The Future of Principles of Sustainability Economy in Indonesia

The Future of Principles of Sustainability Economy in Indonesia

  • InCorp Editorial Team
  • 5 January 2023
  • 4 minute reading time

Alarms have been sounded for the last decade by international organizations. Many organizations are promoting narratives on the importance and urgency of making global progress, especially on the principles of sustainability. 

Why is Sustainability The Future?

The threat of neglecting sustainability otherwise would be faced by the generations to come and even those already born. In 2015, the United Nations adopted the 2030 Agenda for Sustainable Development, which contains 17 Sustainable Development Goals (SDG). 

The SDG covers a range of issues that include but are not limited to addressing world poverty and hunger, ensuring clean energy supplies, and mitigating climate change. 

Sustainability is the future. It is the key to battling the struggle with significant challenges. Without it,  ozone depletion, extinction, chemical pollution, modification to land systems, nitrate and phosphate flow to the oceans, and other similar factors will bring irreversible changes to the environment. 

Indonesia’s Plan for Sustainability Economy

Indonesia will reportedly construct a green industrial area in North Kalimantan. The largest green industrial region in the world, it will use green energy in the power industry. 

The hydropower required to operate the green industrial park is generated by PT Kayan Hydro Energy using the flow of the Kayan River, which flows through the province.

This initiative is to help Indonesia use more new renewable energy sources instead of fossil fuels. These are only a handful of the numerous initiatives made by the Indonesian government to create a green economy. The initiatives include a focus on green energy development and green investment. 

Read more: Indonesia’s Rapid Development for the Green Energy Transition

A simple licensing process and financial incentives from the Indonesian government are just the beginning of the advantages that investors who are prepared to participate in this area will experience.

Steps taken to create a more sustainable future are integral and must be completed without delay. InCorp Indonesia (formerly Cekindo) provides business licensing and company registration services that will ease your company’s processes and enable you to focus your resources on creating a more sustainable procurement. 

The Challenges of Economic Sustainability

The Future of Principles of Sustainability Economy in Indonesia

Economies primarily motivated by financial incentives are not ever viable, despite economists’ assertions to the contrary. Nothing that is done only for the good of society or, most definitely, for the good of future generations has any economic incentive to be done. 

Investments are required to safeguard, replenish, and regenerate the natural and human resources vital to economic sustainability. It will only accomplish if all investment decisions are made contingent on gaining something of value in return. 

Only by people expressing their social and ethical ideals through their individual and group decisions and behaviors will nature and society’s ecological health and productivity be maintained. 

Understanding Principles of The Sustainability for The Economy

Scarcity is a fundamental concept in understanding the overall challenge of our economy. In essence, the underlying principle of scarcity allows us to realize that there is not enough for everyone to have it all.

As human beings, Our needs are limitless and know no bounds. Our desires to have more, do more, and learn more cannot be met with the existing scarce resources. Nevertheless, there is a balancing act to ensure that scarce resources are best used.

To further enhance this understanding, we dive into the various principles of economic sustainability. The core element of sustainable economic development is sovereignty, or “freedom to choose.” 

The Freedom To Choose Sustainable Economy

Consumers must have precise information to determine the items’ true worth before purchasing them to prevent regretting their decisions. Individuals must be allowed to make their own economic decisions. 

The freedom to choose will lead to understanding the economy’s ideas of efficiency and scarcity. Without outside influence or compulsion, people must be free to choose or discover what they need and desire. 

Economic sustainability requires financial autonomy. Additionally, many people have given up their economic independence by borrowing excessively. The habit resulted in reducing their future economic chances. 

The efficiency principle is also crucial as the key to the sustainability of the economy. Efficiency in terms of economic value and cost is referred to as economic value and increases with increasing importance to costs.

Alternative applications for the natural and human resources utilized to create goods with economic worth are frequent. Economic efficiency is using natural and human resources to their highest or best economic use, for example, their highest economic value compared to their highest economic costs.

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

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Frequent Asked Questions

As their names suggest, the main differences between the three business kinds in Indonesia lie in the businesses and the purpose of their incorporation. Local company owners (PT) must be Indonesian citizens, as even 1 percent of foreign ownership is not allowed. This type of company is not limited to entering any business field, and restrictions on incorporation are not so tight. On the contrary, a foreign-owned company (PT PMA) is open to international investors, but the maximal percentage of foreign shares differs in various business sectors. Contact InCorp to get the most updated information on the Negative Investment List. International investors tend to open representative offices as a first step to understanding the Indonesian market before setting up a limited liability company. This type is used for marketing and promotion activities and needs the right to sell directly and receive income.

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.

Yes, this mainly applies to import and export businesses. Instead of establishing a company, you can use an under-name import service, an importer of record.

It should take between 30 to 45 days.