Eko B. Supriyanto, Editor-in-Chief of Infobank Media Group
BREAKING. In less than a month, deliberations on the Draft Law (RUU) on the Indonesian International Financial Center (PFII) have resulted in a decision: it has been enacted into law (UU). The enactment of this law fulfills the mandate of Article 248A of Law No. 4 of 2026 amending Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector (P2SK). The question is, will the PFII succeed, or will it end in failure—that is, become a stalled project? Finance
Finance Minister (Menkeu), Purbaya Yudhi Sadewa, stated that the establishment of the PFII is part of the government’s efforts to realize a stronger, more inclusive, sustainable, and globally competitive national economy, as mandated by the Asta Cita program. This also serves as a strategic step by the government to build a modern, competitive, and internationally standardized financial ecosystem to strengthen the competitiveness of the national economy amid the dynamics of the global economy.
Nevertheless, there are several points that need to be emphasized. No industry is more sensitive to trust than the financial industry. Banks sell trust. Capital markets sell trust. Insurance, private equity, family offices—all stand on a single, intangible foundation: the belief that today’s promises will be kept years down the road. Without that, all fiscal incentives are merely numbers on paper, and skyscrapers are nothing more than lonely monuments.
So, when Indonesia dreams of establishing the PFII, it is not actually talking about special economic zones, tax incentives, or a new architectural landscape. The country is staking what is most precious in a market-based civilization: the state’s credibility.
Indonesia needs the PFII, not merely because it wants to emulate Singapore or Dubai. Nor is it because it wants to follow the example of London, New York, and Hong Kong. From a political-economic perspective, this country has been a passive recipient of investment for far too long.
Indonesia needs a structural leap: from being merely a destination for capital flows to becoming a hub that manages, deepens, and trades that capital. The financial market of this country, which is about to celebrate its 81st anniversary, remains shallow.
However, as economists have pointed out, the success of an international financial center is never determined by how low its tax rates are. It is determined by four interlocking pillars: (1) legal certainty, (2) macroeconomic stability, (3) a comprehensive financial ecosystem, and (4) international reputation.
So, global investors are not reckless tax seekers. They are pension fund managers, sovereign wealth funds, and insurance companies that manage the money of millions of workers and the state. However, it’s a different story when local investors come disguised as foreign entities—especially those using laundered money, such as that found at the residence of Febrie Adriansyah, the former Head of the Special Crimes Prosecution Unit.
The risk of PFII’s failure isn’t just about stalled projects. It runs much deeper: Indonesia could lose the opportunity to become a financial hub for decades to come. Global investors—who possess a keen institutional memory—will take note that this country is incapable of managing world-class institutions. Major governance issues remain widespread.
Criticism of an approach that relies too heavily on tax incentives needs to be articulated clearly. Tax incentives are not the primary factor in investment. Major investors place greater emphasis on legal certainty, the quality of the bureaucracy, the availability of human resources, political stability, and the country’s reputation.
Ultimately, a great nation is not built through special economic zones. A great nation is built through trustworthy institutions. The PFII is not a test for Bali as the planned location, nor is it a test for financial regulators alone. The PFII is a test of whether Indonesia has a sufficiently mature rule of law to be trusted to manage global capital flows. Finance
After all, an international financial center is not built from concrete. It is built on credibility. And credibility is born only when a country is able to keep its promises: to the markets, to the law, and to its own people.
The dream of becoming a global financial center is not impossible. But it will not come true with just an opening ceremony. It will come true if every contract is honored, every court decision is fair, and the value of every rupiah is safeguarded.
That is where the true test of the PFII lies. As long as policies remain erratic and the quality of legislation is still rife with backroom deals, the PFII will remain nothing more than a fairy tale.
And what must be addressed first is building foreign investors’ confidence in Indonesia. After all, confidence is the most valuable currency in establishing the PFII. Therefore, do not go against the market!
Furthermore, who should oversee the PFII, whose key players are banks and the capital market? We must ensure the PFII does not end up like Danantara, where oversight is unclear. If this issue remains unresolved, it will be difficult for the PFII to succeed in the near future.
