DIGIVESTASI – Investment in Indonesia Hampered by Licensing Processes and Legal Uncertainty

Foreign investor interest in Indonesia has been hindered by several classic factors, one of which is the slow licensing process. This was revealed by the President's Special Economic Advisor, Bambang Permadi Soemantri Brodjonegoro, during the MINDialogue event held at The Energy Building in Jakarta on Thursday, January 9.

"We are facing a classic problem, which is the length of the licensing process," Bambang stated.

In addition, legal uncertainty has also become a major consideration for foreign investors who are reluctant to invest in Indonesia. According to Bambang, legal certainty is crucial for investors when assessing the potential for investment activities in a country.

"The second issue is legal certainty," he emphasized.

Bambang also added that Indonesia is still seen as having a high-cost economy, which investors experience due to the high costs involved in the licensing process and various other procedures.

"They want an economy with lower costs, such as a low-cost economy. However, Indonesia is still often regarded as a high-cost economy, so we have a lot of homework to do in solving issues related to licensing, administration, and bureaucracy concerning investment," Bambang explained.

As a result, many investors have chosen to invest in neighboring countries like Vietnam and Malaysia. In fact, some investors have decided to shift their investments to these countries after facing obstacles in Indonesia.

"When they encounter difficulties investing in Indonesia and see neighboring countries like Malaysia, Vietnam, or Thailand, they will easily move their investments there," Bambang said.