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.
View moreTransportation
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.
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Indonesia’s official response to the attack on Iran by Israel and the United States is unusual to say the least. The Foreign Ministry in a statement said Indonesia deeply regretted the breakdown of the negotiations between the US and Iran, offered to mediate to break the impasse between the two countries, and added that President Prabowo Subianto Prabowo Subianto Djojohadikusumo, 72, is a retired Army lieutenant general, a businessman and the incumbent Defense Minister (2019-present). Due to his proximity to power throughout his military career, he entered politics in 2004 to pursue his dream of becoming the nation’s president. had “stated his readiness to launch diplomatic visits straight to the heart of the conflict, if necessary”.
While Prabowo may be genuine in his intentions for peace, the more pertinent question is would the US and Iran take him seriously? Would Israel?
Iranian Ambassador to Indonesia Mohammad Boroujerdi poured cold water on the proposal, saying Iran would not launch any new negotiations “with the enemy”. Out of diplomatic courtesy, the ambassador said his government appreciated Prabowo’s gesture.
There has not been any official response from the US. Israel, which is a party to the conflict, has not responded, but that is probably because the Indonesian statement makes no reference to Israel, with which Jakarta has no diplomatic relations.
The statement also fell short of condemning the attack as an act of aggression in violation of international law, just as Indonesia also refrained from condemning the US bombing of Venezuela and the abduction of its president, Nicolas Maduro, in January.
This time, the statement expressed deep regret at the breakdown of the negotiations and the ensuing escalation of the conflict. There was not even any recognition of the attacks.
At any rate, President Prabowo may lack the qualifications or credentials to be a peacemaker.
His decision to sign up to the Board of Peace set up in January by US President Donald Trump has undermined his claim to be an honest broker, especially given widespread criticism of the board, which was set up to enforce Trump’s peace initiative in Gaza.
At home, critics are still not convinced that joining the board will afford Indonesia the voice to convince Israel and the US to work toward the creation of an independent Palestinian state under the two-state solution. Nevertheless, they were willing to give him the benefit of the doubt on his claim that this was the only option available to stop Israel’s killing of Palestinians in Gaza.
Prabowo may appear to have the attention of Trump through their encounters in the lead up to the formation of the Board of Peace, but he has no direct link with Israel, and has not established a rapport with the Iranian leadership, or what is left of it following the death of Supreme Leader Ali Khamenei and several other top leaders by Israel-US bombing.
Prabowo has visited just about every country that matters in the Middle East, with the exception of Iran. If his Middle East campaign was played out as part of his strategy to get Indonesia involved in the peace process in the region, Iran should have been on his itinerary.
Prabowo, a former Army general, also lacks the personal credentials as peacemaker, at home or abroad. Former vice president Jusuf Kalla built his peace-making track record in resolving conflicts in Indonesia’s Maluku and Aceh regions, and he had been sent on missions to Myanmar and several other hot spots in the region to help find peace.
Critics say tackling the dispute between US and Iran, and presumably Israel, is almost an impossibility or certainly beyond Indonesia’s or Prabowo’s capability.
If he wants to build his peace-making credentials, he may want to start small and on something closer to home, for example the border dispute between Cambodia and Thailand, India and Pakistan over Kashmir, or now between Pakistan and Afghanistan.
The suggestion for Prabowo to mediate the peace between the US-Israel and Iran nevertheless prompted a debate at home.
Former deputy foreign minister Dino Pati Djalal questioned Indonesia’s effectiveness now that it has become clear that the intention of the attacks is to bring about regime change in Tehran and no longer about dismantling Iran’s nuclear and weapons’ capability.
Describing the proposal as unrealistic, Dino said Trump is not likely to allow anyone to intervene in his campaign against Iran. He also said Indonesia may not have gained the trust of Iran given the minimum contacts between Prabowo and Iranian leaders in Tehran, while the idea of Prabowo meeting with Israel’s Prime Minister Benjamin Netanyahu, should that happen, could be a “political suicide” for him at home.
Some politicians, however, support Prabowo’s peace initiative.
Sukamta, the deputy chair of the House of Representatives Commission I on foreign affairs, said the proposal was consistent with Indonesia’s free and active foreign policy principle and the constitutional mandate for Indonesia to promote global peace.
But unlike the Prabowo administration, Sukamto of the Prosperous Justice Party (PKS) condemned the US-Israel attack on Iran as military aggression that threatens regional stability.
