Province

North Sumatra

Overview Economy

North Sumatra, a large salad bowl of people

North Sumatra, whose capital is Medan, ranks as the fourth most populous province in Indonesia, following West Java, East Java, and Central Java, with up to 15.1 million residents as of 2022. Rather than being a melting pot, the province is best described as a large bowl of salad, comprised of diverse ethnicities, cultures, and religions.

Ethnically diverse, North Sumatra is home to several indigenous groups. The Malay people reside along the east coast, while the Batak people inhabit the west coast and the central highlands region around Lake Toba. The Batak people are further categorized into six groups based on region, culture, and location: Pakpak, Angkola, and Mandailing on the west coast, and Toba, Simalungun, and Karo in the central highlands. Additionally, North Sumatra is home to the Nias people, who are natives of the Indian Ocean Island of Nias and its surrounding islets.

Residents of Chinese and South Asian descent together constitute a small but significant minority in North Sumatra, along with descendants of historical migrants from Java and migrants from other surrounding regions. These regions include the Minangkabau people of West Sumatra, the Palembang people of South Sumatra, and the Acehnese.

Furthermore, North Sumatra is home to a predominantly Muslim population, constituting over 60 percent of residents, followed by Christians (Protestant and Catholic) and Buddhists. Despite this great diversity, the province maintains generally harmonious inter-ethnic and inter-religious relations. However, at the same time, primordialism plays a role in both society and political life.

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North Sumatra’s economy, leading sectors

North Sumatra is one of the leading economies on the island of Sumatra, experiencing positive economic growth in recent years. For instance, in 2022, the province's economy expanded by 4.73 percent, a significant increase from 2.61 percent in 2021 and a notable recovery from -1.07 percent in 2020.

Several sectors are driving North Sumatra's economic growth: agriculture, trade, and construction.

As one of the country’s plantation centers, North Sumatra relies on key commodities such as palm oil, rubber, coffee, cocoa, and tobacco in its agriculture sector. Palm oil plantations owned by the people of North Sumatra are primarily concentrated in Asahan regency, accounting for over 15 percent of all palm oil plantations in the region, while coffee (robusta and arabica) is produced in the regencies of North Tapanuli, Simalungun, and Dairi.

Trade is also a key sector in North Sumatra’s economy, with the province exporting agricultural products like coffee, tea, and spices, as well as industrial products, specifically animal and vegetable fats and oils. As of 2022, the leading export commodity is vegetable fats and oils, reaching a significant export value of US$4.71 billion. Typically, these commodity exports from the province find their way to the Asian region, particularly China, as well as the United States. In terms of imports, North Sumatra's imports are predominantly raw/auxiliary materials, followed by capital goods and consumer goods.

Furthermore, North Sumatra's economy has increasingly relied on the non-trade sector, dominated by services, notably construction. North Sumatra’s Regional Gross Domestic Product (GRDP) in the construction sector has risen from Rp 64 trillion (US$4 billion) in 2018 to an estimated Rp 70 trillion (US$ 4.4 billion) in 2022. Moreover, the construction sector has become a major contributor to North Sumatra's employment industry.

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Latest News

June 20, 2025

Maniamolo Fest 2025 held in South Nias Regency, North Sumatra Province will feature the Fondrundrukhu Omo Tradition Festival as part of its series of events at 10.00-12.00 Western Indonesia Time (WIB) on Jun. 20, 2025. This event aims to revive local wisdom among the community, especially residents of Hilisimaetano Village and tourists in general.

"We have indeed presented this festival twice, namely in 2023-2024," said Hilisimaetano Village Head Formil Dachi on Jun. 17, 2025.

He added that the Fondrundrukhu Omo Tradition has been going on for a long time. Based on stories from the village elders, there has been a habit of the traditional clearing of houses annually every November.

“Even before I was born, there was a custom of cleaning the house in that way every year in November. However, around this time two years ago we made it into a festival so that it would be a pleasant sight,” said Formil.

Usually, before Christmas and New Year's, there is a custom in Hilisimaetano Village to clean each house together.

“Since we were little, the material of the houses in Hilisimaetano Village was mostly made of wood, and the wooden parts needs to be cleaned as it becomes mossy over time. Around the 1970s, before Christmas and New Year's, our parents told us to clean the house to welcome the arrival of many guests. We take lemongrass, reeds, coconut fiber to scrub the walls of the house made wooden boards are scrubbed until they are clean so they are beautiful to look at; and those sitting in the house feel comfortable and at home,” told Formil.

However, there is no special ritual in carrying out this tradition. As the Village Head, Formil said the Hilisimaetano Village Government only sought to revive the village's local wisdom to simultaneously become a traditional, cultural, and tourism billage. The village sought to apply local wisdom from the past to become something unique in the present, revive the creativity of the community, and revive the local economy by trying to attract tourists it.

"We also want today's youth to be able to understand that the situation in the past, [when we have to] use simple materials. The philosophy was for the community to work diligently, neatly, and cleanly. We will continue to strive to revive local wisdom so that these values ​​remain sustainable for the next generation," concluded Formil.

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