Changes in Ease of Investment in Indonesia Based on Amartya Sen's Theory of Justice

Abstract

Indonesia has undertaken significant regulatory reforms to enhance the ease of doing business, marked by the enactment of the Job Creation Law and Presidential Regulation No. 10 of 2021 concerning Investment Business Fields, aiming to attract investment and spur economic growth. This study examines the impact of these reforms on the capabilities and freedoms of various stakeholders, including investors, Micro, Small, and Medium Enterprises (MSMEs), and local communities, through the capabilities approach of Amartya Sen's Theory of Justice. By analyzing the interplay between investment facilitation policies, stakeholder participation, and access to resources and economic opportunities, this research assesses the extent to which these reforms have fostered a fair and inclusive investment environment. The study employs a normative-empirical approach, integrating conceptual analysis with empirical data on investment trends, ease of doing business indicators, and social welfare indicators. Findings indicate that while the reforms have improved the overall investment climate, challenges persist in ensuring the equitable distribution of benefits and opportunities, particularly for vulnerable groups such as MSMEs and local communities. This underscores the need for policies that not only promote investment but also empower all stakeholders to participate in and benefit from economic development.