Indonesia Will Struggle to Attract Investment Unless Two Key Obstacles Are Addressed
Jakarta: Mining and energy observer Ferdy Hasiman has assessed that Indonesia will find it difficult to attract investment as long as the government fails to address problems faced by investors, namely interference from mass organisations (ormas) and non-governmental organisations (NGOs), as well as unclear licensing regulations. He warned that the government's much-touted downstreaming efforts would amount to nothing more than a superficial exercise.
"It is pointless for President Prabowo to visit country after country to convince investors if the bureaucracy and investment rules in this country are not reformed. Investors want Indonesia to be investor-friendly — they have no appetite for disorder. To that end, inter-sectoral ministerial egos and the presence of mass organisations or NGOs must be eliminated in order to achieve the Asta Cita goals," said Ferdy, as quoted from a written statement on Monday, 2 June 2025.
The problem of interference by mass organisations and NGOs has been experienced by several companies and investors in Indonesia. Examples include pressure from mass organisations on automotive company BYD in Subang; extortion of tenders by a Chamber of Commerce (Kadin) member targeting Chengda Engineering Co, a contractor for a National Strategic Project (PSN) in Cilegon, Banten; nickel-related issues managed by Indonesia Morowali Industrial Park (IMIP) in Central Sulawesi; and environmental impact assessment (AMDAL) problems faced by PT Dairi Prima Mineral (DPM) in Dairi, North Sumatra.
Ferdy, who is also a researcher at Alpha Research Database Indonesia, urged the government to be more serious in resolving investment obstacles, particularly for Chinese investors.
"The government must be more decisive in resolving the problems faced by Chinese business operators, especially given that China is one of the largest sources of investment in Indonesia," he explained.
According to data from the Investment Coordinating Board (BKPM), the value of mainland Chinese investment in Indonesia reached USD8.1 billion during 2024. Meanwhile, cumulative mainland Chinese investment in Indonesia since 2019 has totalled USD36.4 billion.
He added that problems faced by investors must not be left unresolved, as this would frighten them away from investing in Indonesia. Furthermore, regulations that are genuinely mutually beneficial for both the government and investors are needed.
"Since the era of President Jokowi up to now, elites have frequently manipulated laws and regulations solely for their own interests. Regulations must be made to benefit many parties, including investors. Convoluted regulations and bureaucracy that cause investors to reconsider investing in Indonesia must be avoided," Ferdy cautioned.
"It is pointless for President Prabowo to visit country after country to convince investors if the bureaucracy and investment rules in this country are not reformed. Investors want Indonesia to be investor-friendly — they have no appetite for disorder. To that end, inter-sectoral ministerial egos and the presence of mass organisations or NGOs must be eliminated in order to achieve the Asta Cita goals," said Ferdy, as quoted from a written statement on Monday, 2 June 2025.
The problem of interference by mass organisations and NGOs has been experienced by several companies and investors in Indonesia. Examples include pressure from mass organisations on automotive company BYD in Subang; extortion of tenders by a Chamber of Commerce (Kadin) member targeting Chengda Engineering Co, a contractor for a National Strategic Project (PSN) in Cilegon, Banten; nickel-related issues managed by Indonesia Morowali Industrial Park (IMIP) in Central Sulawesi; and environmental impact assessment (AMDAL) problems faced by PT Dairi Prima Mineral (DPM) in Dairi, North Sumatra.
Ferdy, who is also a researcher at Alpha Research Database Indonesia, urged the government to be more serious in resolving investment obstacles, particularly for Chinese investors.
"The government must be more decisive in resolving the problems faced by Chinese business operators, especially given that China is one of the largest sources of investment in Indonesia," he explained.
According to data from the Investment Coordinating Board (BKPM), the value of mainland Chinese investment in Indonesia reached USD8.1 billion during 2024. Meanwhile, cumulative mainland Chinese investment in Indonesia since 2019 has totalled USD36.4 billion.
He added that problems faced by investors must not be left unresolved, as this would frighten them away from investing in Indonesia. Furthermore, regulations that are genuinely mutually beneficial for both the government and investors are needed.
"Since the era of President Jokowi up to now, elites have frequently manipulated laws and regulations solely for their own interests. Regulations must be made to benefit many parties, including investors. Convoluted regulations and bureaucracy that cause investors to reconsider investing in Indonesia must be avoided," Ferdy cautioned.