Two Years of Prabowo-Gibran (4): Investors Arrive, Business Certainty Remains the Ultimate Test
Investment has become a vital indicator for assessing the direction of the Indonesian economy during the nearly two-year administration of President Prabowo Subianto and Vice President Gibran Rakabuming Raka. Investment value continues to rise, with foreign and domestic capital showing a relatively balanced composition.
However, the influx of investment is not the end of the matter. The next challenge is ensuring that investors can realise projects, operate businesses, expand, and build production chains within a business environment that provides certainty.
The Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) noted that investment realisation throughout 2025 reached Rp 1,931.2 trillion, a 12.7% increase compared to the previous year, surpassing the target of Rp 1,905.6 trillion.
In the first half of 2026, investment realisation reached Rp 1,010.6 trillion, representing a year-on-year growth of 7.2%. This achievement is equivalent to 49.5% of the 2026 investment target of Rp 2,041.3 trillion and has absorbed 1,448,862 Indonesian workers.
Of the total investment in the first half of 2026, Foreign Direct Investment (FDI) reached Rp 507.6 trillion or 50.2%, while Domestic Direct Investment (DDI) stood at Rp 502.9 trillion or 49.8%.
Interestingly, investment outside Java was slightly higher than in Java. Investment outside Java reached Rp 507.8 trillion or 50.2%, whereas Java accounted for Rp 502.8 trillion or 49.8%.
These data show that investment is not only reliant on domestic or foreign capital but is also beginning to spread more widely geographically. However, investment realisation figures must be viewed alongside the ability of the business world to face various obstacles once projects commence.
Certainty of Licensing
One aspect the government continues to improve is the business licensing system.
The government issued Government Regulation (PP) Number 28 of 2025 regarding Risk-Based Business Licensing, replacing PP Number 5 of 2021. This regulation governs basic requirements, business licensing, the OSS system, supervision, and the resolution of problems and obstacles in business activities.
The regulation also strengthens the guarantee of service quality or service level agreements in the licensing process, including certainty regarding service timeframes. A ‘positive fiction’ mechanism has also been implemented in several provisions.
For the business community, such certainty is crucial because investment decisions are not determined solely by market size or resource availability. The time taken to obtain permits, regulatory certainty, land availability, infrastructure, energy, and the ability to resolve project obstacles also determine investment costs.
The Ministry of Investment and Downstreaming/BKPM has made licensing certainty, construction speed, and the resolution of field obstacles its primary focus in improving the investment climate.
The government also targets an investment realisation of Rp 2,322 trillion for 2027, a 13.8% increase from the 2026 target. To achieve this, the government stated it will continue to strengthen the OSS system and accelerate the licensing process and project realisation.
After Investors Arrive
For the business world, the issue of the investment climate does not end with the government’s ability to attract capital.
The General Chairwoman of the Indonesian Employers Association (Apindo), Shinta W. Kamdani, previously stated that investment developments show a positive direction. However, the sustainability of investment also requires policy certainty and the government’s ability to resolve various issues faced by the business community.
“From an investment perspective, national realisation increased from Rp 1,714.2 trillion in 2024 to Rp 1,931.2 trillion in 2025, growing by 12.7% (yoy), and in the first half of 2026, it reached Rp 1,010.6 trillion, growing by 7.2% (yoy),” Shinta told Beritasatu.com.
This certainty is increasingly important as the character of investment in Indonesia continues to evolve. Incoming investment is increasingly directed towards processing industries, mining, transportation and warehousing, telecommunications, and industrial estates.
In the first half of 2026, the basic metal and metal goods industry was the sector with the largest investment realisation, followed by other services, mining, transportation and warehousing, telecommunications, and housing, industrial estates, and offices.
This means that as more investment is directed towards productive sectors and industries, certainty regarding production costs and business continuity becomes even more vital.
Energy prices, logistics, financing, labour, raw materials, and regulatory certainty can determine whether an investment remains merely at the stage of facility construction or develops into long-term production activities.
On the other hand, investment also needs to have stronger links with the domestic economy. Investment projects that operate in isolation will have a different impact compared to investments that involve local suppliers, supporting industries, Indonesian labour, and micro, small, and medium enterprises within their production chains.
Cost issues are also a concern for the business community. Shinta noted that the burden of the ‘high-cost economy’ is formed by various components, ranging from energy, logistics, and financing to labour, regulation, and supply chain efficiency.
“Apindo views that the high-cost economy remains one of the structural issues that needs to be resolved, as it directly affects the productivity and competitiveness of industry,” she explained.