Foreign Investment Declines in Q2 2025, Rosan Says Due to Geopolitical Uncertainty

Minister of Investment and Downstreaming/Head of BKPM Rosan Perkasa Roeslani. (Photo: ANTARA)

JAKARTA - Minister of Investment and Downstream Investment/Head of the Investment Coordinating Board (BKPM) Rosan Perkasa Roeslani revealed a decline in realized foreign direct investment (PMA) in Indonesia in the second quarter of 2025, reaching only IDR 202.2 trillion, a 6.9 percent decrease compared to IDR 217.3 trillion in the second quarter of 2024.

Roeslani explained that this increase in geopolitical conflict is affecting investment trends worldwide.

"It cannot be denied that this escalating geopolitical situation is certainly affecting investment worldwide," Rosan said at a press conference on Tuesday, July 29.

Roeslani explained that domestic investors play a significant role in increasing investment in Indonesia.

"Of course, we are prioritizing domestic investors so they can invest in Indonesia," he said.

Roeslani added that competition to attract investment is currently increasingly fierce, and many countries, including the United States, are trying to attract investment back home through various strategic policies.

According to him, Indonesia needs to be able to navigate these dynamics carefully and precisely. As a response, the government continues to implement policy reforms.

He cited the recently issued amendment to a government regulation (PP), an example of which involved intensive presentations and discussions with 18 relevant ministries, until a consensus was reached on the importance of the change, in accordance with existing regulations and understandings.

"Because when we talk about potential, Indonesia has the greatest potential, perhaps one of the best. This includes minerals, plantations, agriculture, oceans, and so on. But what's the first homework? Certainty, the rule of law. That's what we're trying to improve first," he explained.

In addition to policy, he emphasized the importance of the government's proactivity in disseminating information about the various advances that have been achieved.

According to him, good policies will be ineffective if they are unknown to potential investors. Therefore, the government is encouraging representatives abroad to actively disseminate information about Indonesia's investment opportunities and policies.

"Second, human resources preparation before the rule of talent is introduced. We prepare for this from the start by providing, as I mentioned earlier, several initiatives and encouraging them to further develop their knowledge in the future. That's also very, very important. That's also one of the things they always ask about: the readiness of the rule of talent," he said.

Rosan also highlighted the importance of directly approaching foreign businesses, and the government has conveyed concrete steps it has taken to encourage investment.

"With the President visiting many countries, and thank God I always accompany him, I can say, there will definitely be sessions to meet with entrepreneurs in those countries. Well, that's also an opportunity, whether it's a small opportunity, maybe just 10 or 12 people, or a larger one," he said.

Rosan said that with Danantara's presence, they can play an active role in assisting investors. The government not only provides policy support but can also invest directly with foreign partners.

"Well, they also believe that if the government contributes funds, they believe the process will definitely be better and faster," he added.

However, Rosan admitted that convincing investors to invest in Indonesia is not easy.

"But, with the various efforts we've made, including improving policies, human resources, potential, and the process, thank God, this is possible. We hope it can continue to improve and become our desired target," he concluded.