Province

Jakarta

DKI Jakarta

Officially named the Special Capital Region of Jakarta, Indonesia’s largest metropolis serves as the economic, cultural, and political hub of the country as well as the nation’s capital city. With a total area of 662,33 square kilometers, Jakarta is divided into five administrative regions: Central Jakarta, North Jakarta, West Jakarta, South Jakarta, East Jakarta, and the administrative regency of Thousand Islands. The province also has a metropolitan area that includes the satellite cities of Bogor, Depok, Tangerang, Bekasi, Puncak, and Cianjur (Jabodetabekpunjur).

Despite being the capital, Jakarta is undergoing legislative changes through the Jakarta Special Region (DKJ) bill, aligning with the Nusantara Capital City (IKN) Law for relocating the capital to Nusantara, East Kalimantan. Through this bill, Jakarta aims to be redefined as a global business and economic hub, akin to New York or Melbourne, while expanding its metropolitan area to include Cianjur regency in West Java and the South Tangerang municipality in Banten.

As of 2022, Jakarta’s population stands at 10.6 million people, making it the province with the highest population density in Indonesia, with 16,158 people per square kilometer. It is home to various ethnic groups, predominantly Javanese, alongside Betawi, Sundanese, Batak, Minang, and Malay. In terms of religion, the majority of Jakarta’s population are Muslims, totaling 9.4 million people, followed by Christians with 437,967 people, Hindus with 20,262 people, Buddhists with 393,919 people, Konghuchu with 1,739 people, and adherents of indigenous beliefs 417 people.

On its way to becoming a Smart City 4.0, the Jakarta Provincial Government established Jakarta Smart City (JSC). Operating under the authority of the Jakarta Provincial Government and the Jakarta Provincial Communication, Informatics, and Statistics Office (Diskominfotik), JSC aims to optimize technology in government affairs and public services for the benefit of all Jakarta residents.

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Jakarta’s Economy

As the largest metropolis in Southeast Asia, the DKI Jakarta Central Statistics Agency (BPS) recorded Jakarta’s Gross Regional Domestic Product (GRDP) at constant prices in 2023 reaching Rp 2.050 trillion, indicating an economic growth of 4.96 percent from 2022. Based on this GRDP, the top three leading sectors that drive Jakarta’s economic growth are wholesale and retail trade, which reached Rp 321 trillion in GRDP, followed by information and communications at Rp 281 trillion, and the manufacturing industry at Rp 232 trillion.

Moreover, from an expenditure standpoint, Jakarta’s largest proportion came from the exports of goods and services at 66.29 percent, followed by household consumption (HCE) at 62.15 percent, and gross fixed capital formation (GFCF) at 34.24 percent.

In addition, data from the Investment Coordinating Board (BKPM) shows that the cumulative realization of foreign and direct investment in Jakarta until 2022 reaches Rp 53.8 trillion, constituting about 8.2 percent of the total national realization. This makes Jakarta the reigning top investment destination province in Indonesia, with popular sectors encompassing construction, tourism, technology and information, and trade. As for domestic investment, the construction sector dominated in 2022 with a value of Rp 28.8 trillion, while the realization of foreign investments was dominated by the transportation, warehouse, and telecommunications sector, reaching Rp 20 trillion.

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Latest News

April 25, 2025

The Indonesian stock market experienced a modest but meaningful recovery this week, buoyed by an announcement from United States President Donald Trump that the implementation of his import tariffs would be delayed for the next 90 days for most countries, excluding China, Mexico and Canada. This pause offered global markets a reprieve from an escalation in trade tensions, and Indonesia was no exception.

Just before Trump’s announcement on April 9, the Jakarta Composite Index (JCI) dropped to a low of 5,967. As news of the tariff pause broke and market sentiment began to shift, the JCI had rebounded by the following Monday (April 14) to 6,445 up 8 percent. Improved investor outlook was also reflected in trading volumes that surged to 15 billion shares on April 21, up from 11.8 billion recorded on April 11 and 12.2 billion at the end of March.

This upward trend in market confidence is largely attributed to growing optimism that Washington might recalibrate its tariff policy during the 90-day pause. The US is currently facing significant economic strain, not just in its financial markets but also in the real economy. Trump's tariff policy, which aims to revitalize domestic industries and bring jobs back to the country, has run into practical roadblocks. While its objective is to redirect US capital away from foreign investments and back into domestic production, the reality is that many sectors of the US industrial base are ill-equipped to absorb this influx of capital efficiently, potentially leading to significant waste.

Building the US’ industrial capacity is not something that can be accomplished overnight. Recognizing this, many analysts believe that Trump's current approach of exempting select countries while maintaining pressure on key competitor China and major trade partners like Canada is a compromise strategy, allowing the US to maintain some continuity in international trade as it attempts to reconfigure the economic architecture. Unless there is a sudden shift in the condition of the US economy, this blanket tariff policy is widely expected to undergo some revision in the months ahead.

From Indonesia’s standpoint, the current situation presents a valuable opening. As the US has become increasingly entangled in trade spats, particularly with China and the European Union, its export options have narrowed. Retaliatory tariffs from these major trading partners have restricted US access to some of its largest markets and opened a window for countries like Indonesia to fill the gap.

In response, the government is preparing a strategic proposal to increase its imports of US energy commodities, particularly crude oil and liquefied petroleum gas (LPG). According to Energy and Mineral Resources Minister Bahlil Lahadalia, Indonesia is looking to import up to US$10 billion worth of these commodities, or roughly Rp 168 trillion. According to the ESDM's estimates, they expect to increase the portion of US crude oil from 4 percent of total crude oil imports to 40 percent.

The government is currently evaluating the logistical and financial implications of such a significant change. As a basis for comparison, Indonesia's imports from the US throughout 2024 were only $430.87 million for crude oil and $3.79 billion for LPG. Currently, the US supplies around 54 percent of Indonesia's LPG imports, so the new import increase policy would be primarily for crude oil.

Bahlil noted that US crude oil prices were comparable with those in the Middle East. Nevertheless, Jakarta sees this energy import initiative as a bargaining chip in broader trade discussions. Given that the US exports large volumes of crude oil to the Netherlands and LPG to China, there is reason to believe that surplus inventory would allow Indonesia to negotiate more favorable prices.

Whether or not this new policy will come to pass is still up in the air, especially as China has recently begun lobbying against Indonesia's plans for concessive trade negotiations with the US. On April 21, Chinese officials met with representatives of the Defense Ministry and Foreign Ministry to discuss a possible coalition against the US' tariffs.

Chinese Foreign Minister Wang Yi said the US' tariffs are an unprovoked aggression that disrupted the flow of international trade. There is little guarantee that attempts to placate the US would prevent similar abuses in the future, which is why other countries need to come together instead to stand against the US' policies.

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