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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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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.

Latest News

June 9, 2026

The more than 50 overseas trips President Prabowo Subianto has taken during less than two years in office have increasingly drawn public skepticism. Critics question whether the frequency of these trips aligns with genuine diplomatic priorities and the administration's stated commitment to fiscal efficiency. Thus far, the government's defense has been less than satisfying.

On June 1, Cabinet Secretary Teddy Indra Wijaya addressed the mounting censure, saying in a video statement that any expenses exceeding official state budget allocations were personally covered by the President. Teddy also emphasized that strict cost-efficiency measures had been implemented, including cutting the size of the presidential entourage roughly in half compared to previous administrations.

However, his statement also included a pointed rebuttal aimed at Dino Patti Djalal, the founder of the Foreign Policy Community of Indonesia (FPCI) who previously served as deputy foreign minister and ambassador to the United States. Days earlier via Instagram on May 30, Dino questioned the frequency of Prabowo’s trips and suggested teleconferencing or delegating certain engagements to Foreign Minister Sugiono as viable alternatives.

This is merely the latest flash point in a broader debate over presidential trips that has been simmering for months. Earlier this year, public scrutiny focused on Prabowo’s alleged use of multiple state aircraft for foreign trips. This prompted Teddy to clarify on Feb. 3 that reports of the President utilizing two state planes at the same time were inaccurate, against insisting that the size of his entourage had been significantly reduced.

While international diplomacy is an essential tool of statecraft, public apprehension is not necessarily directed at the idea of foreign trips but rather at their scale, timing and measurable outcomes. Three core issues drive these concerns.

First, the sheer frequency of the President’s overseas trips stands out against historical precedents. Dino estimated that Prabowo had spent roughly one out of every six days abroad since assuming office in October 2024. In actual numbers, the President has made more than 50 overseas trips, including seven in late 2024, beginning with a state visit to Beijing to meet President Xi Jinping, 34 in 2025 and around eight in the first half of this year, the most recent a trip to Paris from May 26 to 29.

A politician from Prabowo’s Gerindra Party even said the President had planned to extend the most recent journey to Austria and Hungary, but the President’s office has denied this. Nevertheless, the relentless pace of his overseas trips invites a question about return on investment.

Second, these extensive itineraries for the purposes of diplomacy clash with the government-wide mandate for fiscal prudence and discipline. Prabowo has repeatedly instructed his cabinet as well as state agencies to boost efficiency and curb spending, including on official trips. Meanwhile, the government keeps its budget for presidential trips hidden, though independent estimates place the cost per trip at between Rp 3 billion (US$166,000) and Rp 15 billion, depending on distance and duration.

Against this backdrop, the President’s frequent overseas trips risk creating a severe perception gap, particularly when their objectives remain opaque. France is a case in point. Prabowo has visited the country four times less than two years into his presidency, prompting observers to question whether they entailed any concrete outcomes. Mohamad Guntur Romli of the Indonesian Democratic Party of Struggle (PDI-P) criticized the government's characterization of the latest Paris trip as a triumph, noting it received scant coverage in major French media.

The issue of optics was exacerbated by viral social media chatter surrounding Teddy's birthday celebration at a luxury Paris hotel during the penultimate visit in mid-April. Regardless of who footed the bill, that image reinforced public perceptions of an elite detached from prevailing anxieties over belt-tightening and the swelling budget deficit.

Third, transparency remains a critical blind spot. Statecraft is not merely about announcing itineraries, signing symbolic memorandums of understanding or posing for photo ops. It requires ensuring that citizens understand the tangible benefits of international engagements, including clear accounting of expenditures.

Several political analysts and officials have echoed this demand. The PDI-P’s Andreas Hugo Pareira argued that the administration must provide clearer benchmarks and targets for the President’s foreign trips. Misbah Hasan, secretary-general of the Indonesian Forum for Budget Transparency (FITRA), has similarly called for rigid oversight, including potential auditing by the Supreme Audit Agency (BPK) and the Corruption Eradication Commission (KPK), to restore and maintain public trust.

Finally, the debate is not about anchoring the President in Jakarta. The real issue at hand is whether the government can convincingly prove to the people that the scale and frequency of these trips are proportionate to their rewards. The success of diplomatic engagement must be measured not by the mileage accumulated but by the transparency, strategic value and tangible dividends delivered to the public, especially in a time of crisis like today.

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