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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Public demand for police reform necessitates the replacement of National Police chief Gen. Listyo Sigit Prabowo, who bears ultimate responsibility for the recent wave of bloody demonstrations. Otherwise, it would be yet another example of institutional failure, with the police under Listyo’s leadership remaining entangled in serious abuses of power, a lack of accountability and persistent public distrust.
Listyo previously served as the head of the Criminal Investigation Agency (Bareskrim) and was inaugurated by then-president Joko ‘’Jokowi’’ Widodo as the National Police chief on Jan. 27, 2021, becoming the longest-serving police chief in years.
During his tenure, the police force under Listyo has faced several high-profile cases that caused widespread public anger. These controversies included the recent wave of demonstrations, the Kanjuruhan Stadium tragedy in Malang, East Java, on Oct. 1, 2022, and an online gambling scandal allegedly backed by police officers. The latter also involved police general, Ferdy Sambo, who last served as head of the Professional and Security Division (Propam), notorious for his role in the murder of his aide-de-camp, Nofriansyah Yosua Hutabarat.
Despite these serious controversies, Listyo’s position has remained politically secure. He is viewed as instrumental in safeguarding the political status quo during last year’s presidential election. His lengthy tenure reflects Jokowi’s strategy to ensure the National Police remain under his influence even after leaving office in 2024, despite President Prabowo Subianto’s prerogative to replace Listyo at any time.
However, any decision by President Prabowo to remove Listyo would be perceived by the public as a move to distance himself from Jokowi’s camp, which played a significant role in securing his electoral victory. Prabowo would prefer to avoid such a step in the interest of maintaining political stability, even though Jokowi holds no direct control over a political party.
Deputy State Secretary Bambang Eko Suhariyanto emphasized the central role of the Police Reform Committee, a body the President was expected to announce soon after returning from his recent overseas trip, but which has yet to materialize despite his return.
This ad-hoc committee will consist of seven to nine members, one of whom is expected to be former coordinating political, legal and security affairs minister Mahfud MD. Although it has not yet been formally established, Bambang noted that coordination between the committee and the National Police’s internal reform team is already underway.
On the other hand, Listyo appears determined to hold onto his position as a way of “saving” the police institution in its current state of crisis. He appears to be attempting a restructuring of the police force by replacing the head of the Intelligence and Security Agency (Kabaintelkam) and the commander of the Mobile Brigade Corps (Brimob), two units widely regarded as responsible for the unrest and casualties during the recent demonstrations.
However, these changes were also necessary since the previous officials had reached retirement age. Beyond ensuring his full control over these two strategic units, the reshuffle is also seen by some as a power-consolidation maneuver by Listyo.
Furthermore, on Sept. 17 Listyo established the Police Reform Transformation Team, chaired by Police Education and Training Institute chief Comr. Gen. Chryshnanda Dwilaksana. The team consists of 52 officers, 47 senior officers and five mid-ranking officers.
Deputy House of Representatives Speaker Sufmi Dasco Ahmad said this internal police team was formed to prepare data required for the broader police reform agenda initiated by the President. He emphasized that there was no conflict between the two reform teams.
Nevertheless, skepticism has emerged. The chairman of the Indonesian Legal Aid Foundation (YLBHI), Muhamad Isnur, questioned the credibility of the current reform teams, whether formed by the police or by the President. According to him, the involvement of individuals closely tied to the police would not bring about fundamental change within the institution.
Such skepticism is understandable, given that the recommendations of the Joint Fact-Finding Team (TGPF) for the Kanjuruhan tragedy have yet to be fully implemented by the police, particularly with respect to transparency and thorough investigations into all those responsible.
Indeed, police reform has proven extremely difficult to realize. Even during the early Reform era, when the People’s Consultative Assembly Decree No. VII/2000 mandated that police officers retire or change status if they wished to serve outside the police force, the reality today shows otherwise, according to former chief of the Indonesian Military’s intelligence agency, Soleman B. Ponto. According to him, there are currently 4,351 active police officers serving outside the formal police structure.
It is therefore unsurprising that within the first 100 days of President Prabowo’s administration, the National Police ranked as the least trusted law enforcement institution, with a public trust level of just 71 percent, significantly behind the Attorney General’s Office (77 percent), the courts (73 percent) and the Corruption Eradication Commission (72 percent).
This data starkly illustrates the depth of public mistrust and makes the case for a change of guard even more pressing.