Indonesia’s New Presidents: Attracting Foreign Direct Investment Amid Global Uncertainty

Introduction
Indonesia stands at a crossroads as Prabowo Subianto and Gibran Rakabuming Raka assume the nation’s highest offices. Their administration is tasked with sustaining economic momentum amid a challenging global landscape characterized by geopolitical tensions, volatile markets, rising protectionism, and climate change pressures. Foreign Direct Investment (FDI) will play a pivotal role in Indonesia’s efforts to stimulate growth, diversify its economy, and develop strategic sectors such as green energy, technology, and manufacturing.

This article provides a detailed exploration of Indonesia’s economic outlook under the new leadership, examining theoretical frameworks, sectoral priorities, global investment trends, risks, and actionable policy recommendations.

I. The Importance of FDI in Economic Development

FDI plays a critical role in emerging markets by providing not only financial capital but also technology, knowledge transfer, and global market access. According to Dunning’s Eclectic Paradigm (OLI Model), investors are attracted to a country based on Ownership, Location, and Internalization advantages. For Indonesia, leveraging its natural resources, strategic location in…