President Prabowo Calls for Flexibility in Indonesia’s Domestic Component Regulations to Boost Global Competitiveness
Jakarta, The Gulf Observer: Indonesia’s President, Prabowo Subianto, has instructed his ministers to make adjustments to the country’s domestic component level (TKDN) regulations to ensure that Indonesian industries remain globally competitive. The President made this statement during a national economic forum in Jakarta on Tuesday, addressing concerns raised by economists regarding Indonesia’s position in global industrialization.
“We have to be realistic. If TKDN is forced, we will lose competitiveness. Let TKDN be flexible,” Prabowo said, acknowledging that the current regulations might be too rigid and could lead some investors to bypass Indonesia in favor of other countries.
The President suggested revising the existing mechanism, possibly by offering incentives instead of stringent requirements. “Perhaps it can be replaced with incentives. Please, my assistants, my ministers, let’s be realistic. Just make TKDN realistic,” he added.
Prabowo emphasized that, despite these adjustments, the development of domestic products could still advance through other means, particularly by investing in human capital, education, and the fields of science and technology.
In addition to advocating for more flexible TKDN rules, Prabowo expressed support for the economic recommendations to adopt the principles of “neck-to-neck, eye-to-eye, and point-to-point” to further promote industrialization in Indonesia. These principles, he explained, would help make Indonesia a more attractive destination for investors by offering conditions that rival those of competing nations.
“I’m interested in the neck-to-neck or eye-to-eye proposals — that’s extraordinary,” the President remarked, highlighting the significance of the proposed industrial strategies.
Reaffirming his administration’s commitment to wise deregulation, Prabowo stressed the need to eliminate outdated regulations that impede industrial growth. “This deregulation — I am committed to cutting down on complicated licensing systems. There are just too many. This has become our mission, and we must carry it out,” he concluded.
The President’s remarks signal a continued effort to enhance Indonesia’s industrial competitiveness and streamline its regulatory framework to attract investment and foster economic growth.
