Indonesia Loses Ground to Vietnam in FDI: Slow Licensing and Bureaucracy to Blame

Experts argue that Indonesia’s slow approval process, particularly in the construction and spatial planning sectors, poses a significant barrier to competitiveness. “Vietnam’s agility in catering to investor needs has set a benchmark for the region,” an analyst noted, urging Indonesian policymakers to prioritize reform.

To tackle these challenges, Indonesia has been exploring ways to improve its investment climate. Various reforms aimed at simplifying regulations and expediting approvals have been introduced but require consistent implementation to be effective. Perry emphasized that long-term solutions are essential to sustain investor confidence and boost economic growth.

Despite these challenges, Indonesia remains an attractive market due to its large domestic economy and strategic location. Sectors such as renewable energy and infrastructure development continue to draw significant interest from global investors. However, analysts stress that without addressing licensing inefficiencies, Indonesia risks losing out on significant FDI opportunities.

As the competition for foreign investment intensifies in Southeast Asia, Indonesia faces mounting pressure to streamline its processes and implement investor-friendly policies. With Vietnam already setting a strong precedent, Indonesia’s policymakers have their work cut out to bridge the gap and reclaim its position as a preferred destination for FDI in the region. (Uki Ruknuddin)