The Indonesian capital market views the new leadership of Prabowo Subianto and Gibran Rakabuming Raka with optimism. However, specific measures are essential to ensure the sustainability of this favorable outlook.
According to Asep Muhammad Saepul Islam, commonly known as Amsi, the founder of Syariah Stock, Prabowo’s leadership could bolster investor confidence if political stability and security remain steady and if pro-investment economic policies are upheld.
Prabowo’s experience as Minister of Defense demonstrates his capability to maintain stability, a crucial element in attracting both foreign and domestic investments. Indonesia’s economic growth could benefit over the next five years if the government prioritizes infrastructure, digitalization, and the competitiveness of national industries.
“The target of 8% economic growth is ambitious but achievable with successful infrastructure investments and economic reforms that drive national productivity,” Amsi remarked on Wednesday (25/10).
Nonetheless, global challenges, such as trade uncertainties and geopolitical tensions, present potential risks that should not be overlooked.
Strategic Tourism Investment to Drive Growth
To achieve the ambitious 8% growth target, Indonesia’s tourism sector is set to play a pivotal role, according to Bambang Haryo Soekartono of the Gerindra faction, a member of Commission VII DPR RI. Tourism’s extensive multiplier effect on the economy benefits a wide range of sectors, from manufacturing and MSMEs to services. This interconnectivity creates job opportunities and boosts tax revenue, providing a much-needed push for economic expansion.
“We cannot rely solely on existing data—the target of 7-8% economic growth requires continuous effort. Prabowo’s message is clear: we must focus on sectors that will drive growth, with a goal of reaching 8% by 2025.” Soekartono speaking to media on Monday (28/10/2024), said,
Data from 2022 underscores tourism’s importance, with the sector contributing 4.3% to GDP, equivalent to Rp. 842,303.16 billion, and generating foreign exchange revenue of US$ 4.26 billion. Additionally, tourism employed 21.26 million people in 2021.
While the Ministry of Tourism’s target of 8.5 million tourists was surpassed, reaching 10.41 million by November 2023, further growth in tourism requires skilled human resources. Training programs for roles such as taxi drivers, tour guides, and MSME operators will improve service standards, ensuring both international and domestic tourists enjoy the best of Indonesia’s diverse offerings.
Investor and capital market expert Rivan Kurniawan stresses that quality human resources are essential for sustainable growth, emphasizing that, although difficult and requiring time, pro-people programs can help Indonesia build a more skilled workforce.
Boosting Liquidity in the Market
Investor Kartika Sutandi (Tjoe Ai) expressed optimism about the new government’s leadership team, featuring figures like Sri Mulyani, Erick Thohir, Budi Gunadi Sadikin, and Luhut Binsar Pandjaitan.
Their inclusion suggests continuity in economic policies, aligning with foreign investors’ optimism. Tjoe Ai also noted that the government could improve liquidity in the market by encouraging pension fund allocations toward equities, adding further momentum to the positive sentiment in Indonesia’s capital market.
This optimism toward the new government, marked by strategic economic policies, infrastructure investments, and tourism sector growth, underscores investors’ confidence in the Prabowo-Gibran era’s potential to bolster Indonesia’s economy and maintain a favorable investment environment.
