The Jakarta Post
Indonesia Investment Coordinating Board (BKPM) head Thomas Lembong has identified e-commerce, tourism and lifestyle as Indonesia’s three main “engines for new economic growth” in the years to come.
“[These sectors] will take over commodities like palm oil and minerals to drive our 5percent plus annual GDP growth. Sectors that support this new growth, such as transportation and logistics, are prime candidates for being opened up further for foreign investments,” he said during an interview with Oxford Business Group consultancy in Jakarta on Friday.
All three growth engines are, notably, industries within the service sector, which recorded an average growth of 7.1 percent a year between 2010 and 2017. Service sector growth was not only higher than overall economic growth but also manufacturing growth (4.4 percent) and agriculture growth (3.7 percent) in the same period.
Indonesia’s e-commerce growth alone is expected to quadruple from US$12.2 billion last year to $53 billion by 2025, according to a frequently cited Google-Temasek report.
In boosting sector growth, Thomas supported further opening up the Indonesian market to foreign direct investment (FDI). BKPM data shows that FDI increased by 45.2 percent over the past five years from Rp 270.4 trillion ($19 billion) in 2013 to Rp 392.7 trillion last year.
Looking forward, Thomas is bullish over investments and economic growth in Indonesia, saying that “unicorns like Tokopedia, Traveloka, Gojek and Grab have transformed whole industries like retail and transportation, but I sincerely believe that we’ve barely scratched the surface.” (hen)