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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.
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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.
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Surging global oil prices and tightening domestic fuel supplies have thrust Indonesia’s long-running electrification agenda back into the spotlight. Policymakers are increasingly portraying the shift, especially in the motorcycle sector, as the most practical and immediate way to curb fuel consumption. As part of this, the government is raising targets for its electric motorcycle conversion program, aiming to gradually electrify more than 120 million gasoline-powered motorcycles nationwide.
Energy and Mineral Resources Minister Bahlil Lahadalia explains that the government plans to significantly accelerate the fuel-to-electric motorcycle conversion program, also known as the retrofit program, to approximately 6 million units per year, a sharp increase from the current annual target of about 200,000 units. The expansion, he noted, is supported by advances in conversion technology that make large-scale implementation more feasible.
To support the accelerated rollout, the government has established a dedicated energy transition task force to coordinate implementation across ministries and agencies. The task force is expected to speed up the conversion of Indonesia’s conventional motorcycle fleet, which is estimated at around 120 million units.
The urgency behind this policy shift is underscored by the severity of the current fuel situation. Global oil prices have surged above US$100 per barrel, driven by the United States-Israeli war with Iran. This has prompted the government to consider demand-side measures to contain consumption and ease supply pressures.
Electrifying motorcycles, which remain the dominant mode of transport in Indonesia, is one of the key measures under consideration. At the same time, the government is also exploring more aggressive steps, including the possible reintroduction of nationwide work from home (WFH) arrangements to temporarily reduce fuel demand.
The oil shock has also revived scrutiny of earlier initiatives such as the Agrinas program, which aimed to import trucks and other vehicles to support the rollout of Red and White Cooperatives (KMP) across regions. Conceived prior to the recent spike in oil prices, the KMP program was designed to strengthen logistics and distribution networks at the grassroots level, with plans involving large-scale procurement of vehicles to support cooperative activities nationwide. In the current context of elevated fuel costs, however, the program’s reliance on conventional vehicles raises new questions about its economic and energy efficiency.
The situation also casts uncertainty over other automotive ambitions, including the long-discussed national car (Mobnas) initiative. While the project has been framed as part of Indonesia’s industrial and technological advancement, its direction remains unclear, particularly as the government has yet to specify whether the vehicle will be developed as an electric model in line with its broader energy transition goals or continue to rely on conventional internal combustion engine technology.
The last substantive update on the initiative dates back to last year, when state-owned defense manufacturer PT Pindad was tasked with leading the design and development of the national car. Beyond that mandate, however, little detail has emerged regarding the project’s technical specifications, production timeline or potential partners.
