Investment Ministry Optimistic Five-Year Investment Targets Are Achievable Despite Rising Benchmarks
Bisnis.com, JAKARTA — The Ministry of Investment and Downstream Industries/Investment Coordinating Board (BKPM) is optimistic that five-year investment realisation targets can be met despite progressively rising benchmarks.
BKPM Deputy for Investment Implementation Control Eddy Junaedi said that although Indonesia's incremental capital output ratio (ICOR) has not yet reached an ideal level, the government is focused on enforcing regulations to ensure investment continues flowing into the country.
"Imagine next year, the target rises to Rp2,200 trillion. Three years later it rises again to Rp2,500 trillion, and by 2029 it reaches Rp3,400 trillion — but we are optimistic," Eddy said at the Bisnis Indonesia Forum on Thursday (22/5/2025).
The optimism stems from investment realisation in previous years consistently meeting targets. Indeed, at the start of this year, investment realisation reached Rp465.2 trillion, representing 15.9% year-on-year growth. The first quarter 2025 achievement is equivalent to 24.4% of this year's total investment target of Rp1,905.6 trillion.
"Now we maintain this momentum, tighten regulatory enforcement and security, and we are optimistic we can do it. If we bring our ICOR down to 3, or reduce the ICOR proportion from 6 to 4, that would be sufficient to achieve 8% economic growth," he said.
Eddy acknowledged that this is also achievable despite the need for continued improvements in regulations, licensing and other areas. He conceded that interference from thuggish elements significantly disrupts the investment climate and remains a key challenge for the government.
The government is further supported by the Investment Acceleration Task Force established under Presidential Decree 11/2021. Its roles include: first, ensuring investment realisation by both domestic and foreign businesses that have obtained business licences; second, swiftly resolving problems and bottlenecks (debottlenecking) in business sectors experiencing licensing obstacles; third, accelerating business in sectors that quickly generate foreign exchange, create employment, and develop regional or local economies; fourth, expediting cooperation between investors and micro, small and medium enterprises (MSMEs); and fifth, recommending administrative sanctions to ministry, agency, authority and regional government leaders against officials or employees who obstruct investment implementation or add to the cost of investing in Indonesia.
BKPM Deputy for Investment Implementation Control Eddy Junaedi said that although Indonesia's incremental capital output ratio (ICOR) has not yet reached an ideal level, the government is focused on enforcing regulations to ensure investment continues flowing into the country.
"Imagine next year, the target rises to Rp2,200 trillion. Three years later it rises again to Rp2,500 trillion, and by 2029 it reaches Rp3,400 trillion — but we are optimistic," Eddy said at the Bisnis Indonesia Forum on Thursday (22/5/2025).
The optimism stems from investment realisation in previous years consistently meeting targets. Indeed, at the start of this year, investment realisation reached Rp465.2 trillion, representing 15.9% year-on-year growth. The first quarter 2025 achievement is equivalent to 24.4% of this year's total investment target of Rp1,905.6 trillion.
"Now we maintain this momentum, tighten regulatory enforcement and security, and we are optimistic we can do it. If we bring our ICOR down to 3, or reduce the ICOR proportion from 6 to 4, that would be sufficient to achieve 8% economic growth," he said.
Eddy acknowledged that this is also achievable despite the need for continued improvements in regulations, licensing and other areas. He conceded that interference from thuggish elements significantly disrupts the investment climate and remains a key challenge for the government.
The government is further supported by the Investment Acceleration Task Force established under Presidential Decree 11/2021. Its roles include: first, ensuring investment realisation by both domestic and foreign businesses that have obtained business licences; second, swiftly resolving problems and bottlenecks (debottlenecking) in business sectors experiencing licensing obstacles; third, accelerating business in sectors that quickly generate foreign exchange, create employment, and develop regional or local economies; fourth, expediting cooperation between investors and micro, small and medium enterprises (MSMEs); and fifth, recommending administrative sanctions to ministry, agency, authority and regional government leaders against officials or employees who obstruct investment implementation or add to the cost of investing in Indonesia.