Oleh: Teguh Anantawikrama, Founder and Chairman of the Indonesian Tourism Investor Club and Vice Chairman of the Indonesian Chamber of Commerce
Indonesia enters 2026 with a paradox that defines many emerging economies at a moment of transition: capital is available, confidence is cautious, yet opportunity remains undeniable. The question before us is not whether Indonesia can grow, but how decisively we convert potential into execution—and tourism, I argue, will be one of the most effective engines to do exactly that.
Liquidity Is Not the Problem—Execution Is
Indonesia today has ample liquidity in its financial system. Broad money (M2) has approached around Rp 9.8–9.9 quadrillion, and the banking sector remains well-capitalized with loan-to-deposit ratios that still allow room for expansion. Bank Indonesia has consistently injected liquidity through macroprudential incentives and reserve requirement flexibility.
Yet, liquidity is not flowing smoothly into productive sectors. This is not due to lack of funds, but due to lack of bankable, low-friction projects. Investors and banks alike remain cautious when land acquisition is uncertain, permits are fragmented, or project timelines are vulnerable to disputes. In short, money is waiting for certainty.
Investor Concerns: Real, But Manageable
Foreign and domestic investors are not walking away from Indonesia—but they are increasingly selective. Two concerns surface repeatedly:
- Land acquisition security
Despite regulatory reforms and the establishment of land management mechanisms, investors still fear overlapping claims, slow resolution, and reputational risk. Capital prefers clarity over incentives. - Rising labor costs
Indonesia’s minimum wages have increased by around 5–7% annually in recent years. This is understandable—and socially necessary—but without parallel gains in productivity and skills, cost competitiveness erodes.
These concerns are real. But they are not deal-breakers. They simply mean Indonesia must compete on value, scale, and certainty, not on cheap labor alone.
Indonesia Remains a Land of Opportunity—The Numbers Prove It
Despite global uncertainty, Indonesia continues to attract investment:
- FDI exceeded Rp 900 trillion (≈ US$55 billion) in 2024, growing more than 20% year-on-year
- Total investment realization surpassed Rp 1,700 trillion, creating over 2.4 million jobs
- Domestic investors are increasingly active, signaling confidence in long-term fundamentals
Investors are not exiting Indonesia—they are waiting for better-structured opportunities.
Domestic Market: The Backbone of Resilience
Indonesia’s greatest structural advantage is its domestic market:
- Household consumption contributes around 54% of GDP
- Population of over 280 million people
- A productive-age population of more than 70%, still in its demographic sweet spot
This means Indonesia does not rely solely on exports or commodities to grow. When global demand weakens, domestic demand cushions the fall—a resilience many economies envy.
Resources: From Extraction to Value Creation
Indonesia is not only rich in scale, but in strategic resources:
- Nickel: ~59% of global production, central to EV batteries and energy transition
- Palm oil: ~58% of global supply, increasingly integrated into biofuel and downstream industries
- Food security: Over 53 million tons of paddy production, anchoring national resilience
The opportunity now is downstreaming with discipline—turning resources into industries, jobs, and exports with higher value-added.
Tourism: Indonesia’s Underleveraged Growth Engine
This brings me to tourism—Indonesia’s most inclusive, fastest-disbursing, and employment-rich growth engine.
Consider the facts:
- Tourism contributed roughly 4–5% of GDP directly, and up to 9% including indirect effects
- International arrivals rebounded to over 11 million visitors in 2024, with strong momentum continuing into 2025
- Tourism supports more than 20 million jobs, many of them MSMEs and community-based enterprises
- Every Rp 1 trillion in tourism investment creates far more jobs than capital-intensive extractive sectors
Tourism solves Indonesia’s liquidity challenge better than most sectors: It absorbs capital quickly, it creates jobs across skill levels, it activates domestic demand, and it anchors regional development, not just Java-centric growth.
More importantly, tourism reduces investor anxiety. Land use is clearer. Revenue cycles are faster. Domestic demand is built-in. And returns are visible.
From eco-tourism and wellness, to culture, gastronomy, marine tourism, and MICE, Indonesia does not lack attractions—it lacks integrated, investable portfolios.
Geopolitics and the Middle-Power Moment
The current global landscape—marked by conflict, sanctions, territorial disputes, and power rivalry, including tensions surrounding Venezuela—has increased the value of credible middle powers.
Indonesia is one of them. With political stability, strategic geography, resource depth, and a vast domestic market, Indonesia can position itself as: A neutral economic partner, a reliable supply-chain hub, and a safe destination for long-term capital.
Tourism strengthens this position. A country that is visited, trusted, and culturally admired wields soft power that converts into economic and diplomatic capital.
The Path Forward
Indonesia 2026 is not about choosing between optimism and realism. It requires both.
- Convert liquidity into certainty-driven projects
- Address land and labor issues through institutional clarity, not ad-hoc fixes
- Leverage tourism as a bridge between capital, jobs, and domestic demand
- Use our middle-power position to shape—not just react to—the global landscape
Indonesia does not need to convince the world it is an opportunity. The world already knows. What we must do now is execute with confidence, coherence, and courage.