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Foreign firms wary of more red tape from potential cabinet expansion
Talks of a potential cabinet expansion under the incoming government has left foreign businesses and experts leery of more red tape that could hamper Indonesia's ease of doing business as a result of unnecessary complexities in both regulatory and interinstitutional coordination.
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Defense Minister Prabowo Subianto (center, rear) attends a briefing on Aug. 7, 2024 at the Defense Ministry in Central Jakarta for Indonesian Military (TNI) health workers departing on a humanitarian mission in the Middle East. (Antara/Hafidz Mubarak A)
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oreign businesses say the plan of Prabowo Subianto’s incoming administration to expand the cabinet risked increasing bureaucratic hurdles, which might complicate doing business and harm the investment climate in Indonesia, though it could help focus policies if done right.
A representative from the British Chamber of Commerce in Indonesia (BritCham Indonesia) told The Jakarta Post on Friday that it was critical for any upcoming changes to be structured “in a way that is perceived to ease the challenges of doing business”, to encourage more foreign direct investment and attain the envisioned 8 percent growth in gross domestic product.
“While the expansion of ministries could bring about specialized focus and potentially better governance in certain sectors, it also poses risks of increased bureaucracy and regulatory complexity,” said the BritCham representative, who declined to be named
The government also needed to keep stakeholders informed so they could “adapt to the regulatory landscape to navigate these changes effectively”, they added.
“Advanced consultation with domestic and foreign [business] chambers, for example, could be an effective way to get the intended best impacts from the proposals.”
Likewise on Friday, Lydia Ruddy, managing director of the American Chamber of Commerce in Indonesia, told the Post that “a larger cabinet can go either way”. She also noted that “what is important is openness to working with the private sector and good coordination”.
Prabowo is to be inaugurated as Indonesia’s eighth president on Oct. 20. To date, he has not provided any details on the cabinet structure or the size of his administration, either privately or publicly.
