Comparative Analysis of Investment Policies in Indonesia and Vietnam: Challenges, Opportunities, and Strategic Insights for FDI Optimization

  • Mohamed Alamin Ibrahim Yosif Infrastructure University, Kuala Lumpur, Malaysia
  • Husny Gibreel Musa Saleh Universitas Islam Internasional Indonesia
  • Dilbarova Malika Rahimjon Tashkent State University of Oriental Studies, Tashkent, Uzbekistan

Abstract

This study explores the comparative strengths and challenges of Indonesia and Vietnam in attracting foreign direct investment (FDI). Employing a comprehensive literature review and a comparative policy analysis framework, the research examines key factors influencing investment, including tax policies, labor markets, infrastructure, regulatory environments, and environmental sustainability. Findings reveal Vietnam's competitive advantages in centralized governance, lower labor costs, and rapid adoption of renewable energy, supported by trade agreements such as the CPTPP. In contrast, Indonesia's opportunities lie in its vast natural resources, ambitious infrastructure projects, and potential for energy and digital economy growth, though hampered by bureaucratic inefficiencies and regional disparities. Both countries show commitment to green growth, but Vietnam's progress outpaces Indonesia's in renewable energy adoption. Recommendations include enhancing regulatory efficiency, promoting sustainable urban planning, and fostering ASEAN regional cooperation to attract and retain FDI. This study contributes novel insights into policy optimization, providing actionable strategies for policymakers and stakeholders to bolster economic growth in Southeast Asia.

References

Asian Development Bank. (2023). Urban infrastructure and sustainable development in Southeast Asia. Retrieved from https://www.adb.org

Nguyen, A., & Tran, T. (2022). Efficiency of FDI in Vietnam: A regional analysis. Journal of Economic Studies, 49(3), 567-589.

OECD. (2021). Investment Policy Reviews: Indonesia. Paris: Organisation for Economic Co-operation and Development. Retrieved from https://www.oecd.org

UNCTAD. (2022). World Investment Report 2022: International tax reforms and sustainable investment. Geneva: United Nations Conference on Trade and Development. Retrieved from https://unctad.org

Vietnam Ministry of Planning and Investment. (2023). Vietnam’s FDI strategies for sustainable growth. Retrieved from https://www.mpi.gov.vn

World Bank. (2020). Doing Business Report 2020: Comparing business regulations in 190 economies. Washington, DC: The World Bank. Retrieved from https://www.worldbank.org

Published
2025-01-30
How to Cite
Yosif, M. A. I., Gibreel Musa Saleh, H., & Rahimjon, D. M. (2025). Comparative Analysis of Investment Policies in Indonesia and Vietnam: Challenges, Opportunities, and Strategic Insights for FDI Optimization. JIAN - Jurnal Ilmiah Administrasi Negara, 9(1), 75-82. https://doi.org/10.56071/jian.v9i1.1160