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 28, 2026

Special climate and energy envoy Hashim Djojohadikusumo, President Prabowo Subianto’s younger brother, has revealed a proposal to distribute free smartphones to social assistance (Bansos) recipients, but Coordinating Economy Minister Airlangga Hartarto has denied its existence. The conflicting statements have raised questions about how the initiative came to be announced, particularly as the government pursues a separate program to open bank accounts for 200 million people.

Hashim announced the free smartphone plan on Oct. 13, presenting it as a way to help Bansos recipients access digital banking services and receive government transfers. He linked the proposal to the government’s broader financial inclusion agenda, suggesting that smartphones would bridge the gap between opening bank accounts and enabling recipients to use them.

Following the announcement, Airlangga clarified that the government’s current plan involved opening bank accounts for up to 200 million people, with an initial deposit of Rp 50,000 (US$2.76) per account.

The rollout is expected to begin in the fourth quarter of 2026, supported by a budget of around Rp 3.8 trillion. The program will be implemented through state-owned lenders Bank Rakyat Indonesia (BRI) and Bank Syariah Indonesia (BSI).

Airlangga’s denial leaves the status of the free smartphone proposal unclear and raises questions about whether it was properly coordinated with the government’s existing plans.

Hashim’s proposal initially seemed plausible because it addressed a practical challenge left unanswered by the mass account opening program: how recipients would access and use their new accounts. Providing smartphones alongside bank accounts could give recipients a direct channel for managing their finances and receiving social assistance, potentially reducing their reliance on intermediaries.

This apparent synergy, however, does not necessarily mean that distributing devices is the most effective or economical way to achieve financial inclusion.

Bundling smartphones and mobile data plans or phone credit with social assistance would introduce substantial logistical and financial costs. Large-scale distribution would require additional procurement, delivery and maintenance arrangements. Meanwhile, ensuring that recipients used the devices for their intended purpose would be difficult.

Compared with providing cash or enabling access through existing devices and banking channels, the proposal could impose significant additional costs without guaranteeing better outcomes.

There is also a risk that recipients could pawn or resell the phones to meet more immediate financial needs, undermining the program’s intended benefits. Similarly, phone numbers distributed alongside the devices could be transferred or sold to third parties.

These possibilities raise a broader question: whether providing hardware is necessary to expand digital access, particularly when the government could instead focus on ensuring that recipients can use existing devices to access banking services securely.

The risks extend beyond the devices’ potential resale. Mobile phone numbers have become valuable gateways to financial accounts and digital services, as they are widely used for identity verification and account registration. Distributing SIM cards or registered phone numbers on a large scale could therefore create opportunities for misuse, including the transfer of registered numbers to third parties or their exploitation in fraudulent activities.

This concern is particularly relevant to Indonesia’s efforts to combat online gambling, which is illegal along with all forms of gambling. Operators have circumvented restrictions by exploiting bank accounts and phone numbers registered under third-party identities.

A large-scale distribution program could expand the pool of accounts and numbers available for resale or misuse, potentially making enforcement more difficult. Without adequate safeguards, an initiative intended to promote financial inclusion could inadvertently create new vulnerabilities in the digital financial system.

Ultimately, both the mass account opening program and the free smartphone proposal reflect the government’s focus on populist policies. But the recent mix-up further amplifies concerns about policy coordination and consideration of potential risks and impacts.

The episode also invites scrutiny of the political motivations behind the government’s increasingly ambitious promises, particularly amid concerns over public approval ratings. If the administration is seeking to rebuild public support through programs that offer immediate, visible benefits, it risks political urgency taking precedence over planning.

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