Indonesia continues to attract strong interest from global investors. Its large consumer market, young workforce, and abundant natural resources remain some of the country’s biggest competitive advantages. Yet despite this growing interest, many investment projects are taking much longer than expected to move forward.
Business leaders believe the challenge is no longer attracting investors. Instead, the real issue is turning investment commitments into operational businesses that generate jobs, exports, and economic growth.
According to Akhmad Ma’ruf Maulana, Chairman of the Indonesian Industrial Estate Association (HKI), Indonesia already has the ingredients needed to become one of Asia’s most competitive investment destinations. Global investors continue to visit Indonesia, select business locations, and begin their investment process. Many have even become part of the industrial ecosystems developing across Indonesia’s industrial estates.
“Indonesia is not lacking investors. We see firsthand how investors come, select locations, begin the investment process, and many of them even become part of the growing industrial ecosystem in the industrial estates we manage,” said Ma’ruf.
However, attracting investors is only the beginning. Many projects have yet to progress into factory construction, manufacturing activities, export operations, or job creation. HKI believes this gap remains one of Indonesia’s biggest investment challenges today.
“Our biggest challenge is turning investment interest into factory construction, production activities, exports, and job creation as quickly as possible. Therefore, we hope to present various recommendations directly to the President, based on the real experiences of industrial estate managers throughout Indonesia,” he said.
Read also: After Months of Decline, Indonesia Manufacturing Is Growing Again
Ma’ruf also explained that the way international investors evaluate investment destinations has changed significantly. Large markets and rich natural resources are no longer enough on their own. Investors now pay close attention to how quickly governments can provide business certainty and move projects forward.
From an investor’s perspective, Indonesia is viewed as one investment destination rather than a collection of separate ministries or government agencies. They are less concerned about which institution is responsible for a particular issue. Instead, they expect the entire investment process to work as one coordinated system.
“Investors do not see issues based on the authority of each ministry or institution. They see Indonesia as an investment destination. Therefore, solutions must also be delivered through an integrated system that provides certainty, speed, and consistency,” he explained.
For global businesses, success is measured by how quickly a project can move from planning to operation. The number of agencies involved in licensing matters far less than the speed of approvals and project execution. Every stage, including spatial planning, environmental permits, land acquisition, energy availability, and supporting infrastructure, contributes to the overall level of investment certainty.
Despite ongoing efforts to improve the investment climate, several bottlenecks continue to slow project implementation. These include difficulties in synchronizing spatial planning with land administration, licensing procedures that require approvals from multiple institutions, uncertainty over electricity and gas supplies for industrial operations, environmental approvals, the construction of roads, ports, toll roads, and railway connections, as well as coordination between the central government and regional administrations.
These delays come with significant economic consequences. Longer project timelines increase operating costs and weaken Indonesia’s competitiveness against neighboring countries that are also competing aggressively to attract international investment.
Ma’ruf stressed that the impact extends far beyond postponed factory construction.
“Every delayed investment means more than just a delayed factory. It also delays job creation, exports, technology transfer, local business growth, and government revenue. That is why investment issues must be treated as a national strategic priority that requires integrated solutions,” he emphasized.
His remarks highlight an important reality for Indonesia’s investment ambitions. The country already has what many investors are looking for. The next challenge is ensuring that strong investor interest can be converted into real projects that create lasting economic value. Achieving that goal will require faster coordination, more efficient regulations, and greater certainty throughout the entire investment process.
