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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.
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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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Three weeks after the acid attack on Commission for the Disappeared and Victims of Violence (Kontras) activist Andrie Yunus, investigators have yet to clearly identify who bears ultimate responsibility. What has drawn particular attention is the resignation of the chief of the Strategic Intelligence Agency (BAIS), framed by the Indonesian Military (TNI) as a form of institutional accountability. Yet, this raises the critical question of whether the move reflects genuine responsibility-taking by the state or signals deeper power struggles within the military.
On the evening of March 12, Andrie Yunus, an activist with Kontras, was attacked with acid while riding home in Central Jakarta. Earlier that day, he recorded a podcast discussing the military’s role in politics. The timing has sharpened concerns about possible links between his advocacy work and the assault.
As of April 1, Andrie remained in the high-care unit at Cipto Mangunkusumo General Hospital (RSCM). He is undergoing intensive treatment, particularly for his eyes, as residual acid exposure has complicated medical assessments and may result in permanent damage. Kontras has described his condition as critical.
President Prabowo Subianto has condemned the attack and pledged that investigators will pursue not only the perpetrators on the ground but also the “highest actors” behind it. He emphasized the need to uncover “who ordered and paid for” the crime and has floated the possibility of establishing an independent fact-finding team.
However, this firm stance unfolds within a layered historical context. As widely documented, Prabowo himself faced allegations of human rights abuses during his military career. While he was never tried in court, he was dismissed from the TNI in 1998 for insubordination. This juxtaposition, between past controversies and present commitments to justice, adds a layer of political complexity to the case.
On March 25, TNI spokesperson Maj. Gen. Aulia Dwi Nasrullah announced that the chief of BAIS, Lt. Gen. Yudi Abrimantyo, no longer held that position. This followed the arrest of four officers, two from the Navy and two from the Air Force, who were assigned to BAIS and are allegedly involved in the attack.
Yet, the spokesperson did not clarify whether Yudi’s removal was linked to command responsibility, internal disciplinary measures or broader institutional considerations. The ambiguity surrounding his exit has fueled speculation about the true motives behind the move.
The TNI’s response warrants closer scrutiny. Rather than being seen as a definitive act of accountability, the dismissal of the BAIS chief has been interpreted by some observers as insufficient and potentially deflective. This concern emerges against the backdrop of the military’s expanding role in civilian domains and state-linked economic activities under the current administration. Such an expansion has renewed long-standing debates over military influence in non-defense sectors.
Nicky Fahrizal, a researcher at the Centre for Strategic and International Studies (CSIS), noted that the case appears rooted in internal TNI dynamics, raising concerns over possible abuses of authority. While investigations are ongoing, the involvement of intelligence-linked personnel has intensified scrutiny of internal control mechanisms.
Civil society organizations have warned that the leadership change risks functioning as a form of cuci tangan (washing of hands), a symbolic gesture that falls short of addressing responsibility at higher levels of command. Muhammad Isnur, chair of the Indonesian Legal Aid Foundation (YLBHI), argued that the resignation may obscure accountability at higher levels, including command responsibility extending to TNI leadership and even civilian authorities, particularly the defense minister. This critique shifts the focus from individual perpetrators to the broader chain of command.
At the apex of Indonesia’s military hierarchy are the TNI commander, Gen. Agus Subiyanto, and Defense Minister Sjafrie Sjamsoeddin. The commander holds ultimate operational authority, overseeing all branches of the armed forces and strategic institutions such as BAIS. Meanwhile, the defense minister is responsible for civilian oversight, including defense policy and institutional governance.
However, this formal structure is shaped by overlapping institutional backgrounds. Both Prabowo and Sjafrie are former senior military figures, creating a leadership environment closely intertwined with the TNI. This convergence produces a highly interconnected system in which military intelligence, command authority and political leadership meet at the top, making decisions such as the removal of the BAIS chief not merely administrative, but embedded within broader dynamics of power, loyalty and control.
