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

July 14, 2026

President Prabowo Subianto's free nutritious meal program was conceived as a transformative social policy to improve child nutrition, strengthen human capital and demonstrate the state's ability to deliver tangible benefits to millions of Indonesians. It is also the policy most closely associated with his presidency. More than any other initiative, its success or failure will shape public perceptions of his administration.

Yet the growing wave of corruption scandals engulfing the National Nutrition Agency (BGN), the institution responsible for implementing the program, suggests the problem may run deeper than individual misconduct. Prosecutors have accused former senior BGN officials of using foundations connected to meal-production kitchens to obtain unlawful benefits, and of manipulating procurement through budget markups and other irregularities.

Recent arrests and investigations have transformed what initially appeared to be isolated allegations into a broader governance crisis. The most important question is no longer whether corruption occurred, but whether the program's design itself makes corruption unusually difficult to prevent.

The allegations against former BGN leaders illustrate this vulnerability precisely. Prosecutors allege that foundations operating nutrition fulfillment service units (SPPG) - the kitchens producing meals under the program - were used to generate illicit profits, while procurement was allegedly manipulated through inflated contracts and interference in purchasing decisions.

The significance lies not only in the money involved but in the fact that the alleged misconduct spans multiple levels of the program's operational structure. When irregularities appear simultaneously in kitchen management, foundation oversight, procurement planning and contract execution, it becomes hard to argue the problem is merely a few bad actors.

The deeper concern is that the program's governance architecture appears to blur the distinction between operators and overseers. The government has repeatedly emphasized that the program is subject to strict monitoring by major state institutions, including the Attorney General's Office (AGO), the National Police and the Indonesian Armed Forces (TNI). Yet institutions linked to these same organizations have also become involved in establishing, managing or supporting the kitchens that form the program's backbone.

The police, for example, have publicly participated in expanding free meals program kitchens, with law-enforcement and security institutions playing prominent roles in supporting implementation - even boasting about the quality of the kitchens they run. From a governance perspective, this creates a fundamental conflict of interest.

Effective anti-corruption systems depend on a clear separation between those who implement programs and those who monitor them. When institutions are simultaneously participants and supervisors, accountability mechanisms risk losing their effectiveness. Even if every actor behaves with integrity, the mere perception of compromised independence can undermine public confidence.

This is why simply replacing the BGN's leadership is unlikely to fix the underlying problem. The government has already carried out a reshuffle following mounting criticism, but management changes alone rarely solve structural governance failures.

New leaders inherit the same institutional incentives, the same procurement architecture and the same oversight weaknesses. If opportunities for conflicts of interest, opaque contracting and political influence remain embedded in the system, corruption risks will persist regardless of who holds senior positions. Focusing on individuals rather than institutions is politically understandable, but it risks obscuring the larger issue. Corruption flourishes not only because individuals break the rules but because systems are built in ways that make abuse easy, profitable and hard to detect.

Because the free meals program is Prabowo's signature policy, its reputation is inseparable from his own. Every new allegation becomes a test of presidential leadership. If the public comes to believe corruption is endemic to the program, criticism will not stay confined to BGN officials or contractors - it will increasingly target the administration that designed, promoted and defended the initiative. This risk is compounded by what many observers see as a reluctance by the president to fully acknowledge the structural nature of the problem.

Framing corruption scandals as isolated incidents despite mounting evidence of broader governance weaknesses can make a government appear more concerned with protecting a program's image than fixing its vulnerabilities - a perception that may ultimately cause more reputational damage than the scandals themselves.

The long-term sustainability of the free meals program depends not merely on prosecuting wrongdoers but on redesigning the system of oversight: independent audits, full transparency of contracts and kitchen operators, public disclosure of procurement decisions, parliamentary scrutiny and stronger civil-society monitoring. Above all, oversight institutions must be genuinely independent from the entities they supervise.

Without such reforms, the scandals will continue to erode confidence - not only in the free meals program, but in Prabowo's capacity and willingness to ensure accountability within his most important policy initiative.

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