure for unrealised investment was around 1,500, possibly reaching Rp 2,000 trillion. Unrealised investment — why? Because of issues like these: licensing, an unconducive investment climate, various overlapping policies, and so on," he concluded.