Province

South Sumatra

Overview Economy

South Sumatra, the province divided by Musi river

Sumatra Island’s eastern coast is home to South Sumatra, a province of 8.89 million people as of 2023. The province’s capital city is Palembang, a city that serves as a blend of modernity and tradition, thereby contributing to South Sumatra’s presence as a cultural melting pot where traditions and customs rooted in Java, Palembang, and Malay culture exert a significant influence. Additionally, the province’s local cuisine reflects this diversity, featuring spicy and savory meals as staples.

Furthermore, a highlight of South Sumatra's cultural legacy is the annual Sriwijaya Festival, which honors the historical Sriwijaya Kingdom that once flourished in the area. The festival showcases the province’s rich cultural diversity through traditional performances, art exhibitions, and gastronomic events.

With a varied terrain that includes mountains, forests, and plains, South Sumatra’s natural landscape notably is cut by numerous rivers, among them the Musi River, which plays an essential role in the region’s agricultural and transportation networks. Particularly, the Ampera Bridge spans the Musi River, further contributing to the region’s connectivity and infrastructure.

Moreover, South Sumatra’s vast landscape supports a wide variety of plants and animals. These include the critically endangered Sumatran tiger and rhinoceros, housed in the UNESCO World Heritage site of Bukit Barisan Selatan National along with a variety of other animals.

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Economic landscape

South Sumatra’s economy, as of 2023, is reflected in a Gross Regional Domestic Product (GRDP) of Rp 360 trillion. Driving this GRDP are several sectors, with the mining sector leading with a contribution of 26.61 percent, followed by the processing industry sector, and the agriculture, forestry, and fishery sector.

Moreover, the province contributes significantly to the country's palm oil industry due to its vast plantations. Additionally, natural resources such as coal and rubber contribute significantly to both the national and local economies.

In 2023, South Sumatra province attracted Rp 36.80 trillion in investment up to the third quarter of the year. During this period, both domestic and foreign investments were nearly identical, with Rp 18.67 trillion and Rp 18.12 trillion, respectively. Among international sources of investment, Singaporean businesses led the way with Rp 12.19 trillion, followed by China at Rp 2.63 trillion, Hongkong at Rp 1.67 trillion, Japan at Rp 665 billion, and Malaysia at Rp 319 billion.

Five major sectors enjoyed investment in South Sumatra during that period, namely the paper and printing industry with Rp 10.81 trillion in investments, the mining industry at Rp 5.61 trillion, the energy industry at Rp 4.67 trillion, the food industry at Rp 3.43 trillion, and the transportation, warehousing, and telecommunication industry at Rp 3.04 trillion.

To sustain the flow of investment into the province, South Sumatra is supported by the Trans-Sumatra Highway, connecting the province to Lampung. Notably, the Palembang-Lampung route reduces travel time from 10-12 hours to only 3.5 hours. Significant investments have been made in this highway, including the Indralaya-Pramubulih route, which received an investment of Rp 12.5 trillion.

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Latest News

August 26, 2024

The Palembang City Government is once again holding the Traditional Bidar Boat Festival for biduk layar (bidar) or local  riverboats. The annual event is scheduled to take place from Aug. 29 to 31, 2024, on the Musi River.

"Palembang's PAD (locally-generated income) target from the bidar [festival] is 35 percent [of total PAD], up from last year's 30 percent [of total PAD]," Palembang Tourism Office (Dispar) Head Sulaiman Amin stated on Monday, Aug. 19, 2024.

The bidar festival was opened with a culinary exhibition for micro, small and medium enterprises (MSMEs) as part of the Palembang Expo, with the main event being a bidar competition on the Musi River that will take place on Aug. 31, 2024.

"While there are already seven participants [for the bidar competition], the hope is [for the racers] to reach 10 to 15 [participants] if possible," he said.

In addition to racers from Palembang, the bidar boat race on the Musi River will also be enlivened by participants from outside the city, including from the Ogan Komering Ilir (OKI) and Penukal Abab Lematang Ilir (PALI) regencies. There are currently three groups of bidar race participants from Palembang.

"Then OKI and PALI sent two contingents each. River sailboats representing Palembang include the Dispar's decorated boats," Sulaiman added.

He also informed that the Palembang City Government requires all visitors and participants to use the Quick Response Code Indonesian Standard (QRIS) cashless payment method during the Bidar Festival and Palembang Expo.

"It is mandatory to use QRIS because we are launching a Bank Indonesia program to find out the impact of tourist visits and money coming into Palembang on [the city's] economic growth through QRIS transactions," Sulaiman explained.

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