The Indonesian government is putting finishing touches on a regulatory reform package aimed at boosting investment and enhancing the nation's economic resilience. The package, which is expected to address critical areas affecting foreign investments, is seen as a proactive response to mitigate the adverse effects of the ongoing US-China trade war.

According to Prof. Arief Anshory Yusuf, a member of the National Economic Council (DEN), these reforms are designed to encourage investments that will contribute to the country’s economic growth. "We are preparing the regulations so that they can immediately help bring in investments and increase spending," said Prof. Yusuf in a statement to CNBC Indonesia.

Government Accelerates Efforts to Attract Investments Amid Global Tensions

The new regulatory changes are expected to help mitigate the negative effects of the trade conflict between the U.S. and China, providing a boost to the Indonesian economy. These efforts are aimed at ensuring that the country remains a competitive destination for investment.

Key Changes: Flexibility in Local Content and Elimination of Import Quotas

A key part of the upcoming reforms focuses on offering more flexibility with the Domestic Content Requirement (TKDN) and eliminating import quotas. The move is expected to boost Indonesia’s competitiveness, especially in industries where local content has been a limiting factor for foreign companies. Prof. Yusuf emphasized that flexibility in the TKDN policy would help enhance the country's appeal to global investors.

Indonesia's President, Prabowo Subianto, had previously stated that strict TKDN regulations were putting the country at a disadvantage compared to its regional competitors. "TKDN needs to be realistic, and perhaps it should be replaced with incentives rather than rigid rules," he said during a recent economic discussion. He added that a flexible and realistic approach would allow Indonesia to attract more investment while ensuring that local industries are not overwhelmed by unnecessary restrictions.

President Prabowo Subianto has voiced his concerns about the impact of rigid TKDN rules on Indonesia's competitiveness. He has called for more flexibility and realism in these regulations to ensure that domestic industries can remain competitive in the global market.

PHOTO: SHUTTERSTOCK

This article was created with AI assistance.