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.

Show more

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.

Show more

Latest News

February 12, 2026

The Investment and Downstream Industry Ministry/Investment Coordinating Board (BKPM) is still reviewing the plan to transfer management of the Martabe gold mine in North Sumatra Province, currently managed by PT Agincourt Resources, to the Daya Anagata Nusantara (Danantara) Investment Management Agency.

"In response to several media inquiries received by the Investment and Downstreaming Ministry/BKPM, we have implemented steps including, but not limited to, reviewing legal aspects, production techniques, ongoing business aspects, and future strategies for PT Agincourt Resources," said Investment and Downstream Industry Ministry/BKPM Head Rosan Roeslani Feb. 9, 2026.

Rosan, who is also CEO of Danantara, stated that the process was carried out carefully by considering various aspects to avoid disrupting the national investment climate. To obtain a complete and balanced understanding, his ministry has met and communicated directly with the management of PT Agincourt Resources. This step was taken as part of a clarification process and constructive dialogue regarding the management of the Martabe gold mine. Furthermore, the results of the interim study and cross-agency coordination have been reported directly to President Prabowo Subianto.

Rosan stated that the report was conducted as a form of accountability and information dissemination within the framework of comprehensive government policymaking. The Investment and Downstream Industry Ministry/BKPM has also received and reviewed a letter of clarification from PT Agincourt Resources. The letter contains explanations regarding hydrological aspects, the operational environment, and land use compliance.

"Concurrently, the government continues to coordinate with the Forest Area Enforcement Task Force (Satgas PKH) and relevant ministries and institutions to ensure that the entire process is carried out in accordance with applicable regulations," said Rosan.

He said that every policy will be implemented transparently and legally, while maintaining investment certainty. Legal certainty, Rosan added, is the main foundation for building trust and long-term partnerships between the government and domestic and foreign investors.

Previously, President Prabowo Subianto announced the termination of several permits in the plantation and mining sectors, including those managed by PT Agincourt Resources. The plan to change the management of the Martabe gold mine was revealed by Danantara COO Dony Oskaria, who is also the State-Owned Enterprise Regulatory Agency (BP BUMN) Head.

The gold mine is planned to be operated by PT Perminas, a state-owned enteprrise (SOE) established in November 2025 with Rp 44 billion of authorized capital and Rp 11 billion of initial paid-up capital. The majority of its shares are owned by PT Danantara Asset Management, Danantara's operating arm, while the government holds one series A share.

State Secretary Prasetyo Hadi stated that the decision to transfer the company's management to an SOE under Danantara took into account broader economic interests, particularly business sustainability and job creation. He said that several ongoing economic activities are still necessary for the benefit of the nation and state.

"But we must also assess whether or not these economic activities are indeed necessary for the benefit of the nation and state, [and] for the purpose of opening or creating jobs." Prasetyo elaborated.

Read more
December 2, 2025
November 12, 2025
October 8, 2025
August 25, 2025
July 14, 2025
June 20, 2025
May 22, 2025
April 30, 2025
Load more