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Overview of Indonesia's Economic Landscape and Dispute Resolution Challenges

Author: Admin, Fri, Dec 15th 2023, 10:58


Michel Rako, presenting for DeHeng Law Offices, provides a comprehensive overview of Indonesia's economic status and challenges in dispute resolution. The country boasts the largest economy in Southeast Asia, surpassing a 1 trillion USD GDP, with a 5% growth in 2023.

Economic Highlights

- Q3 2023 sees a remarkable 7% increase in Indonesian investment realization, reaching 24 billion USD.
- Foreign Direct Investment rises by 4.7 billion USD in September 2023.
- China stands as the second-largest investor in Indonesia.

Key Challenges in Dispute Resolutions

1. Contract Enforcement in Indonesian Court:
   - Lack of a streamlined process; parties are actively involved in execution.

2. Overlapping Regulations:
   - Numerous government bodies issue regulations, causing overlaps and complexities.

3. Corruption:
   - The Anti-Corruption Behavior Index decreases slightly to 3.92 in 2023.

4. Enforcement of International Arbitration Awards:
   - Despite ratifying the New York Arbitration Convention, courts remain hesitant.

Dispute Resolution Mechanism in Indonesia:

   - Integral to Indonesian society and mandatory in civil trials.
   - Seven mediation bodies exist.

   - Bodies include BANI, LAPS SJK, and BASYARNAS.
   - Challenges include non-alignment with UNCITRAL Model Law and difficulties in enforcement.

Legal System Structure
- Three tiers of courts: District Court, High Court, and Supreme Court.
- Lengthy court litigation process with appeals and cassation, potentially taking years for full enforcement.


Michel Rako's presentation for DeHeng Law Offices provides valuable insights into Indonesia's economic growth, investment trends, and the complexities within its legal landscape. The challenges in dispute resolution underscore the need for strategic legal navigation in the Indonesian business environment.