Rp1,500 Trillion in Investment Unrealised in 2024 Due to Licensing and Competitiveness Issues
Attracting investors to do business in Indonesia is no easy task, particularly amid worsening global economic uncertainty. Many capital owners are holding back funds from investing in various destination countries, including Indonesia.
Deputy Minister of Investment and Downstreaming/Deputy Head of the Investment Coordinating Board (BKPM), Todotua Pasaribu, acknowledged that a significant volume of investment failed to materialise last year, amounting to approximately Rp1,500 trillion.
Todotua cited licensing issues and competitiveness as the main barriers to investment entering Indonesia. Going forward, the government will continue seeking solutions to the problems that have long hindered investment. President Prabowo Subianto, he noted, consistently reminds the government that it must be competitive in order to attract investment to Indonesia.
"The figures we observed in 2024 show a quite significant amount of around Rp1,500 trillion in unrealised investment. What are the main contributing factors? Service delivery and licensing, for one. Ease of investing, secondly. Thirdly, competitiveness. These are areas where we must achieve a breakthrough," Todotua said in Jakarta on Monday (28 April 2025).
Todotua expressed optimism that investment flowing into Indonesia could reach Rp13,032 trillion by 2030. This target must be achieved to realise eight per cent economic growth. For this year, the target stands at Rp1,905 trillion, with Rp465 trillion realised in the first quarter of 2025.
"However, we are confident that if we can address those three issues — licensing, ease of investing, and the level of competitiveness for investing in Indonesia — these are all achievable goals," he said.
According to Todotua, the Ministry of Investment and Downstreaming/BKPM continues to improve the investment licensing process. The Online Single Submission (OSS) platform for business facilitation is being continually enhanced, and the implementation of a "fictive positive" mechanism is expected in the near future.
Currently, businesses must apply for permits from various ministries and agencies before the final licence from the Ministry of Investment and Downstreaming/BKPM is issued. In practice, this process can take months.
Under the fictive positive scheme, business permits would be automatically issued if the relevant ministry or technical agency fails to render a decision within the stipulated timeframe. This would significantly reduce the licensing delays that many businesses have long complained about.
"In the near future, we will also implement the fictive positive policy, through which we aim to provide fast and certain licensing services to incoming investors," he added.
Deputy Minister of Investment and Downstreaming/Deputy Head of the Investment Coordinating Board (BKPM), Todotua Pasaribu, acknowledged that a significant volume of investment failed to materialise last year, amounting to approximately Rp1,500 trillion.
Todotua cited licensing issues and competitiveness as the main barriers to investment entering Indonesia. Going forward, the government will continue seeking solutions to the problems that have long hindered investment. President Prabowo Subianto, he noted, consistently reminds the government that it must be competitive in order to attract investment to Indonesia.
"The figures we observed in 2024 show a quite significant amount of around Rp1,500 trillion in unrealised investment. What are the main contributing factors? Service delivery and licensing, for one. Ease of investing, secondly. Thirdly, competitiveness. These are areas where we must achieve a breakthrough," Todotua said in Jakarta on Monday (28 April 2025).
Todotua expressed optimism that investment flowing into Indonesia could reach Rp13,032 trillion by 2030. This target must be achieved to realise eight per cent economic growth. For this year, the target stands at Rp1,905 trillion, with Rp465 trillion realised in the first quarter of 2025.
"However, we are confident that if we can address those three issues — licensing, ease of investing, and the level of competitiveness for investing in Indonesia — these are all achievable goals," he said.
According to Todotua, the Ministry of Investment and Downstreaming/BKPM continues to improve the investment licensing process. The Online Single Submission (OSS) platform for business facilitation is being continually enhanced, and the implementation of a "fictive positive" mechanism is expected in the near future.
Currently, businesses must apply for permits from various ministries and agencies before the final licence from the Ministry of Investment and Downstreaming/BKPM is issued. In practice, this process can take months.
Under the fictive positive scheme, business permits would be automatically issued if the relevant ministry or technical agency fails to render a decision within the stipulated timeframe. This would significantly reduce the licensing delays that many businesses have long complained about.
"In the near future, we will also implement the fictive positive policy, through which we aim to provide fast and certain licensing services to incoming investors," he added.