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.
View moreTourism
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.
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Students from Indonesia’s leading universities have once again taken to the streets in Jakarta and other major cities, about eight months after the last wave of mass protests turned violent. This time, they are specifically targeting President Prabowo Subianto’s leadership and governing style, which they blame for the country’s current economic difficulties.
Unlike in previous protests, however, the Indonesian Military (TNI) was deployed from the outset to help manage the situation amid growing calls from some government critics for political change. Despite a few minor scuffles, the demonstrations on June 12 remained largely peaceful, with both protesters and security forces exercising restraint.
Student leaders have vowed to return to the streets after giving Prabowo an opportunity to respond to their five-point list of demands. They also plan to reassess their strategy in light of the military’s involvement. The following Monday, additional student groups, joined by civil society organizations, staged demonstrations in Jakarta, suggesting that public dissatisfaction extends beyond university campuses.
The movement in Jakarta was led by the “Yellow Jackets,” a group of students from Universitas Indonesia, the country’s premier public university. They were joined by students from other public and private universities in the capital, as well as in several major cities across the country.
Under the banner “Toward a Bankrupt Indonesia,” the students are demanding that the government stop squandering state funds, reduce the prices of food and fuel and roll back the President’s flagship programs, including the free nutritious meal program and the establishment of the Red and White Rural Cooperatives program. They are also calling for an end to the military’s involvement in civilian affairs and for the President to acknowledge and take responsibility for policy mistakes.
The protests come amid an economic downturn marked by the rupiah’s decline to historic lows of more than Rp18,000 against the US dollar and a fall in the Jakarta stock market.
Analysts say that what began as a loss of confidence among foreign investors has spread to Indonesia’s middle class. The lower middle class, represented in part by the student movement, has expressed its frustration by taking to the streets. Analysts also point to an erosion of political confidence amid signs of shrinking civic space and the expanding role of the TNI in civilian affairs.
The protests last August targeted the House of Representatives over its perceived poor performance, particularly after legislators approved generous increases in their housing allowances. Students were soon joined by workers, and police attempts to crack down on the demonstrations led to violence that spiraled out of control. Prabowo subsequently ordered the military to help restore order.
This time, the military was deployed immediately as a backup force to assist the police.
In Jakarta, security forces were deployed to prevent students from staging their protest at the Hotel Indonesia Traffic Circle on Jalan Thamrin, the city’s main thoroughfare. Instead, they were directed toward the House of Representatives complex in Senayan. Student leaders, however, said the House was not their intended target.
Presidential Palace chief spokesman Mohammad Qodari said the students’ demands were broadly aligned with Prabowo’s efforts to make government spending more efficient and effective. He added that the free meals program was also under review following recent changes in the agency responsible for its implementation.
Qodari, however, did not address concerns about the military’s expanding role in civilian affairs, an issue that also featured prominently during the August protests.
For now, tensions remain contained. But with student leaders promising to reassess their strategy and public dissatisfaction showing few signs of easing, the prospect of renewed demonstrations cannot be ruled out.
