Sector

Transportation

With a population exceeding 280 million people, Indonesia relies heavily on a robust transportation network encompassing sea, air, and land routes to connect its vast island chain and facilitate economic activity effectively. This reliance has made the transportation sector a leading sector in the country.

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Transportation

With a population exceeding 280 million people, Indonesia relies heavily on a robust transportation network encompassing sea, air, and land routes to connect its vast island chain and facilitate economic activity effectively. This reliance has made the transportation sector a leading sector in the country.

In 2022, the sector contributed Rp 983 trillion to the national gross domestic product (GDP) at current prices. Notably, regions where transportation is a leading sector include Aceh, West Sumatra, Bengkulu, Lampung, West Java, the Special Region of Yogyakarta, and Central Kalimantan. Additionally, North Kalimantan, Gorontalo, North Sulawesi, Maluku, East Nusa Tenggara, and Bangka-Belitung consider the transportation sector as a leading sector.

The sector has also experienced a significant boost in recent years, with the transportation and warehousing subsector achieving a staggering GDP growth of 15.93 percent year-on-year (YoY) in the first quarter of 2023.

During the COVID-19 pandemic, Indonesia’s auto industry was severely affected, leading to a decline in both vehicle sales and production. Despite this decline, the transportation sector as a whole continued to attract foreign direct investments (FDI). In 2023, foreign companies poured roughly US$2 billion into the country’s vehicle and other transportation subsectors, highlighting the continued potential that investors see in this sector.

In terms of land transportation, infrastructure projects supporting rail transport such as the Light Rail Transit (LRT), started operations in mid-August 2023. Additionally, the development of Phase 2 of the Mass Rapid Transit (MRT) Jakarta, which includes new routes, is currently underway, with 6 kilometers already completed out of a total of 13.3 kilometers. Moreover, railway transportation saw a year-on-year increase of 69.37 percent in the number of passengers nationwide.

Sea transportation is also an important subsector of the transportation industry, primarily due to the trade sector’s heavy dependence on this mode of transportation. It is highly favored for its perceived economic efficiency in transporting goods. Although sea transport may not be the main method of transportation for many individuals, the number of passengers using sea transport in 2023 increased by 13.30 percent compared to the previous year.

Furthermore, air travel in Indonesia continues to rise with the increase in economic activity. The number of passengers using domestic air transportation increased by 32.69 percent year-on-year. Additionally, Soekarno Hatta International Airport has surpassed Singapore’s Changi Airport to become Southeast Asia's busiest airport in April 2024. According to reports, the airport's flight seat capacity has also reached 3.34 million, the highest among airports in the Southeast Asia region.

Latest News

December 26, 2025

In a surprising turn of events to cap off the year, Nahdlatul Ulama (NU), Indonesia's largest Muslim organization, has been shaken by turmoil that many observers are calling an internal coup. At the center of the storm is the sudden political ousting of Yahya Cholil Staquf as chairman of NU’s executive body Tanfidziyah.

The catalyst for his removal was Yahya's invitation of Peter Berkowitz, an academic described by critics as having ties to an "international Zionist network", to an internal NU event in August. Yahya, who has a history of engagement with Israel, apologized for the invitation, but it was to no avail.

While Yahya has refused to yield his position, the Syuriah, the organization’s supreme council, moved unilaterally. In an official plenary session held in Jakarta on Dec. 9, the council named senior NU cleric Zulfa Mustofa as the group's acting chairman. The move carried significant political weight, evidenced by the attendance of high-profile government officials and senior NU members: Religious Affairs Minister Nasaruddin Umar, Social Affairs Minister Saifullah Yusuf and East Java Governor Khofifah Indar Parawansa.

At face value, the move against Yahya appears paradoxical. Since his election as chairman of PBNU’s Tanfidziyah in 2021, Yahya has been widely perceived as a staunch ally of the ruling government. Under his leadership, NU has taken pragmatic, some say controversial, steps to align with state policies. Most notably, this included accepting mining concessions under a government scheme allowing mass organizations to manage coal mines.

This concession was formalized through a controversial revision of the Mining Law earlier this year. The law was ratified in just three days without meaningful public or expert consultation, sparking significant backlash. Supporters framed the deal as a path to financial independence for NU, while critics viewed it as a moral compromise that tethered the religious organization too closely to extractive interests and state patronage.

That said, internal power struggles are not new to the current political climate. Late last year, when President Prabowo Subianto was still president-elect, the Indonesian Chamber of Commerce and Industry (Kadin) underwent a similar upheaval. Its then-chairman, Arsjad Rasjid, who had led rival candidate Ganjar Pranowo's campaign, was ousted in favor of the Prabowo-backed Anindya Bakrie. Arsjad initially contested the move as unconstitutional but eventually stepped aside after a compromise was reached.

However, the current NU debacle presents a crucial difference. The Kadin coup was a move against a political rival. Yahya, by contrast, has given no indication of opposing state authority. If Yahya is indeed aligned with the government, why has he become the target of an internal purge?

Observers point towards a proxy war between business factions. One faction within NU is believed to be close to Garibaldi ‘Boy' Thohir, a prominent coal magnate and brother of Youth and Sports Minister Erick Thohir. Another faction is linked to Hashim Djojohadikusumo, a key political financier and Prabowo's brother. Yahya has often been associated with figures close to Hashim, raising the question: why would a faction linked to the President's inner circle allow, or perhaps even orchestrate, his removal?

The contradictions deepen when considering the role of former vice president Ma'ruf Amin. A senior NU cleric, Ma'ruf has long been one of Yahya's most important allies. Yet, Yahya's replacement, Zulfa Mustofa, happens to be Ma'ruf's nephew. Zulfa claims he received his uncle's blessing to assume leadership.

This claim, however, clashes with the former vice president's public stance. Ma'ruf has openly rejected the manner of Zulfa's appointment, declaring Yahya's ousting illegitimate. He argues that under the group's constitution, a change in leadership cannot occur through a mere plenary session; it requires an Extraordinary Muktamar (Congress), reserved for emergency situations.

With NU now effectively split into dual leaderships, and Yahya continuing to assert his legitimacy, the organization is trapped in a stalemate marked by paradoxical power plays. Given the magnitude of the rift, it remains to be seen whether the Prabowo administration will intervene to resolve this quiet coup d'état.

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