Investment Ministry Official Reveals Key Obstacles Hindering Investment in Indonesia
Jakarta — Deputy for Investment Implementation Control at the Ministry of Investment and Downstreaming/BKPM, Edy Junaedi, has openly outlined a series of problems that frequently obstruct incoming investment, even as the government has set an ambitious target of Rp 1,905 trillion in investment this year.
One of the issues raised by Edy is the question of land. Beyond land acquisition difficulties, land prices in Indonesia are considered more expensive than in other Southeast Asian countries.
"If we compare our land prices, both for industry and investment, with other ASEAN countries, they are indeed still relatively higher," he said at the Indonesia Investment Talk Series in Jakarta on Monday (19/5/2025).
Furthermore, Edy said another problem concerns convoluted licensing processes that can take months to complete. The Ministry of Investment and Downstreaming/BKPM itself plans to implement a "fictive positive" mechanism in the licensing process. Under this approach, business permits would be automatically issued if the relevant technical ministry fails to grant the licence within the agreed timeframe.
Additionally, Edy said his office would also refine the OSS (Online Single Submission) system as an integrated electronic business licensing platform.
Other problems arise during the investment execution phase, such as thuggery by certain elements of civil society organisations (ormas). Recent acts of ormas thuggery that have drawn public attention occurred at the BYD factory in Subang, West Java.
"And for those already in the execution phase, there have also been issues, like the one a few days ago that attracted considerable attention — disruptions from ormas and local communities around the site. But this is a challenge for us," Edy said.
Meanwhile, Executive Director of the Segara Research Institute, Piter Abdullah Rejalam, argued that thuggery occurs due to inadequate law enforcement in Indonesia. The failure to enforce the law and rapid changes ultimately create uncertainty.
"Lately I have been asked a lot about issues such as thuggery, which is actually a result or indication caused by the lack of law enforcement — it is ultimately a matter of the legal approach," Piter concluded.
One of the issues raised by Edy is the question of land. Beyond land acquisition difficulties, land prices in Indonesia are considered more expensive than in other Southeast Asian countries.
"If we compare our land prices, both for industry and investment, with other ASEAN countries, they are indeed still relatively higher," he said at the Indonesia Investment Talk Series in Jakarta on Monday (19/5/2025).
Furthermore, Edy said another problem concerns convoluted licensing processes that can take months to complete. The Ministry of Investment and Downstreaming/BKPM itself plans to implement a "fictive positive" mechanism in the licensing process. Under this approach, business permits would be automatically issued if the relevant technical ministry fails to grant the licence within the agreed timeframe.
Additionally, Edy said his office would also refine the OSS (Online Single Submission) system as an integrated electronic business licensing platform.
Other problems arise during the investment execution phase, such as thuggery by certain elements of civil society organisations (ormas). Recent acts of ormas thuggery that have drawn public attention occurred at the BYD factory in Subang, West Java.
"And for those already in the execution phase, there have also been issues, like the one a few days ago that attracted considerable attention — disruptions from ormas and local communities around the site. But this is a challenge for us," Edy said.
Meanwhile, Executive Director of the Segara Research Institute, Piter Abdullah Rejalam, argued that thuggery occurs due to inadequate law enforcement in Indonesia. The failure to enforce the law and rapid changes ultimately create uncertainty.
"Lately I have been asked a lot about issues such as thuggery, which is actually a result or indication caused by the lack of law enforcement — it is ultimately a matter of the legal approach," Piter concluded.