Prabowo’s Indonesia Investment Plan aims to achieve 8% economic growth by 2029. To reach this ambitious target, Indonesia needs Rp 47.573 trillion (approximately USD 3 trillion) in investments from 2025 to 2029.
The majority of this funding must come from private-sector investors, as outlined in Presidential Regulation No. 12 of 2025. The government sees private investment as the key driver for economic transformation during this period.
Understanding Prabowo’s Indonesia Investment Plan
Prabowo’s investment roadmap outlines an annual investment requirement of approximately USD 600 billion. This funding will come from the government, state-owned enterprises (SOE’s), and private sector investors. However, the government can only cover 7.22% (around USD 216 billion), while SOE’s contribute 6.13% (around USD 183 billion). The private sector will shoulder the largest share, contributing 86.65% (around USD 3 trillion).
The government stresses that efficient and transformative investment is crucial for sustained economic expansion. “An efficient and transformative investment approach is one of the keys to driving the economy in 2025-2029,” states the regulation, as reported by katadata.co.id.
Private Sector’s Role in Economic Growth
Since the government and SOE’s have limited funds, the private sector must play a leading role in achieving these investment goals. The financial sector, including bank loans, stock issuance, and corporate bonds, will be a major funding source.
The regulation highlights that “The contribution of the financial sector, including banking, stocks, and corporate bonds, is targeted to reach an average of 20.73% per year from 2025-2029.”
Investment is expected to focus on key industries, such as infrastructure, manufacturing, and the digital economy. The government also plans to expand investment incentives to attract both foreign and domestic investors.
Challenges Facing Prabowo’s Investment Plan
While the plan presents a bold vision, several challenges could hinder progress:
- Regulatory Barriers: Complex bureaucracy and investment regulations may slow private sector participation.
- Investor Confidence: Political and economic stability are critical factors that investors consider before committing funds.
- Financing Constraints: Expanding investment access, especially for small and medium enterprises, remains a priority.
To address these challenges, the government plans to deepen financial sector reforms. “Accelerating financial sector development is not only focused on banking but also on non-bank financial institutions, including the capital market,” the regulation states. Additionally, the government will explore alternative financing methods, such as Islamic social funds like zakat and waqf, which have significant potential.
Future Outlook for Indonesia’s Economic Growth
Experts remain optimistic about Indonesia’s long-term growth potential. The private sector is expected to drive job creation, infrastructure development, and overall economic productivity. To support this, the government will implement policies to enhance investor confidence and ease of doing business.
Regional investment expansion will also play a crucial role. The regulation highlights the need for inclusive growth, stating, “Investment sector deepening will be carried out in various regions to support more inclusive and sustainable development.” Strengthening coordination between central and regional governments will be essential to ensuring the smooth implementation of these policies.
Final Thoughts on Indonesia’s Investment Strategy
Prabowo’s Indonesia Investment Plan presents a bold strategy for economic transformation. By leveraging private sector investment, the government aims to meet its ambitious Rp 47.573 trillion (USD 3 trillion) target and achieve 8% economic growth by 2029. However, success depends on policy reforms, investor confidence, and strong collaboration between public and private sectors. With the right strategies in place, Indonesia has the potential to strengthen its economy and attract long-term investments.
Source: katadata.co.id, rri.co.id
Image: REUTERS/Ajeng Dinar Ulfiana/Pool
