Indonesia’s National Economic Council (DEN) is developing a plan to streamline regulations using AI, with the proposal set to be presented to President Prabowo Subianto.

The initiative, announced by DEN chair Luhut Binsar Pandjaitan, aims to use AI to reduce fraud in regulatory processes.

The AI-based deregulatory system will be integrated with the Online Single Submission (OSS) platform, which manages investment permits.

DEN is coordinating with the Ministry of Investment and Downstreaming, referencing Government Regulation No. 28/2025 on risk-based business licensing.

The government also plans to launch a GovTech pilot project using AI in Banyuwangi in September.

If successful, the pilot may expand to other government services as part of wider efforts to unify digital public services through technology.

🔗 Source: Detik.com

🧠 Food for thought

1️⃣ Indonesia’s renewed deregulation push builds on decades of economic liberalization experience

Indonesia’s current AI-based deregulation initiative reflects the country’s long history with economic reform, particularly the major liberalization efforts during the New Order era (1966-1998).

During that period, Indonesia implemented significant deregulation measures including the Foreign Investment Law (1967) and Domestic Investment Law (1968), which helped transform the economy and achieve double-digit GDP growth1.

The New Order’s export-led growth phase (1983-1996) saw extensive deregulation measures that increased economic competitiveness and diversified the economy away from oil dependence1.

However, this historical experience also revealed the importance of proper oversight, as the lack of regulatory safeguards contributed to vulnerabilities that became apparent during the 1997-1998 Asian Financial Crisis2.

Luhut’s emphasis on using AI to minimize fraud and misconduct appears to address these historical lessons, suggesting the government recognizes that effective deregulation requires robust monitoring systems.

2️⃣ The timing coincides with Indonesia’s broader struggle to establish comprehensive AI governance

This AI-based deregulation initiative comes as Indonesia is still developing its fundamental AI regulatory framework, creating potential coordination challenges.