Under fire: Motorists queue at a PT Pertamina gas station in Jakarta. Weeks after a change of government in Indonesia, reports from the EU have criticised the lack of transparency in the country. — Bloomberg
“Businesses demand regulatory certainty and consistency,” Carsten Sorensen, head of trade and economic affairs at the EU Delegation to Indonesia and Brunei Darussalam, said during the report’s launch on Monday.The American Chamber of Commerce in Indonesia flagged similar frustrations in its report published on Nov 26, explaining that regulatory hurdles posed significant risks for foreign investors, particularly those aiming for long-term operations.
This, according to the report, led many to adopt a wait-and-see stance on President Prabowo Subianto’s push for energy self-sufficiency, recalling past losses from revoked concessions and government pressure that had made the energy sector a hard sell to risk-averse corporate leaders. “US firms are adopting a more cautious approach due to global uncertainties,” AmCham’s report notes, as firms weighed “not only market potential but also the ease of doing business, bureaucracy and regulatory stability.”
“Only the EU can bring the kind of logistical and supply chain improvements that drive productivity gains, making it an indispensable partner for Indonesia’s manufacturing and export-oriented industries,” Chaibi added. While other countries were moving closer to the United States to attract spillover investments from China and even Vietnam, Indonesia was bogged down by internal consolidation and cabinet programmes, he added, among other tasks, such as improving manufacturing and the business environment.