Economy
From The Report: Indonesia 2024
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Indonesia, with the world’s fourth-largest population and the 16th-largest economy, has seen considerable progress under President Joko Widodo, better known as President Jokowi, who has led the nation for a decade. His administration has driven substantial socio-economic advancement through extensive infrastructure improvements, regulatory reforms and a focus on enhancing the workforce. These efforts have attracted increased private and foreign investment and bolstered national productivity across key sectors such as manufacturing, mining, tourism, ICT and financial services, contributing to robust and consistent GDP growth.

At the same time, Indonesia faces ongoing challenges due to its diverse social and geographical landscape. As President Jokowi approaches the end of his term in 2024, the future economic trajectory will largely depend on the policies of his successor. Indonesia’s economy has demonstrated resilience amid global geopolitical and economic turbulence, reflecting the effectiveness of its infrastructure development and policy reforms. However, aligning regional authorities with central government goals and optimising the role of state-owned enterprises remain areas needing improvement. The smooth transition to the new administration, which is expected to maintain President Jokowi’s strategic direction, is seen as promising for investors. Continued demographic growth and a proactive stance towards international business are anticipated to strengthen further the country’s economic outlook in the coming years.

This chapter contains interviews with Yukki Hanafi, Acting Chairman of the Indonesian Chamber of Commerce and Industry (KADIN); and Shinta Kamdani, Honorary Trustee of the Indonesia Business Council for Sustainable Development (IBCSD).

Articles from this Chapter

Overview

Clear vision: Development strategies aim to boost the country’s economic standing as it nears a demographic sweet spot
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Indonesia has the world’s fourth-largest population and 16th-largest economy. During his 10 years as head of this G20 country, President Joko Widodo, better known as President Jokowi, has overseen significant socio-economic developments, implementing broad-based infrastructure upgrades and regulatory overhauls, strengthening the workforce, generating higher inflows of private and foreign investment, and boosting national productivity. Priority sectors – such as manufacturing, mining, tourism, ICT and financial services, among others – have been targeted to propel growth, and GDP has displayed robust and consistent expansion. Nevertheless,…

Analysis

Strong foundation: Human capital initiatives take centre stage as development plans focus on employment, education and upskilling
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Indonesia has made steady progress in economic development in recent years, anchored on the Golden Indonesia 2045 vision, which aims to industrialise the country, raise the GDP per capita to $25,000 and create 10m jobs by 2045. Prepared by the National Development Planning Agency (BAPPENAS), Indonesia’s National Medium-Term Development Plan (RPJMD) 2020-24 is designed to ensure long-term sustainability and consistency in national development efforts. In May 2023 BAPPENAS passed the 2024 work plan for the final year of the RPJMD 2020-24. This plan emphasises the pivotal role of human capital development in reducing poverty and enhancing industrialisation,…

Interview

Growth drivers: Yukki Hanafi, Acting Chairman, Indonesian Chamber of Commerce and Industry (KADIN), on fostering innovation and promoting sustainable business practices
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Interview: Yukki Hanafi, Acting Chairman, Indonesian Chamber of Commerce and Industry (KADIN) Which key industry segments should be prioritised to enhance economic growth and international competitiveness in the coming years? YUKKI HANAFI: Indonesia achieved 5.3% economic growth in 2022 and a peak in export value of $291bn. Aligned with the Golden Indonesia 2045 vision – launched in September 2023 – the country aspires for resilience while embracing inclusivity and sustainability. Strategic…

Interview

Green goals: Shinta Kamdani, Honorary Trustee, Indonesia Business Council for Sustainable Development (IBCSD), on opportunities for sustainable development to benefit local businesses
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Interview:Shinta Kamdani, Honorary Trustee, Indonesia Business Council for Sustainable Development (IBCSD) To what extent does sustainable development play a role in Indonesia’s business ecosystem? SHINTA KAMDANI: Sustainable development is increasingly crucial to Indonesia’s business ecosystem, addressing the country’s significant challenges and global demand for sustainable practices. It is one of the four fundamental pillars of Golden Indonesia 2045 vision, which aims to propel the…

Analysis

Greenlighting bonds: Markets around the globe are increasingly issuing green and social bonds in an effort to support sustainable growth
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Alongside significant political efforts to speed up the energy transition, green finance has been a key tool in financing growth, as governments, international institutions and lenders alike seek to support the shift towards renewables. The issuance of green bonds – financial instruments that fund environmentally sustainable projects – hit a new record of $596.3bn in 2021, according to the Climate Bonds Initiative (CBI). While this figured ticked down to $443.7bn in 2022, the UK-based organisation reported that cumulative aligned green bond volumes reached $2.6trn in the third quarter of 2023. It attributed much of this to pent-up demand and…