Sector
Transportation
With a population exceeding 280 million people, Indonesia relies heavily on a robust transportation network encompassing sea, air, and land routes to connect its vast island chain and facilitate economic activity effectively. This reliance has made the transportation sector a leading sector in the country.
View moreTransportation
With a population exceeding 280 million people, Indonesia relies heavily on a robust transportation network encompassing sea, air, and land routes to connect its vast island chain and facilitate economic activity effectively. This reliance has made the transportation sector a leading sector in the country.
In 2022, the sector contributed Rp 983 trillion to the national gross domestic product (GDP) at current prices. Notably, regions where transportation is a leading sector include Aceh, West Sumatra, Bengkulu, Lampung, West Java, the Special Region of Yogyakarta, and Central Kalimantan. Additionally, North Kalimantan, Gorontalo, North Sulawesi, Maluku, East Nusa Tenggara, and Bangka-Belitung consider the transportation sector as a leading sector.
The sector has also experienced a significant boost in recent years, with the transportation and warehousing subsector achieving a staggering GDP growth of 15.93 percent year-on-year (YoY) in the first quarter of 2023.
During the COVID-19 pandemic, Indonesia’s auto industry was severely affected, leading to a decline in both vehicle sales and production. Despite this decline, the transportation sector as a whole continued to attract foreign direct investments (FDI). In 2023, foreign companies poured roughly US$2 billion into the country’s vehicle and other transportation subsectors, highlighting the continued potential that investors see in this sector.
In terms of land transportation, infrastructure projects supporting rail transport such as the Light Rail Transit (LRT), started operations in mid-August 2023. Additionally, the development of Phase 2 of the Mass Rapid Transit (MRT) Jakarta, which includes new routes, is currently underway, with 6 kilometers already completed out of a total of 13.3 kilometers. Moreover, railway transportation saw a year-on-year increase of 69.37 percent in the number of passengers nationwide.
Sea transportation is also an important subsector of the transportation industry, primarily due to the trade sector’s heavy dependence on this mode of transportation. It is highly favored for its perceived economic efficiency in transporting goods. Although sea transport may not be the main method of transportation for many individuals, the number of passengers using sea transport in 2023 increased by 13.30 percent compared to the previous year.
Furthermore, air travel in Indonesia continues to rise with the increase in economic activity. The number of passengers using domestic air transportation increased by 32.69 percent year-on-year. Additionally, Soekarno Hatta International Airport has surpassed Singapore’s Changi Airport to become Southeast Asia's busiest airport in April 2024. According to reports, the airport's flight seat capacity has also reached 3.34 million, the highest among airports in the Southeast Asia region.
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President Prabowo Subianto 's flagship free nutritious meal program has hit a critical juncture. Launched with the ambition of feeding millions and cementing his populist image, the program is now marred by reports of food poisoning, poor governance and slow budget absorption. In response, Prabowo has formed a high-level coordinating team to rescue the initiative before it collapses under its own weight.
The new team is designed to tighten oversight and restore public confidence after a string of incidents, including more than 8,000 reported food poisoning cases and allegations of mismanagement in the field. Without swift reform, the government risks missing its ambitious target of reaching 82.9 million beneficiaries next year, despite allocating a massive Rp 268 trillion (US$16.06 billion) in the 2026 budget.
The coordinating team is chaired by Coordinating Food Minister Zulkifli “Zulhas” Hasan and includes representatives from 17 ministries and agencies. Yet, the daily operations will be led by Nanik S. Deang, one of Prabowo's closest confidants, who serves as executive director. Nanik is also deputy chair of the National Nutrition Agency (BGN), the main implementing body for the free meals program.
A former journalist and longtime member of Prabowo's campaign team, Nanik has no formal background in nutrition or food security. Her rapid rise from serving as deputy head of the Poverty Eradication Agency and independent commissioner at Pertamina to her current position underscores how political loyalty continues to shape key appointments in Prabowo's administration.
Under the new structure, the coordinating team will oversee the synchronization, monitoring and evaluation of 7,477 nutrition food supply centers (SPPG) operating across 38 provinces and 509 regencies. These centers form the backbone of the program's food logistics system, linking local farmers and food suppliers to schools and communities.
Prabowo recently touted the program's progress, claiming the government had distributed 1.4 billion meal portions to 36.2 million recipients. He downplayed the food poisoning reports, noting that the incidents represented "only 0.00017 percent" of total distributions. Critics, however, quickly pushed back. Reducing a public health issue to fractions, they argued, trivializes what should be treated as a serious failure of oversight. Each sick child reflects a breakdown in quality control and accountability. The creation of the coordinating team may be an acknowledgment of those concerns.
The coordination team lacks representatives from the military and the National Police. This stands out given Prabowo's reliance on security institutions to execute many of his policies, including the free meals program. Many SPPGs are owned by military and police-linked entities, raising long-standing suspicions that the program has doubled as a tool for distributing political and financial rewards to different factions.
Governance shortcomings have been a recurring theme in the program's rollout. The free meals program currently lacks a solid regulatory foundation, making coordination between ministries and local governments uneven at best. Zulhas said one of the team's first tasks will be to draft a presidential decree to clearly define responsibilities and strengthen governance mechanisms. Critics have long warned that the program's top-down management style has alienated local governments that are essential to on-the-ground implementation.
The government appears to have taken that criticism to heart. The revised plan will involve local administrations more directly, alongside the newly established "Red and White" village cooperatives, an ambitious network that could reach up to 80,000 cooperatives nationwide. Greater decentralization of the program could improve both efficiency and accountability as the program scales up.
For now, though, the challenge remains enormous. Despite a Rp 71 trillion allocation for this year, the BGN managed to spend only about 30 percent of its budget by September. Poor coordination, weak local capacity and bureaucratic bottlenecks continue to hamper delivery, and all while public expectations soar.
Prabowo's free meal program was meant to embody his promise of a strong, caring state. But unless the new coordinating team can turn rhetoric into real reform, the initiative risks becoming yet a potentially case study of failure to deliver.
