President Prabowo Subianto has ordered a sweeping deregulation of Indonesia's complex licensing and permit system, directly criticizing bureaucratic obstacles that he argues are holding back foreign and domestic investment in Southeast Asia's largest economy.
The directive, reported by Babel Insight, came during a cabinet meeting where Prabowo instructed ministers to identify and eliminate redundant licensing requirements that add costs and delays to business operations without providing genuine public benefit. The president specifically targeted bureaucrats who create unnecessary regulatory barriers, signaling his frustration with implementation resistance.
Prabowo's deregulation push represents a continuation of economic reforms begun under his predecessor, Joko Widodo, who launched the Omnibus Law on Job Creation to streamline Indonesia's notoriously complex regulatory environment. However, the new president's more direct criticism of bureaucratic resistance suggests a more confrontational approach to reform implementation and a willingness to publicly challenge entrenched administrative interests.
The president specifically targeted the culture of "overlapping permissions" that requires businesses to navigate multiple government agencies for approval of single projects. In some sectors, companies must obtain dozens of separate permits from national, provincial, and local authorities—a process that can take years and create opportunities for rent-seeking behavior and corruption.
Indonesia's regulatory complexity has long been cited by foreign investors as a significant barrier to doing business in the country, despite its attractive market of 280 million people, abundant natural resources, and strategic location. The World Bank has previously ranked Indonesia lower than regional competitors like Vietnam, Thailand, and Malaysia on ease of doing business metrics, with licensing and permits identified as particular weaknesses.
