“Local governments must revitalize the private sector so it can contribute to driving the local economy. Therefore, I have instructed governors, district heads, and mayors to work with regional chambers in line with each area’s potential,” he said.
Karnavian delivered the directive in his speech during the 2025 National Coordination Meeting on Regional Regulations in Kendari, Southeast Sulawesi, on Wednesday, according to a statement cited here on Thursday.
The minister encouraged regional governments to facilitate local business growth, which in turn would help increase locally generated revenue (PAD) from taxes and retributions.
"That is a win-win solution, where private actors reap profits and PAD increases without burdening the people," he asserted.
However, he reminded local governments to exercise prudence in formulating and implementing social, economic, and cultural policies, emphasizing the importance of securing legitimacy from constituents.
"You should implement policies strictly if they have the people’s approval. Otherwise, do not insist," Karnavian told local officials.
He also stressed that the formulation of local policies and regulations should take into account their impact on both the public and the investment climate.
"It is important to disseminate adequate information on bureaucratic products and ensure they do not pose economic challenges to the people or discourage the business sector. Such products should serve as tools to improve the investment climate," he said.
Furthermore, he encouraged regional governments to identify and harness the creative economy potential of their regions by forming dedicated offices or services.
"If you have sufficient fiscal space and enormous creative economic potential, you can establish a standalone office. But in case of limited budgets, you can simply form it as an expansion of an existing office," he stated.
Related news: Indonesia urges regions to establish creative economy offices
Translator: Fianda S, Tegar Nurfitra
Editor: Primayanti
Copyright © ANTARA 2025
