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View all search resultsFinancial hub on shaky ground
Rushing the newly planned financial center through an opaque, three-week legislative blitz risks creating an unstable tax haven and sidelines the deep, system-wide economic reforms the country actually needs.
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People wait at the Sudirman Central Business District (SCBD) bus shelter in South Jakarta on Sept. 2, 2025. (Reuters/Willy Kurniawan)
S
ince taking office two years ago, President Prabowo Subianto has unveiled a series of ambitious economic initiatives. Yet many share a common flaw: a distinct lack of transparency from conception to execution.
For example, state asset fund Danantara has yet to publish its 2025 financial report, while the government’s plan to centralize exports has left local businesses bewildered over its implementation.
Its latest plan, to establish the Indonesia International Financial Center (PFII) to attract foreign investment, now risks following the same path. This is particularly indicated by the swift passage of the PFII Bill into law on July 21, less than three weeks after the first official drafting meeting on July 2.
A flurry of consultations and closed-door deliberations stretched over the weekend and into Monday, in a clear rush to push the legislation across the finish line.
Such a compressed legislative process leaves little room for public scrutiny or thorough debate, a troubling reality for a law that could reshape the country’s financial landscape for decades to come.
Already, this hasty timeline has produced conflicting signals from within the ruling coalition.
Golkar lawmaker Mukhamad Misbakhun, who chairs House of Representatives Commission XI overseeing financial affairs, said the government planned to offer a zero percent tax rate for up to 50 years. This incentive, he argued, would encourage Indonesians to repatriate investments held by special purpose vehicles (SPVs) in tax havens like the British Virgin Islands, the Cayman Islands and Labuan, Malaysia.
