Jakarta, April 9, 2025 – The Europe Today: President Prabowo Subianto of Indonesia has called for greater flexibility in the Domestic Component Level (TKDN) regulations to safeguard the country’s global competitiveness in industrial sectors. This statement came during a national economic forum held in Jakarta on Tuesday, where he responded to recommendations from economists urging the government to take steps that would strengthen Indonesia’s industrial standing on the world stage.
Key Statements from President Prabowo
President Prabowo emphasized that overly strict TKDN requirements could hurt Indonesia’s attractiveness to investors, potentially driving them to invest in more competitive nations. He acknowledged the need for a more realistic approach to TKDN, stating:
“We have to be realistic. If TKDN is forced, we will lose competitiveness. Let TKDN be flexible.”
He pointed out that the existing TKDN rules might be too rigid, leading some investors to opt for countries with more flexible industrial regulations.
Possible Solutions and Adjustments
President Prabowo proposed that the current system could be revised to provide incentives instead of rigid requirements. He encouraged his ministers and assistants to adopt a more pragmatic approach, saying:
“Perhaps it can be replaced with incentives. Please, my assistants, my ministers, let’s be realistic. Just make TKDN realistic.”
He also highlighted that the development of domestic products and technologies could still be advanced through investments in human capital, education, and scientific innovation.
Support for Economic Industrialization Principles
In addition to addressing the flexibility of TKDN regulations, Prabowo supported suggestions from economists to implement “neck-to-neck”, “eye-to-eye”, and “point-to-point” principles in the industrialization process. These principles are designed to create an environment where Indonesia can compete with other nations by offering more favorable conditions for investors.
“I’m interested in the neck-to-neck or eye-to-eye proposals — that’s extraordinary,” said President Prabowo, stressing that these strategies would significantly enhance Indonesia’s appeal as an investment destination.
Commitment to Deregulation
Prabowo also reiterated his administration’s commitment to wise deregulation. He called for the elimination of outdated regulations that impede industrial growth, particularly in licensing processes, noting:
“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.”
By streamlining regulatory processes, President Prabowo believes that Indonesia will be better positioned to attract both domestic and foreign investments and foster a more dynamic industrial sector in the long run.
