Indonesia Urged to Accelerate Investment Realization Amid Global Uncertainty

Indonesia's investment landscape shows resilience, with realization hitting Rp 1,010.6 trillion in the first half of 2026, nearly half of the year's target. This performance, noted by the Ministry of Investment/BKPM, indicates sustained investor interest amid global economic uncertainty. However, the focus now shifts from attracting commitments to ensuring these investments translate into tangible, productive projects.

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However, the challenge in the second semester is no longer attracting investment commitments, but ensuring that these investments are immediately realized into productive projects.

M. Rizal Taufikurahman, head of Macroeconomics and Finance at the Institute for Development of Economics and Finance (Indef), stressed the need for accelerated project execution. He called for streamlined permitting processes, regulatory stability, improved infrastructure development, and the removal of on-the-ground obstacles. "Investment must not only be high in nominal terms but also capable of driving economic growth and enhancing national production capacity," Rizal stated.

The nation's investment climate benefits from a large domestic market, ongoing downstreaming initiatives, and stable macroeconomics. Yet, investors are expected to become more selective in the second half of 2026 due to global uncertainties, geopolitical tensions, and high financing costs. Sectors promising high returns and value addition, such as mineral downstreaming, manufacturing, digital economy, data centers, energy, and logistics, are likely to attract more capital. Policy consistency is deemed crucial for Indonesia to remain competitive in the region.

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This means that investment is not only high nominally, but also capable of driving economic growth and increasing national production capacity.

While the first half of 2026 saw a 15% increase in job creation, reaching 1.44 million workers, Indef cautioned against viewing this as the sole measure of investment quality. True success, according to Rizal, is determined by productivity, wage levels, technology transfer, workforce skill enhancement, and the overall value added. The policy orientation should therefore evolve from merely chasing realization figures to fostering more productive, inclusive, and sustainable investments that bolster national industrial competitiveness and public welfare.

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Investment policy orientation needs to shift from merely pursuing the magnitude of realization to more productive, inclusive, and sustainable investments so as to strengthen national industrial competitiveness while improving community welfare.