Sector

Tourism

Indonesia has designated tourism as a primary sector with a strong commitment to integrated infrastructure development and the enhancement of skilled and quality human resources. In 2023, the realization of investment in the tourism sector was predominantly driven by domestic investment (PMDN), reaching Rp 14.9 trillion. The PMDN funds were allocated to various types of businesses, including Rp 8.228 billion for star-rated hotels in West Nusa Tenggara, Rp2.601 billion for tourism areas in DKI Jakarta, and Rp1.656 billion for restaurants in Bali.

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Tourism

Indonesia has designated tourism as a primary sector with a strong commitment to integrated infrastructure development and the enhancement of skilled and quality human resources. In 2023, the realization of investment in the tourism sector was predominantly driven by domestic investment (PMDN), reaching Rp 14.9 trillion. The PMDN funds were allocated to various types of businesses, including Rp 8.228 billion for star-rated hotels in West Nusa Tenggara, Rp2.601 billion for tourism areas in DKI Jakarta, and Rp1.656 billion for restaurants in Bali.

Indonesia has identified 10 priority tourism destinations, including Borobudur, Mandalika, Labuan Bajo, Bromo Tengger Semeru, Thousand Islands, Lake Toba, Wakatobi, Tanjung Lesung, Morotai, and Tanjung Kelayang. Both domestic and international tourists constitute the country’s tourism market potential. In 2023, the number of foreign tourist visits reached 11.68 million, with the largest contributions coming from Malaysia, Australia, Singapore, China, and East Timor. This increase in visits also corresponds with the growth of tourism foreign exchange earnings, which reached US$6.08 billion in the first semester of 2023.

Major provinces attracting international tourists include Bali, DKI Jakarta, Riau Islands, West Nusa Tenggara, and East Java. Meanwhile, the number of domestic tourist trips in 2023 reached 749,114,709 trips, with DKI Jakarta, DI Yogyakarta, and East Java having the highest travel ratios.

Aside from the tourism sector, Indonesia’s creative economy sector has also shown significant growth, with exports reaching US$11.82 billion in the first half of 2023. The fashion subsector is the main contributor with US$6.56 billion (55.52 percent), followed by culinary products with US$4.46 billion (37.70 percent), and crafts with US$792.67 million (6.71 percent).

Moreover, the sector has realized US$225.28 million in foreign direct investment (FDI) and US$577.87 million in domestic direct investment (DDI) in the first quarter of 2023 out of the sector’s total target investment of US$2.68 billion in 2022. The Tourism and Creative Economy Ministry targets investment in this sector to reach US$6-8 billion, with the hope of creating 4.4 million new jobs in 2024.  This investment fund is planned to be allocated for the development of five-star hotel accommodations in super-priority tourism destination areas (DPSP) and 10 other priority tourism destinations.

Meanwhile, realized investments in the tourism sector in 2022 amounted to US$2.33 billion. Furthermore, FDI also contributes significantly, especially reaching Rp8.7 trillion from Singapore amounting to Rp2.458 billion, followed by Hong Kong with Rp1.720 billion, and India with Rp1.385 billion.

Latest News

October 31, 2025

The House of Representatives' recess budget has nearly doubled this year, despite mass protests over what the public views as lawmakers' excessive housing allowance amid economic hardships and ongoing calls for budget efficiency. Such budgetary controversies will likely persist, given Indonesia's long-standing tradition of poor accountability in public spending.

For fiscal year 2026, the House's total budget has surged to Rp 9.9 trillion (US$600 million), a 47.8 percent increase from Rp 6.69 trillion previously. House Deputy Speaker Sufmi Dasco Ahmad acknowledged the increase in recess funds, noting that each lawmaker would now receive Rp 702 million per recess, compared to Rp 400 million per member of the 2019-2024 House.

However, evidence circulated recently of a Rp 756 million transfer to each lawmaker in August 2025, instead of Rp 702 million. According to Dasco, this was the result of an error by the House Secretariat General.

A recess is when lawmakers conduct activities outside the legislature, meeting constituents and gathering their aspirations through regular work visits to their districts.

Dasco justified the increased recess budget by citing a rise in the number of locations lawmakers were required to visit. He added that the House was now tightening reporting requirements via a new app. Intended to improve accountability, the system requires members to log the location and type of activity and upload related documentation of each visit, including any results.

The recent demonstrations in August-September were triggered by lawmakers' high take-home pay, as determined by a new budget structure for 2025 agreed by the House Secretariat General and the Finance Ministry. The mass protests, many of which turned violent and in some cases targeted officials' private residences, were initially triggered by the new housing allowance of up to Rp 50 million per month that was introduced to replace the provision of official residences.

Following public backlash, the housing allowance was abolished on Aug. 31, but the communications allowance was increased to partially offset the cut, though the total amount remains smaller.

To further respond to public pressure, overseas visits have been suspended at least until the end of this year. These trips have long been viewed as one of the biggest spending items for lawmakers, with virtually no measurable or accountable outputs.

Unfortunately, Indonesia's budgeting culture treats budget absorption as a key indicator of annual performance that institutions must meet to maintain or increase future allocations. As a result, House bureaucrats tend to focus solely on spending, often with little regard for whether their budget use strengthens institutional function.

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