Deputy Investment Minister's Strong Resolve to Reform Licensing for 8 Per Cent 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 revision is 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 being revised 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 governs 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 a fairly ambitious figure, but also quite realistic if it can be achieved," said Todotua during a 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 Rp 9,900 trillion. Meanwhile, the current administration has set a target of 8 per cent economic growth. Consequently, domestic investment over the next five years must reach Rp 13,000 trillion.
"If during the previous government's 10 years, investment realisation was approximately Rp 9,900 trillion, then in the next 5 years to reach 8 per cent, we need investment realisation of Rp 13,000 trillion," he explained.
He revealed that this year's investment target has been raised to Rp 1,900 trillion, up from the 2024 realisation of Rp 1,700 trillion. He noted that investment realisation in the first quarter of 2025 reached Rp 465 trillion, and preliminary reports for the second quarter also showed reassuring results.
"The first quarter saw approximately Rp 465 trillion in investment realisation. Then for the second quarter, since Monday my Deputy has been reporting that the figures are relatively safe. And based on what my deputies have conveyed, hopefully the second quarter will still be on track," he said.
Nevertheless, he acknowledged that his ministry is anticipating challenges ahead, particularly 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. This was caused by various longstanding issues ranging from licensing problems to an unconducive investment climate.
"We found that in 2024, the figure for unrealised investment was around Rp 1,500 trillion, 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 said.
Deputy Minister of Investment and Downstreaming/BKPM Todotua Pasaribu explained that the three regulations being revised 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 governs 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 a fairly ambitious figure, but also quite realistic if it can be achieved," said Todotua during a 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 Rp 9,900 trillion. Meanwhile, the current administration has set a target of 8 per cent economic growth. Consequently, domestic investment over the next five years must reach Rp 13,000 trillion.
"If during the previous government's 10 years, investment realisation was approximately Rp 9,900 trillion, then in the next 5 years to reach 8 per cent, we need investment realisation of Rp 13,000 trillion," he explained.
He revealed that this year's investment target has been raised to Rp 1,900 trillion, up from the 2024 realisation of Rp 1,700 trillion. He noted that investment realisation in the first quarter of 2025 reached Rp 465 trillion, and preliminary reports for the second quarter also showed reassuring results.
"The first quarter saw approximately Rp 465 trillion in investment realisation. Then for the second quarter, since Monday my Deputy has been reporting that the figures are relatively safe. And based on what my deputies have conveyed, hopefully the second quarter will still be on track," he said.
Nevertheless, he acknowledged that his ministry is anticipating challenges ahead, particularly 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. This was caused by various longstanding issues ranging from licensing problems to an unconducive investment climate.
"We found that in 2024, the figure for unrealised investment was around Rp 1,500 trillion, 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 said.