Japanese Investment in Indonesia Remains Strong, Expert Says, Refuting Claims of Failed MoUs

An investment expert has challenged the notion that Japanese investment in Indonesia is faltering, citing criticism from a Japanese businessman regarding numerous unfulfilled Memoranda of Understanding (MoUs). Zenzia Sianica Ihza, an investment and international relations observer, stated that investment data actually indicates a positive trend, contradicting the pessimistic outlook.

According to data from Indonesia's Ministry of Investment/Investment Coordinating Board (BKPM), the realization of Japanese investment in Indonesia between 2021 and 2025 has shown robust growth, averaging 13.2% per year. During this period, total Japanese investment reached $17.1 billion and created 278,887 jobs. Japan consistently ranks as the fifth-largest investor in Indonesia.

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The criticism made by Japanese businessman Yutaka Tokunaga about many MoUs not being realized into projects is not entirely true. Data shows Japanese investment continues to grow positively and is one of the largest in Indonesia. Therefore, this phenomenon cannot be used as a comprehensive picture of the investment climate in the country.

"The criticism made by Japanese businessman Yutaka Tokunaga about many MoUs not being realized into projects is not entirely true. Data shows Japanese investment continues to grow positively and is one of the largest in Indonesia. Therefore, this phenomenon cannot be used as a comprehensive picture of the investment climate in the country," Zenzia explained in Jakarta on Tuesday, June 9, 2026.

Tokunaga, who has a long business history in Indonesia, had previously highlighted that many MoUs signed between Japanese and Indonesian businesses, despite receiving significant attention, did not lead to tangible project developments. He shared these views in a publication on June 1, 2026.

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Throughout the world, MoUs are the initial stage for building commitment and exploring cooperation opportunities. Not all MoUs proceed to the implementation stage. Many stop after feasibility studies due to business considerations, changes in market conditions, or investment risk evaluations.

Zenzia clarified that in international business, MoUs serve as initial exploration instruments and do not always culminate in investment contracts or business projects. "Throughout the world, MoUs are the initial stage for building commitment and exploring cooperation opportunities. Not all MoUs proceed to the implementation stage. Many stop after feasibility studies due to business considerations, changes in market conditions, or investment risk evaluations," she noted.

She further argued that realized investments, which are actually channeled into the national economy, are a more relevant indicator of investor confidence than the sheer number of signed MoUs. "For Indonesia-Japan economic relations, the data actually shows a positive trend. If Japanese investors did not trust Indonesia, they would not continue to increase their investments every year and expand their production base here," Zenzia concluded, referencing the Ministry of Investment data that consistently places Indonesia as a key investment destination in Southeast Asia for Japanese investors over the past five years.

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For Indonesia-Japan economic relations, the data actually shows a positive trend. If Japanese investors did not trust Indonesia, they would not continue to increase their investments every year and expand their production base here.