Jakarta, Aug. 28 -- Deputy Minister of Investment and Downstream Development, Todotua Pasaribu, identified racketeering as a major obstacle to Indonesia's investment climate, citing its impact on production costs and pricing competitiveness.

"Racketeering adds 5-30 percent to variable costs. It's not just perpetrated by community groups, but also by bureaucrats and state officials," Todotua said during a discussion titled "Will 2025 Investment Realization Achieve the Target?" in Jakarta on Wednesday.

Despite government incentives such as tax holidays, allowances, and deductions, he emphasized that cross-sector collaboration is essential to eliminate such practices and improve Indonesia's appeal to investors.

"If these costs persist, we...