Sector
Finance
Indonesia’s financial sector has been flourishing over the past half decade. The COVID-19 pandemic period, while being a time of austerity for most sectors, led to revolutionary innovations in Indonesia’s financial services industry, particularly in fintech. From December 2020 to December 2022, total assets of the fintech sector grew by 48.54 percent from 2020 to 2022. This growing trend continued even after the pandemic lockdowns ended, as total assets in fintech grew by 30.8 percent from December 2022 to December 2023.
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Finance
Indonesia’s financial sector has been flourishing over the past half decade. The COVID-19 pandemic period, while being a time of austerity for most sectors, led to revolutionary innovations in Indonesia’s financial services industry, particularly in fintech. From December 2020 to December 2022, total assets of the fintech sector grew by 48.54 percent from 2020 to 2022. This growing trend continued even after the pandemic lockdowns ended, as total assets in fintech grew by 30.8 percent from December 2022 to December 2023.
With fintech paving the way forward, traditional banking followed suit by revolutionizing its services. From 2022 to 2023, the banking industry’s fund distribution increased by 6.28 percent, source of funds increased by 6.33 percent, and total assets in the industry grew by 6.98 percent, reaching a total of US$8.22 trillion. Moreover, even regional banks have been benefitting from this wave of innovation. For the same period from 2022 to 2023, the regional banking sector saw a 7.67 percent in distributed funds, an 8.08 percent increase in source of funds, and a 7.52 percent increase in total assets, reaching a total of US$137.96 billion.
Innovations in Indonesia’s finance sector extend beyond financial services. On September 2023, the Indonesian monetary authority, Bank Indonesia (BI), introduced three pro-market monetary instruments that function as short-term fixed income securities with high coupon rates. The three instruments, SRBI, SUVBI, and SUVBI, were able to collect Rp 409 trillion (US$25.2 billion), US$2.31 billion, and US$387 million, respectively.
Particularly in the case of the SRBI, this instrument represented an innovative way to attract capital flow from abroad during a period of high credit costs and slow investment. Approximately 20.77 percent, or Rp 85.02 trillion (US$ 5.26 billion), of the total outstanding SRBI were owned by non-Indonesian residents, underscoring the SRBI’s success as a monetary instrument.
Even when compared to other countries in the same region, the Indonesian finance sector stands out for its stability against fluctuations. Throughout 2023, the global cost of credit was high due to hawkish Fed policies made to curb US inflation, resulting in a stagnation of capital flow on a global scale. Entering the second quarter of 2024, the composite index of many Southeast Asian countries such as Singapore and Thailand recorded price decreases compared to the same period last year, reaching -3.96 percent and -13.9 percent on the Straits Times Index (STI) and the Bangkok SET index, respectively. Meanwhile, the Jakarta Stock Exchange Composite Index (JKSE) recorded a price increase of 5.18 percent for the same one-year period.
In summary, the Indonesian financial sector stands out for its stability and consistency, maintaining growth through innovation even during periods of austerity or global uncertainty. This consistency is also reflected in its GDP, which grew by 7.4 percent from 2022 to 2023, contributing roughly 4.16 percent to the national GDP in 2023.
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Former president Joko "Jokowi" Widodo is struggling to maintain his political clout in Indonesia. The prolonged controversy surrounding his academic certificate has eroded his credibility, while his clan, once expected to carry on his political legacy, has sought every path to establish meaningful influence. Instead, many of Jokowi's close allies have become entangled in legal troubles, and his sway within President Prabowo Subianto's administration is steadily fading.
The Jakarta Police recently scheduled questioning for three suspects, Roy Suryo, Rismon Hasiholan Sianipar and Tifauziah Tyassuma, in the defamation case related to allegations of Jokowi's forged diploma. In total, eight individuals have been charged under accusations of defamation, incitement and slander.
