US Ambassador Criticizes the Indonesian Criminal Code; How Much Has the US Invested in Indonesia?

United States (US) Ambassador Sung Kim stated that the investment climate in Indonesia could be disrupted by the new Criminal Code (KUHP) enacted on Tuesday (December 6, 2022).

Sung Kim believes that several articles in the KUHP related to "morality" could potentially deter foreign investors from investing.

"We remain concerned that the morality clauses, which attempt to regulate what happens in the household between consenting adults, could negatively impact the investment climate in Indonesia," said Sung Kim in his press release on Tuesday (December 6, 2022).

This criticism from the US Ambassador relates, among other things, to the KUHP provision that criminalizes adultery. This provision is stipulated in Article 413 paragraph (1) part four, which states that perpetrators of extramarital sex can be threatened with one year imprisonment, with the offense being complaint-based.

According to Sung Kim, the KUHP, which criminalizes individual private decisions, will influence company decisions, potentially resulting in a decrease in foreign investment, tourism, and travel to Indonesia.

"Around the world, if laws are unclear, businesses often hesitate to invest because they are unsure how different laws might affect their business operations," he added.

US Among Largest Investor Countries

According to a report from the Investment Coordinating Board (BKPM), the US is one of the largest sources of Foreign Direct Investment (FDI) in the third quarter of 2022.

In the third quarter of 2022, the highest FDI came from Singapore, at US$3.82 billion. This was followed by China at US$1.56 billion, Japan at US$1.02 billion, and Hong Kong at US$1.02 billion.

Next were Malaysia with US$900.92 million in realized FDI, South Korea with US$768.95 million, and the United States (US) with US$720.56 million. This was followed by the Netherlands with US$432.42 million, Bermuda with US$398.37 million, and Australia with US$185.66 million.

Overall, realized FDI in the third quarter of 2022 reached Rp168.9 trillion. This contributed 54.9% to the total realized investment in Indonesia during that period, which amounted to Rp307.8 trillion.