Jakarta, 20 January 2026— Indonesia stands at a critical crossroads in its political-economic landscape in 2026, with major opportunities arising from its demographic dividend, political and security stability, and the government’s strategic agenda to drive growth. However, this optimistic outlook remains overshadowed by increasingly uncertain global geopolitical dynamics.
This was conveyed by Burhanuddin Abdullah, Board of Advisors of Prasasti, in his Opening Remarks at the Prasasti Luncheon Talk 2026 entitled “Navigating the Economy Amid Global Uncertainty”, held on Thursday (15/1/2026) at The Ritz-Carlton Pacific Place, SCBD, South Jakarta.
Burhanuddin stated that despite a global environment that continues to be dynamic, challenging, and pressure-laden, Indonesia’s economic position remains relatively resilient, with growth hovering around 5 percent. He expressed hope that this figure could be boosted in 2026, provided the government is serious about undertaking structural reforms.
“Economic growth is closely linked to efficiency,” Burhanuddin said. According to him, several critical issues require in-depth review, including labor, technology utilization, and regulatory complexity, which he argued has become excessive. This regulatory complexity poses a serious obstacle to investment, particularly foreign investment.
He revealed that Indonesia currently has around 67,000 regulations, ranging from approximately 1,800 laws, presidential regulations, ministerial regulations, to various technical rules. This condition, he said, creates legal uncertainty and disrupts the business climate. The government, he added, intends to simplify regulations so that the business sector can operate more efficiently.
Burhanuddin also emphasized the importance of digitalization as a key accelerator of economic growth with significantly better capital efficiency. Prasasti’s 2025 research shows that digitalization has proven capable of reducing Indonesia’s Incremental Capital Output Ratio (ICOR) from 6.5 to 4.3, indicating more efficient capital utilization.
ICOR is a ratio that measures the additional capital (investment) required to generate one additional unit of economic output. In principle, a lower ICOR indicates more efficient investment. Data shows that the digital economy sector has a far lower ICOR score compared to other sectors.
Echoing this view, Prasasti’s Research Director, Gundy Cahyadi, explained that over the past five to six months, Prasasti has completed four major studies. These include research on the digital economy supporting the Ministry of National Development Planning (Bappenas), administrative and presidential systems, studies in two special economic zones in Central Java that have created new jobs, as well as an assessment of Indonesia’s tax system.
“We do not want research to stop at being research,” said Gundy. According to him, Prasasti’s research is directed to become collaborative work with the government so that it can have a direct impact on public policy.