Deputy Investment Minister's Strong Resolve to Reform Licensing for 8% Economic Growth
Jakarta: The Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) is currently revising three implementing regulations of Government Regulation No. 5 of 2021 on Risk-Based Business Licensing. The revisions are expected 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 a target of economic growth towards 8 per cent. This is quite an ambitious figure, but also realistic if it can be achieved," said Todotua at the Public Consultation on the Draft Regulation of the Minister of Investment and Downstreaming/Head of BKPM on Thursday, 3 July 2025.
He compared this with the previous government's ten-year term, during which investment realisation reached approximately Rp9,900 trillion. Meanwhile, the current administration's target of 8 per cent economic growth means that domestic investment must reach Rp13,000 trillion over the next five years.
"If during the previous government's 10 years, investment realisation was approximately Rp9,900 trillion, then in the next 5 years to reach 8 per cent, we need investment realisation of Rp13,000 trillion," he explained.
He revealed that this year's investment target has been raised to Rp1,900 trillion, up from the 2024 realisation of Rp1,700 trillion. He noted that investment realisation in the first quarter of 2025 reached Rp465 trillion, and preliminary reports for the second quarter also show reassuring results.
"The first quarter saw approximately Rp465 trillion in investment realisation. Then for the second quarter, since Monday my Deputy has been reporting that the figures are relatively safe. And hopefully the second quarter will remain on track," he said.
Nevertheless, he acknowledged that his 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 Rp2,000 trillion in 2024, caused by persistent issues ranging from licensing problems to an unconducive investment climate.
"We found that in 2024, unrealised investment was around Rp1,500 trillion, possibly reaching Rp2,000 trillion. Why? Because of issues like licensing, an unconducive investment climate, various overlapping policies, and so on," he said.
Licensing Reform
To address these business licensing problems, the Ministry of Investment and Downstreaming, led by Minister Rosan Roeslani, is determined to undertake reforms. "The Ministry of Investment under Minister Rosan Roeslani has a very strong desire to reform this. And the President has always been firm about reforming the bureaucracy," he explained.
The revision of the three ministerial regulations is expected to accelerate and simplify the business licensing process.
"Hopefully this will also be a breakthrough in our efforts to accelerate, simplify, and particularly provide certainty for business licensing," he said.
He noted that there are currently 1,700 types of licences involving approximately 17 ministries and agencies. However, the financial industry has not yet adopted the Online Single Submission (OSS) system. His ministry and the Financial Services Authority (OJK) have therefore agreed that the financial industry should also be integrated into the OSS system.
"Approximately one to two weeks ago, we held a meeting with the OJK Chairman and explained why consolidation is important," he said.
"The financial industry — both banking and non-banking sectors including insurance — their data has never been included in investment realisation figures. The licensing processes there have not been integrated either. But I recently observed a banking issue related to Business Identification Numbers (NIB), which underscores the need for consolidation into OSS. The OJK Chairman's response was very positive, and hopefully our ministry will follow through," he explained.
"Within the next one to two weeks, we should have an agreement with the financial industry and OJK to integrate the financial industry into our OSS system," he said.
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 a target of economic growth towards 8 per cent. This is quite an ambitious figure, but also realistic if it can be achieved," said Todotua at the Public Consultation on the Draft Regulation of the Minister of Investment and Downstreaming/Head of BKPM on Thursday, 3 July 2025.
He compared this with the previous government's ten-year term, during which investment realisation reached approximately Rp9,900 trillion. Meanwhile, the current administration's target of 8 per cent economic growth means that domestic investment must reach Rp13,000 trillion over the next five years.
"If during the previous government's 10 years, investment realisation was approximately Rp9,900 trillion, then in the next 5 years to reach 8 per cent, we need investment realisation of Rp13,000 trillion," he explained.
He revealed that this year's investment target has been raised to Rp1,900 trillion, up from the 2024 realisation of Rp1,700 trillion. He noted that investment realisation in the first quarter of 2025 reached Rp465 trillion, and preliminary reports for the second quarter also show reassuring results.
"The first quarter saw approximately Rp465 trillion in investment realisation. Then for the second quarter, since Monday my Deputy has been reporting that the figures are relatively safe. And hopefully the second quarter will remain on track," he said.
Nevertheless, he acknowledged that his 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 Rp2,000 trillion in 2024, caused by persistent issues ranging from licensing problems to an unconducive investment climate.
"We found that in 2024, unrealised investment was around Rp1,500 trillion, possibly reaching Rp2,000 trillion. Why? Because of issues like licensing, an unconducive investment climate, various overlapping policies, and so on," he said.
Licensing Reform
To address these business licensing problems, the Ministry of Investment and Downstreaming, led by Minister Rosan Roeslani, is determined to undertake reforms. "The Ministry of Investment under Minister Rosan Roeslani has a very strong desire to reform this. And the President has always been firm about reforming the bureaucracy," he explained.
The revision of the three ministerial regulations is expected to accelerate and simplify the business licensing process.
"Hopefully this will also be a breakthrough in our efforts to accelerate, simplify, and particularly provide certainty for business licensing," he said.
He noted that there are currently 1,700 types of licences involving approximately 17 ministries and agencies. However, the financial industry has not yet adopted the Online Single Submission (OSS) system. His ministry and the Financial Services Authority (OJK) have therefore agreed that the financial industry should also be integrated into the OSS system.
"Approximately one to two weeks ago, we held a meeting with the OJK Chairman and explained why consolidation is important," he said.
"The financial industry — both banking and non-banking sectors including insurance — their data has never been included in investment realisation figures. The licensing processes there have not been integrated either. But I recently observed a banking issue related to Business Identification Numbers (NIB), which underscores the need for consolidation into OSS. The OJK Chairman's response was very positive, and hopefully our ministry will follow through," he explained.
"Within the next one to two weeks, we should have an agreement with the financial industry and OJK to integrate the financial industry into our OSS system," he said.