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.
Latest News
President Prabowo Subianto has reshuffled his cabinet for the fifth time just 18 months into his term. While the frequent adjustments may ostensibly reflect an effort to bolster effective governance, they also signal a state of perpetual political recalibration and unsteady organizational cohesion.
The cabinet is continually expanding through this constant reshuffling, primarily to accommodate various political allies, and therefore raises critical questions regarding the administrative efficiency and fiscal sustainability of such a large bureaucracy.
On April 27 at the Presidential Palace Complex in Central Jakarta, six high-ranking officials were installed in their new roles, including two newly created posts: Hanif Faisol Nurofiq as Deputy Coordinating Food Minister, Mohammad Jumhur Hidayat as Environment Minister, Dudung Abdurachman as Presidential Chief of Staff, Muhammad Qodari as head of the Government Communication Agency (Bakom), Hasan Nasbi as Special Presidential Adviser on Communications and Abdul Kadir Karding as head of the Quarantine Agency.
Following their inauguration, several indicated that they had been tasked with accelerating national priority programs to ensure effective policy delivery. Dudung, Qodari and Hasan, who have communication roles in the administration, emphasized the President’s directive to reinforce government communication channels. Environment Minister Jumhur has been tasked with addressing systemic challenges in waste management, while quarantine chief Abdul Kadir is to strengthen oversight of agricultural and livestock imports without disrupting international trade flows.
Beyond the official rhetoric, however, the latest reshuffle carries profound political and institutional implications. Following are some key takeaways.
First, political consolidation appears to supersede administrative efficiency. Five of the six appointees were integral members of Prabowo’s 2024 campaign team, suggesting that cabinet reshuffles serve as a mechanism for political patronage rather than meritocratic appointments based on performance.
It also comes amid global volatility that necessitates a streamlined, agile government. Instead, the cabinet has expanded to 48 ministers and 57 deputy ministers, nearly double those of former presidents Joko “Jokowi” Widodo (34 ministers, 31 deputy minister) and Susilo Bambang Yudhoyono (34 ministers, 19 deputies). Such expansion risks inflating coordination costs, diluting accountability and impeding interagency decision-making.
Second, there is a perceptible misalignment between appointees’ expertise and institutional mandates. Jumhur’s replacing Hanif as environment minister is a salient example.
Jumhur is known for his extensive labor activism background and his previous leadership role at the National Agency for the Placement and Protection of Indonesian Migrant Workers (BNP2TKI). But the environment portfolio demands high technocratic proficiency in climate governance, resource management and multilateral diplomacy.
This discrepancy risks a shift from evidence-based to politically motivated policy orientation, potentially undermining Indonesia’s credibility at international environmental forums.
Third, the government’s communication architecture remains fundamentally unstable. The roles of both presidential chief of staff and Bakom head have undergone frequent rotations since Prabowo took office in October 2024. The former has transitioned from AM Putranto to Qodari and now Dudung, vacillating between civilian and military leadership.
Simultaneously, the Bakom leadership has rotated from Hasan to Angga Raka Prabowo, who is also deputy communications and digital minister, and most recently to Qodari. It also underwent rebranding from the Presidential Communications Office (PCO).
The appointment of former Army chief Dudung as chief of staff is widely interpreted as an attempt to reinforce centralized, top-down control. As a strategic extension of presidential authority, this leadership role is positioned to "de-bottleneck" stalled programs. Thus, the return of a military figure suggests a move to tighten execution and accelerate policy implementation through a command-oriented approach.
Broadly, this fifth reshuffle reflects a shift toward a governance model where centralized coordination and loyalty-based appointments take precedence over decentralized, technocratic policymaking. While strengthening government communication channels may enhance short-term narrative control and political stability, it carries significant trade-offs, namely the erosion of institutional autonomy and the marginalization of rigorous policy deliberation.
As these officials assume their new roles, public expectations remain high for increased coordination that will eventually yield a more coherent and effective governance framework.
