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

March 11, 2026

Indonesia’s official response to the attack on Iran by Israel and the United States is unusual to say the least. The Foreign Ministry in a statement said Indonesia deeply regretted the breakdown of the negotiations between the US and Iran, offered to mediate to break the impasse between the two countries, and added that President Prabowo Subianto Prabowo Subianto Djojohadikusumo, 72, is a retired Army lieutenant general, a businessman and the incumbent Defense Minister (2019-present). Due to his proximity to power throughout his military career, he entered politics in 2004 to pursue his dream of becoming the nation’s president. had “stated his readiness to launch diplomatic visits straight to the heart of the conflict, if necessary”.

While Prabowo may be genuine in his intentions for peace, the more pertinent question is would the US and Iran take him seriously? Would Israel?

Iranian Ambassador to Indonesia Mohammad Boroujerdi poured cold water on the proposal, saying Iran would not launch any new negotiations “with the enemy”. Out of diplomatic courtesy, the ambassador said his government appreciated Prabowo’s gesture.

There has not been any official response from the US. Israel, which is a party to the conflict, has not responded, but that is probably because the Indonesian statement makes no reference to Israel, with which Jakarta has no diplomatic relations.

The statement also fell short of condemning the attack as an act of aggression in violation of international law, just as Indonesia also refrained from condemning the US bombing of Venezuela and the abduction of its president, Nicolas Maduro, in January.

This time, the statement expressed deep regret at the breakdown of the negotiations and the ensuing escalation of the conflict. There was not even any recognition of the attacks.

At any rate, President Prabowo may lack the qualifications or credentials to be a peacemaker.

His decision to sign up to the Board of Peace set up in January by US President Donald Trump has undermined his claim to be an honest broker, especially given widespread criticism of the board, which was set up to enforce Trump’s peace initiative in Gaza.

At home, critics are still not convinced that joining the board will afford Indonesia the voice to convince Israel and the US to work toward the creation of an independent Palestinian state under the two-state solution. Nevertheless, they were willing to give him the benefit of the doubt on his claim that this was the only option available to stop Israel’s killing of Palestinians in Gaza.

Prabowo may appear to have the attention of Trump through their encounters in the lead up to the formation of the Board of Peace, but he has no direct link with Israel, and has not established a rapport with the Iranian leadership, or what is left of it following the death of Supreme Leader Ali Khamenei and several other top leaders by Israel-US bombing.

Prabowo has visited just about every country that matters in the Middle East, with the exception of Iran. If his Middle East campaign was played out as part of his strategy to get Indonesia involved in the peace process in the region, Iran should have been on his itinerary.

Prabowo, a former Army general, also lacks the personal credentials as peacemaker, at home or abroad. Former vice president Jusuf Kalla built his peace-making track record in resolving conflicts in Indonesia’s Maluku and Aceh regions, and he had been sent on missions to Myanmar and several other hot spots in the region to help find peace.

Critics say tackling the dispute between US and Iran, and presumably Israel, is almost an impossibility or certainly beyond Indonesia’s or Prabowo’s capability.

If he wants to build his peace-making credentials, he may want to start small and on something closer to home, for example the border dispute between Cambodia and Thailand, India and Pakistan over Kashmir, or now between Pakistan and Afghanistan. 

The suggestion for Prabowo to mediate the peace between the US-Israel and Iran nevertheless prompted a debate at home.

Former deputy foreign minister Dino Pati Djalal questioned Indonesia’s effectiveness now that it has become clear that the intention of the attacks is to bring about regime change in Tehran and no longer about dismantling Iran’s nuclear and weapons’ capability.

Describing the proposal as unrealistic, Dino said Trump is not likely to allow anyone to intervene in his campaign against Iran. He also said Indonesia may not have gained the trust of Iran given the minimum contacts between Prabowo and Iranian leaders in Tehran, while the idea of Prabowo meeting with Israel’s Prime Minister Benjamin Netanyahu, should that happen, could be a “political suicide” for him at home.

Some politicians, however, support Prabowo’s peace initiative.

Sukamta, the deputy chair of the House of Representatives Commission I on foreign affairs, said the proposal was consistent with Indonesia’s free and active foreign policy principle and the constitutional mandate for Indonesia to promote global peace.

But unlike the Prabowo administration, Sukamto of the Prosperous Justice Party (PKS) condemned the US-Israel attack on Iran as military aggression that threatens regional stability.

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