Luhut Addresses Global Concerns Over Indonesia's Investment Climate
Chairman of the National Economic Council (DEN), Luhut Binsar Pandjaitan, stated that the ratification of the Law on the Development and Strengthening of the Financial Sector (P2SK) reinforces Indonesia’s bargaining position as a prime investment destination in Asia. He made this assertion following global doubts regarding the investment climate in Indonesia due to regulatory issues.
According to him, the P2SK Law is one of the answers to these doubts. Under this regulation, Indonesia applies clean and independent international commercial legal standards to stand alongside Singapore, Hong Kong, and Dubai.
“The world often doubts the investment climate in this country because of regulations, I do not deny that. However, if we want to change these doubts, we must improve by providing long-term regulatory certainty. The ratification of the P2SK Law last month by the DPR is an affirmation of our bargaining position as a prime investment destination in Asia,” Luhut said, as quoted from his official Instagram post on Friday (17/7/2026).
Luhut said that Indonesia will become a real destination where placed capital moves into the real sector. According to him, this is the opposite of other financial centres that merely serve as transit points for capital.
He mentioned that Indonesia is implementing a different strategy from developed countries, which he said spend trillions of dollars on chips or AI. He noted that advanced technology yields nothing if it does not benefit society.
“With the potential of Indonesia’s demographic bonus, where the majority are digitally literate, we will maximise every direct investment into the real sector. So, let developed countries compete to sell their equipment, while we prepare the fertile ground,” he explained.
Luhut also emphasised the government’s commitment to strengthening the investment climate through the development of the International Financial Centre Indonesia (PFII) and the establishment of the Investment Management Agency (BPI) Daya Anagata Nusantara (Danantara). According to him, these two institutions will collaborate to invest capital and share risks with investors.
He added that Indonesia has great potential to become a major force in the green energy sector. Therefore, future investment flows will be focused on various strategic projects, such as clean energy transition, blue economy development, and forest conservation.
Thus, Luhut believes that investors will not only gain business profits but also contribute to preserving the environment for the future.
“If they profit, the country must also profit. Moreover, the current investment trend has shifted towards value rather than just profit,” he concluded.