Legal Certainty for Investors is crucial for attracting investment in Indonesia. Eko Prasetyo, a researcher from the Forum Indonesia Sejahtera (FIS), emphasized the need for the government to take more serious measures to ensure a comfortable environment for investors.
“Legal certainty and simple procedures are the main factors in attracting investment. Without these two elements, Indonesia’s investment competitiveness could fall further behind compared to other countries in the ASEAN region.” He stated, as reported by sindonews.com.
This highlights the pressing need for the Indonesian government to prioritize legal frameworks that foster investor confidence and economic growth.
Political Stability in Fostering Investment
Apart from legal certainty, political stability has also proven to be essential for fostering a stable investment environment. “Foreign investors do not only consider security factors, but also legal certainty and political stability as primary conditions for investing.” He explained.
Eko further emphasized that President Prabowo Subianto’s diplomatic efforts will be in vain if investment governance in Indonesia is not improved.
If regulations continue to change and policies remain inconsistent, investors will likely choose other countries that offer better guarantees. Thus, establishing a solid legal framework is crucial for attracting foreign direct investment and ensuring sustainable economic growth.
Regulatory Framework Challenges
The regulatory framework in Indonesia presents significant challenges for investors. Eko pointed out that despite the government’s attempts to reform regulations, implementation often encounters various obstacles.
This complexity leads to investor reluctance, primarily due to the lengthy and frequently changing licensing processes “Complicated procedures and a lack of transparency in licensing are also major hindering factors. If this issue is not addressed, it will be difficult for Indonesia to compete with other countries in attracting investment.” He said.
To enhance the investment climate, the government must streamline these processes and improve transparency, ensuring that investors feel secure and supported in their ventures.
Government Policies on Investment: A Call to Action
The government plays a vital role in establishing legal certainty. By fostering a stable and transparent regulatory environment, the government can enhance investor confidence. This requires simplifying bureaucratic processes and ensuring consistent application of laws.
Eko Prasetyo urged the government to promptly improve investment governance by providing clear legal certainty and streamlining procedures. Such actions could significantly boost Indonesia’s appeal to foreign investors and positively impact national economic growth.
He also pointed out that countries in the ASEAN region, like Vietnam, have become increasingly attractive to investors due to their commitment to ease of doing business and strong government support. Vietnam’s superior legal certainty and political stability further highlight the need for Indonesia to enhance its investment climate.
The Path Forward for Indonesia
Improving legal certainty and investment governance is essential for Indonesia’s economic growth. The government must prioritize regulatory reforms that simplify bureaucratic processes and ensure consistent application of laws.
By addressing these challenges, Indonesia can enhance its attractiveness to foreign investors, fostering a more competitive investment climate. Additionally, learning from successful ASEAN countries like Vietnam, which offer strong government commitment and legal stability, can provide valuable insights.
Ultimately, by creating a more transparent and predictable regulatory environment, Indonesia can unlock its full economic potential and drive sustainable growth for the future.
Source: nasional.sindonews.com
Image: Getty Images/Witoon Pongsit