Sector
Trading
Indonesia, a developing country rich in natural resources and boasting the 4th largest population in the world, maintains an extensive trade presence. In 2023, the national trade balance reached US$480.7 billion, having grown significantly compared to the pre-pandemic period in 2019, when it stood at US$338.96 billion. Moreover, as of March 2024, the country has officially recorded a trade balance surplus for its 47th consecutive month.
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Trading
Indonesia, a developing country rich in natural resources and boasting the 4th largest population in the world, maintains an extensive trade presence. In 2023, the national trade balance reached US$480.7 billion, having grown significantly compared to the pre-pandemic period in 2019, when it stood at US$338.96 billion. Moreover, as of March 2024, the country has officially recorded a trade balance surplus for its 47th consecutive month.
In terms of exports, Indonesia’s top export commodity has historically been mineral-based fuels, especially coal. However, in the global market, Indonesia is a superpower in the exports of vegetable oils, particularly palm oil, having captured roughly 20 percent of the market with a total export value of US$35.2 billion in 2022. Behind that, Indonesia also leads in nickel exports, with a total export value reaching US$5.8 trillion or 14 percent of global exports.
In 2023, China emerged as Indonesia’s top partner for both exports and imports, with a total annual value of US$62.3 billion and US$62.2 billion, respectively. Meanwhile, the nation’s next top export destination is the US, with a total annual value of US$ 23.2 billion, while the next top import country of origin is Japan, with a total annual value of US$ 16.4 billion.
For trades on the level of individual consumers, the main driver of growth has been the rise in e-commerce throughout the past few years. E-commerce gross market value (GMV) grew by 20 percent from US$48 billion in 2021 to US$58 billion in 2022. This growth persisted to 2023, as e-commerce GMV grew by 7 percent to US$62 billion. E-commerce grew rapidly as it provided a means for Indonesian consumers to maintain access to goods and services during the pandemic period of 2020-2022. However, by the time the pandemic ended, e-commerce had grown ubiquitous and became a staple in the day-to-day lives of the average Indonesian.
Meanwhile, the domestic retail sector in Indonesia is driven by the sale of automotives. The retail of automotives alone in the country reached a gross domestic product (GDP) of US$174.35 billion in 2023, contributing to roughly 13.53 percent of Indonesia’s total GDP of US$1.3 trillion for that year at current market prices. Moreover, the country also achieved a per capita GDP of US$ 4,919.
Strong trade growth followed by increasing access to goods has bolstered local consumer confidence in Indonesia despite the period of uncertainty throughout 2023. According to Bank Indonesia’s monthly consumer confidence survey, Indonesians entered 2024 with high confidence, with the confidence index rising from 123.8 in December 2023 to 125.0 in January 2024. Moreover, this increase is even higher compared to same period the previous year, as a consumer confidence index of 123.0 was recorded for January 2023.
Latest News
The revision of the Indonesian Military (TNI) Law has not only sparked widespread controversy in public but interestingly also revealed a semblance of a rift within the government and military leadership.
The revision has provoked a wave of criticism and protests from civil society, especially due to the closed and rapid deliberation of the draft, which is feared will result in low-quality legislation that fails to anticipate long-term challenges.
Among key arguments against the revision is a provision in the draft law that allows active military personnel to occupy civilian posts in five more government institutions based on the President’s discretion. The opposition, mainly civil society groups, insists that the revision will further damage the hard-won democracy achieved by the Reform movement since 1998.
The concern seems to be understandable as there are active military officers holding strategic civilian posts in the government of President Prabowo Subianto, such as Lt. Col. Teddy Indra Wijaya as the cabinet secretary and Maj. Gen. Novi Helmy as president director of the State Logistics Agency (Bulog).
Prevailing Law No. 34/2004 on the TNI stipulates 10 civilian posts that military personnel can occupy without having to give up their military careers. Through the revision, the posts will be expanded to 14.
The new civilian jobs that can go to active military personnel are those in the fields of border management, disaster relief, counterterrorism, maritime security (coast guard) and the Attorney General’s Office (AGO). The military’s entry to the latter four institutions has been in place for some time but has not been addressed in the TNI Law.
TNI chief Gen. Agus Subiyanto maintains that military officers assigned to civilian institutions outside of the 14 fields mentioned in the new law should retire from service. He did not explicitly name the officers, but many believe he was referring to Teddy and Novi.
In contrast, Army chief of staff Gen. Maruli Simanjuntak jumped to the defense of the two officers, saying they did not need to quit the military because their assignments came from the President, who is also the supreme commander of the TNI, besides their expertise is needed by the country. Maruli also asked those who oppose this arrangement to not create problems in public, which he said would only lead to division.
Agus was promoted to the TNI’s top post by then-president Joko “Jokowi” Widodo in November 2023 in place of Adm. Yudo Margono. Agus served as the Surakarta military commander when Jokowi was the mayor of the city. In November 2020, Jokowi chose Agus as commander of the presidential security detail.
While Agus is set to retire in August, according to the current TNI Law, Maruli still has about three more years left before reaching the retirement age of 58. Like Agus, Maruli is deemed as part Jokowi’s inner circle, being the son-in-law of Luhut Pandjaitan, known as one of Jokowi’s most trusted aides and a close ally to President Prabowo.
The new law, if passed by the House of Representatives, however, will open up the possibility for Agus to serve longer as the draft law stipulates that four-star generals can serve until they reach 63 years old with a possible extension to 65 years old.
For non-commissioned officers, the retirement age is set at 55, while for middle-ranking officers 58. The retirement age for high-ranking officers is also extended to 60, 61 and 62 for one-star, two-star and three-star generals, respectively.
A minor change has also been made to Article 3, which concerns the relationship between the TNI and the president, and between the TNI and the Defense Ministry. The draft revision simply confirms that the TNI falls under the president when it comes to the use or deployment of troops. On the other hand, the draft establishes the authority of the Defense Ministry to coordinate strategic planning and provide administrative support for the TNI.
All in all, the revision of Law 34/2004 has failed to touch on essential aspects of building the TNI as a more professional defense force. The draft only focuses on administrative matters, costing the policymakers their chance to reformulate defense policies that are relevant to current challenges and threats.
