Prabowo Orders Major Deregulation to Boost Labor-Intensive Industries
Main Takeaways
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JAKARTA, investortrust.id – President Prabowo Subianto led a high-level meeting with the National Economic Council at Merdeka Palace, Jakarta, on Wednesday, March 19, 2025. The discussion focused on strengthening labor-intensive industries to enhance competitiveness, boost employment, and accelerate investment.
During the meeting, Prabowo instructed a large-scale deregulation initiative targeting key labor-intensive sectors, including textiles, footwear, and other manufacturing industries. This move aims to streamline business processes, reduce regulatory bottlenecks, and attract both domestic and foreign investors.
Revitalizing the Textile Sector
Coordinating Minister for Economic Affairs Airlangga Hartarto emphasized the government’s commitment to revitalizing the textile and textile product (TPT) sector, which currently employs nearly 4 million workers and generates over $2 billion in exports annually.
"The first directive is to review the entire supply chain and harmonize existing tariff structures. Second, we must address unfair competition by enforcing anti-dumping measures. The government will establish a special task force to accelerate these efforts," Airlangga stated in a press briefing after the meeting.
Labor-Intensive Industries to Gain Strategic Status
Prabowo also pushed for labor-intensive industries to be included in Indonesia’s list of National Strategic Projects (PSN), a designation that provides businesses with expedited licensing processes and various incentives.
To sustain industrial competitiveness, the government will roll out a production machinery revitalization program. Under this scheme, Rp 20 trillion ($1.3 billion) in investment credit will be made available, with a 5% interest rate subsidy for businesses in sectors such as textiles, footwear, food and beverage, and furniture.
"We expect that with proper handling of labor-intensive industries, new job opportunities will be created. Furthermore, following the implementation of the EU-Indonesia Comprehensive Economic Partnership Agreement (EU CEPA), we anticipate a resurgence in these industries," Airlangga added.
Swift Implementation of Deregulation Measures
Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan confirmed that the government will promptly implement Prabowo’s directives, with a follow-up limited meeting scheduled in the coming week.
“This is a clear directive, and we will act on it immediately. The upcoming limited meeting will finalize steps to eliminate regulatory obstacles that hinder industrial growth in Indonesia,” Luhut stated.
Luhut also underscored the importance of strict oversight to ensure the success of the deregulation measures.
“The President's instructions were clear and strategic. Deregulation will curb corruption, enhance efficiency, and create a stronger economic ecosystem,” he added.