The Indonesia Investment Coordinating Board (BKPM) is targeting $64.7bn worth of foreign and domestic investment in 2020, which would mark an increase of 9.4% from 2019. Around 55% of the value is earmarked to come from foreign companies. However, this target is likely to be reassessed in light of the $50bn of investments that have been stalled across 24 projects – primarily in the energy,…
Indonesia entered 2020 trying to navigate global economic headwinds, including the pressure of uncertainty surrounding the outcome of the Covid-19 outbreak; however, the second-term election victory of President Joko Widodo, better known as President Jokowi, in 2019 and his coalition’s control of the national legislature has put the government in a solid position to enact much-needed reforms. With…
Indonesia is the only G20 economy in South-east Asia and is home to the world’s fourth-largest population. While it possesses a variety of natural resources, taking full advantage of this endowment is challenging due to constraints such as an archipelagic geography, an infrastructure deficit and workforce inefficiencies. Reforms aimed at addressing some of these shortcomings are on the table,…
Indonesia’s banking sector is large and crowded, with more than 1600 licensed commercial and rural banks. However, there remains plenty of untapped potential, given that the country has the fourth-largest-unbanked population worldwide. Indonesia is behind only China, India and Pakistan in terms of the number of people yet to access formal financial services, having 83.1m people without a…
The first cryptocurrency transaction in history was feted in just two words: “Running Bitcoin”, which came in the form of a tweet on January 11, 2009 by Hal Finney, a US software developer. Some 10 years and over 1600 initial coin offerings later, the world of crypto-, virtual and other digital currencies looks to have provoked an active response from financial sector leaders. However,…
Indonesia’s financial technology (fintech) sector is one of the most dynamic and competitive in the world, as evidenced by the emergence of four unicorn companies – start-ups valued at over $1bn – and one decacorn, valued at over $10bn. These new tech giants include one digital payment firm, OVO, while the rest offer a number of integrated payment options in e-commerce, ride-hailing and…
The development of Indonesia’s capital markets has been buoyed by strong investor interest and high, consumption-led economic expansion on the back of a government push to boost annual GDP growth. Ongoing reforms hope to liberalise Indonesia’s financial landscape and provide a legal and regulatory basis for product diversification and deeper institutional investment. As with most emerging…
Indonesia’s insurance sector holds considerable potential, given the country’s current low penetration rate, large domestic population and growing middle class. While the industry suffered a setback in early 2020 when allegations of a “pump-and-dump” scheme involving investment funds managed by two state-owned insurers came to light, the strong and immediate regulatory response should…
Indonesia has long been a key supplier to global energy markets, with the first oil discovery made in North Sumatra in 1885. Energy production has grown since then to include gas, coal and renewables, but the industry’s role within the country has evolved as oil fields have matured and the population has continued to grow. The focus has shifted from export-oriented production towards meeting…
Long considered one of the world’s premier mining destinations – for coal, as well as for precious and industrial metals – Indonesia finds itself in a transition period in 2020, with significant questions being raised about the future of the industry. In recent years the government has sought to expand and consolidate its role in terms of ownership of the sector, but this has been met…
