With President Joko Widodo, better known as President Jokowi, voted in for a second term in 2019, the focus in early 2020 was on key structural reforms – the kind of changes which could be difficult to adjust to but at the same time create new opportunities in sectors that are seen as underperforming, such as manufacturing. Draft versions of omnibus laws have been proposed to reform key areas…
The innovative tech scene in South-east Asia has garnered international attention. A jolt occurred in the international tech industry in early 2018, when the Singapore-based ride-hailing app Grab announced that it would take control of the Southeast Asian operations of its US-based competitor, and global first-mover, Uber. The purchase, which gave Uber a 27.5% stake in Grab, put the spotlight…
Consolidation is one of the biggest ongoing issues in Indonesia’s banking sector, representing a challenge for the authorities but also an opportunity for investors. The hundreds of financial sector licensees across the archipelago amount to a huge supervisory obligation for the country’s two regulators: Bank Indonesia, the country’s central bank, and the Financial Services Authority…
The role of cash is declining in Indonesia, due in large part to the significant growth of online payment choices. This comes as the Covid-19 pandemic has encouraged more people around the world to opt for cashless transactions to limit the spread of the virus, a trend that may continue to boost cashless transactions in Indonesia and other countries in the coming years. While the state is not…
Bancassurance has emerged as a high-growth segment for insurance sales in recent years, as banks seek new revenue sources and diversification of their customer portfolios. In January 2019 the Indonesia Life Insurance Association (AAJI) forecast that total life insurance premium generated through the bancassurance channel would grow by 15-30% that year, based on the proliferation of partnerships…
Indonesia had planned to add 35 GW of new capacity by the time President Joko Widodo, better known as President Jokowi, concluded his first term in 2019. This target has not yet been achieved, and the government has reappraised its outlook for the sector in its Electricity Supply Business Plan (RUPTL) 2019-28. Several elements of the state’s strategy remain the same as the previous plan,…
Oil production has been in steady decline for much of the past two decades in Indonesia, but the state aims to reverse this trend and achieve a production target of 1m barrels per day (bpd) by 2030. This will require investment from both domestic and foreign players, with policymakers searching for the right mix of state control and commercial incentives to achieve this. The upstream exploration…
In early 2019 Indonesia proposed the involvement of Chinese companies in dozens of projects worth an estimated $91bn. Although specific details about many of these developments are still unclear, Luhut Pandjaitan, coordinating minister of maritime affairs and investment, told local media that they would include seaports, industrial estates, power plants and tourism developments. These could…
The Belt and Road Initiative (BRI) is a far-reaching plan for transnational infrastructure development, linking five continents through land and sea corridors, and industrial clusters. Launched in 2013, it was initially planned to revive ancient trade routes between Eurasia and China, but the scope of the BRI has since extended to cover 138 countries, including 38 in sub-Saharan Africa, and…
In recent years the number of air passengers in Indonesia has risen rapidly, from 30m in 2009 to more than 115m in 2018. This was largely driven by two factors: the fast-growing middle class, which comprises an estimated 52m people; and the emergence of low-cost carriers, which have significantly improved regional connectivity. The country’s growing popularity as a holiday destination for…
