Land Costs and Thuggery Identified as Key Barriers to Indonesia's Rp 1,905 Trillion Investment Target
Jakarta — The government is targeting Rp 1,905 trillion in investment inflows to Indonesia this year. Two key obstacles have been identified as barriers to achieving this target.
Deputy for Investment Implementation Control at the Ministry of Investment and Downstreaming/BKPM, Edy Junaedi, said the first issue concerns land. He noted that difficulties in land acquisition and relatively high prices remain a significant problem.
"Compared to other ASEAN countries, our land prices — both for industrial and investment purposes — are still relatively higher," he said, as quoted on Tuesday (20/5/2025).
Edy said the other issue involves convoluted licensing processes that can take months. The Ministry of Investment and Downstreaming/BKPM plans to implement a "fictive positive" mechanism in the licensing process. Under this system, business permits would be automatically issued if the relevant technical ministry fails to process them within the agreed timeframe.
Additionally, Edy said his office would improve the OSS (Online Single Submission) system as an integrated electronic business licensing platform.
Another problem arises during the investment execution stage, particularly disruptions from thuggery by certain elements of civil society organisations (ormas). A recent high-profile case of ormas thuggery occurred at the BYD factory in Subang, West Java.
"Those who have already begun executing investments are also starting to face issues — as we saw a few days ago, which attracted considerable attention — disruptions from ormas and local communities near project sites. But this is a challenge for us," Edy said.
Executive Director of the Segara Research Institute, Piter Abdullah Rejalam, assessed that thuggery occurs due to weak law enforcement in Indonesia. The failure to uphold the law and rapid changes ultimately create uncertainty.
"I have been asked a lot recently about thuggery, which is essentially a result or indication caused by the failure to enforce the law — it comes down to the legal approach," Piter concluded.
Deputy for Investment Implementation Control at the Ministry of Investment and Downstreaming/BKPM, Edy Junaedi, said the first issue concerns land. He noted that difficulties in land acquisition and relatively high prices remain a significant problem.
"Compared to other ASEAN countries, our land prices — both for industrial and investment purposes — are still relatively higher," he said, as quoted on Tuesday (20/5/2025).
Edy said the other issue involves convoluted licensing processes that can take months. The Ministry of Investment and Downstreaming/BKPM plans to implement a "fictive positive" mechanism in the licensing process. Under this system, business permits would be automatically issued if the relevant technical ministry fails to process them within the agreed timeframe.
Additionally, Edy said his office would improve the OSS (Online Single Submission) system as an integrated electronic business licensing platform.
Another problem arises during the investment execution stage, particularly disruptions from thuggery by certain elements of civil society organisations (ormas). A recent high-profile case of ormas thuggery occurred at the BYD factory in Subang, West Java.
"Those who have already begun executing investments are also starting to face issues — as we saw a few days ago, which attracted considerable attention — disruptions from ormas and local communities near project sites. But this is a challenge for us," Edy said.
Executive Director of the Segara Research Institute, Piter Abdullah Rejalam, assessed that thuggery occurs due to weak law enforcement in Indonesia. The failure to uphold the law and rapid changes ultimately create uncertainty.
"I have been asked a lot recently about thuggery, which is essentially a result or indication caused by the failure to enforce the law — it comes down to the legal approach," Piter concluded.