Mahfud MD, Jokowi's former Coordinating Political, Legal and Security Affairs Minister, stated that the court should not convict Roy and company before first determining the authenticity of Jokowi's diploma.
Meanwhile, Jokowi's eldest son, Vice President Gibran Rakabuming Raka, once seen as his political heir, has seen his role diminish. His influence within the cabinet has been explicitly curtailed by President Prabowo, who prefers instead to rely on figures from his Great Indonesia Movement (Gerindra) Party and the Indonesian Military (TNI).
Similarly, the Indonesian Solidarity Party (PSI), led by Jokowi's youngest son, Kaesang Pangarep, has yet to clarify Jokowi's formal role despite rumors that he would chair its advisory board. The relationship between PSI and Jokowi has shown little sign of mutual benefit, particularly since the party holds no seats in the House of Representatives.
Jokowi's son-in-law, North Sumatra Governor Bobby Nasution, also faces legal troubles. He has been linked to a corruption case involving his close ally, Topan Obaja Putra Ginting, the head of the province's Public Works and Housing Agency.
The case drew further attention after the house of Judge Khamozaro Waruwu, who presides over the corruption trial, caught fire on Nov. 4, destroying crucial documents and valuables.
From the debris, Tempo reportedly found remnants resembling court documents and a business card belonging to a retired official from the Public Works Ministry and an expert witness at the National Public Procurement Agency (LKPP), identified by the initials RH.
Topan was arrested by the Corruption Eradication Commission (KPK) in Medan on June 28 for allegedly receiving a promised fee of Rp 8 billion (US$478,271) from a private contractor that won a Rp 231.8 billion road construction project in North Sumatra.
The KPK is awaiting the outcome of the Medan Corruption Court's trial before summoning Bobby for questioning. Prosecutors will submit their report to the KPK once the verdicts against the five defendants in the case become legally binding.
This is not the only legal issue shadowing Bobby. He was previously implicated in an alleged nickel smuggling scheme to China involving 5.3 million tonnes of ore, which reportedly caused state losses amounting to hundreds of trillions of rupiah. Coordinating Economic Minister Airlangga Hartarto was also named in the same case.
In 2024, Bobby's name surfaced in connection with a bribery and gratuity case connected to former North Maluku governor Abdul Gani Kasuba, who died in March of this year.
Jokowi's weakening influence extends beyond his family. ProJo, the volunteer organization that once stood as his strongest political support base, is now at a crossroads.
After speculation that it might evolve into a political party, ProJo chairman Budi Arie Setiadi, who served as Cooperative Minister in the Prabowo government for less than 11 months, has seen his political standing wane. His attempt to join Gerindra was rejected by several regional party branches, including the Surakarta chapter, a key base of Jokowi's support.
They argued that Budi Arie was merely seeking political protection from an online gambling scandal during his tenure at the Communication and Informatics Ministry in the final year of Jokowi's presidency.
Local Gerindra representatives also objected, fearing his entry could disrupt the party's established structure. Some political observers claim that Budi Arie's move was orchestrated by Jokowi himself.
Following Budi Arie's dismissal in September, several figures closely associated with Jokowi's administration were gradually dropped from Prabowo's government lineup, including Sri Mulyani, Dito Ariotedjo and Budi Gunawan.
Luhut Binsar Pandjaitan, once Jokowi's most trusted aide with extensive authority, has been relegated to a largely ceremonial role at the powerless National Economic Council.
The remnants of Jokowi's influence now lie mainly in the police and military leadership, whose terms will extend until their eventual retirement.
Meanwhile, many of Jokowi's flagship initiatives that were expected to be continued under President Prabowo have either been scaled back or left uncertain. The Nusantara Capital City project has seen significant budget cuts and unclear timelines, while the Jakarta–Bandung high-speed rail project faces potential legal issues and is increasingly viewed as a financial burden on the state.
A year after stepping down, Jokowi finds it difficult to remain relevant as his political legacies are being dismantled by legal issues or political competition.
