Indonesia emerges as a stable, credible driver of economic growth and social inclusiveness
Indonesia has once again found itself in the international spotlight. Recent events have prompted questions about its stability — yet such scrutiny is neither new nor unexpected.
With more than 286 million citizens of diverse ethnic and religious backgrounds, Indonesia is bound to face tensions. What matters is not the absence of challenges, but the ability to manage these.
Here, Indonesia has shown resilience. Its institutions continue to function, its economy remains strong, and its governance — though imperfect — is steadily becoming more inclusive.
These are the hallmarks of a democracy that, while noisy, is learning to endure.
Despite global headwinds — from geopolitical rivalry to supply chain disruptions — Indonesia’s economic performance has been reassuring.
In 2024, Indonesia’s GDP reached $1.38 trillion, growing at 5.03 percent, placing the country among the top three fastest growing G20 economies, alongside China and India.
The country also maintained one of the lowest inflation rates in the G20, at 1.03 percent as of March 2025. With a prudent debt-to-GDP ratio of 39.2 percent, the economy’s stability is further highlighted.
In addition, investment continues to flow. In the first half of 2025, Indonesia recorded 942.9 trillion rupiah ($59 billion) in realized investment, a 13.6 percent increase year-on-year, creating more than 1.25 million jobs.
These figures demonstrate that Indonesia is not merely weathering turbulence — it is inspiring confidence.
Meanwhile, the Chinese mainland is a major economic partner of Indonesia, consistently ranking as one of the top foreign investors. This robust relationship is characterized by significant foreign direct investment, particularly in key sectors vital to Indonesia’s economic development.
The Chinese mainland’s FDI in Indonesia has grown considerably, reaching $8.1 billion in 2024, making the Chinese mainland the third-largest investor following Singapore and Hong Kong of China.
A significant portion of this investment is concentrated in resource-rich sectors such as nickel and downstream industries, infrastructure, and the development of an EV ecosystem in the nation. The strategic nature of these investments shows deep economic interdependency.
For Indonesia, Chinese FDI provides the capital and technology necessary to develop its industrial and infrastructure sectors. For China, these investments secure a stable supply of critical raw materials and open up new markets.
Learning from historical reform, we can see that large developing nations rarely transform overnight. China’s reform and opening-up policy, initiated in the late 1970s under Deng Xiaoping, is a prime example of this.
This long-term strategy involved a gradual shift from a centrally planned economy to a more market-oriented one. The process, which took decades, was not without significant challenges.
However, its persistent efforts ultimately resulted in profound economic prosperity and global influence.
Over a 30-year period, from 1978 to 2018, China’s GDP grew at an average annual rate of nearly 10 percent, lifting more than 850 million people out of poverty and establishing the nation as the world’s second-largest economy.
The Indonesian government has set out strategic programs to ensure national resilience. These include food and energy security, digitalization, research and innovation.
Through education and talent development, the government aims to maximize its demographic dividend, with the working-age population projected to grow from 196 million in 2025 to 213 million by 2045.
In addition, the Indonesian government is also prioritizing energy security and a green transition by leveraging the country’s vast natural resources, including the world’s largest nickel reserves and a renewable energy potential of 437 gigawatts.
If successfully executed, these priorities will position Indonesia not just as a stable economy but as a self-sufficient and innovative one.
Indonesia’s role in global politics has always gone beyond its borders. From hosting the 1955 Bandung Asia-Africa Conference, which pioneered solidarity among newly independent nations, to its leadership in ASEAN, the G20, and South–South cooperation, Indonesia has consistently been a voice of the Global South.
Today, that voice is needed more than ever. The world faces polarization between blocs, and many developing countries are caught in the middle.
Indonesia’s credibility allows it to act as a bridge-builder between the North and the South, as well as the East and the West.
This broader role was on display during Indonesian President Prabowo Subianto’s presence in Beijing on Sept 3, where he joined President Xi Jinping and two dozen other state leaders at China’s military parade on Victory Day in the War of Resistance Against Japanese Aggression and the World Anti-Fascist War.
Prabowo’s presence was more than ceremonial. It underscored Indonesia’s commitment to dialogue and engagement, even amid domestic challenges.
It reaffirmed Indonesia’s determination to strengthen its comprehensive strategic partnership with China, built on decades of cooperation in trade, investment, infrastructure, education, and cultural exchange.
The visit also highlighted Indonesia’s solidarity with the Global South. By aligning with China’s vision of a community with a shared future for humanity, Prabowo positioned Indonesia as a state that upholds multilateralism, inclusivity, and peaceful cooperation.
Crucially, it showed Indonesia’s ability to maintain geopolitical balance: engaging with major powers while preserving independence. This strengthens Jakarta’s standing as both a resilient economy and a reliable partner in global governance.
Indonesia’s journey forward will not be free of friction. Social cohesion must be constantly nurtured; and economic transformation requires reforms that can be politically sensitive. Yet, history shows that Indonesia learns, adapts, and perseveres.
For partners and investors, the message is measured confidence: Indonesia acknowledges its challenges, but it also possesses the demographic strength, natural resources, and institutional capacity to overcome these issues.
President Prabowo’s Beijing visit is emblematic of this trajectory, demonstrating that domestic reform and international partnerships are two sides of the same coin.
With patience, persistence, and partnership, Indonesia can remain not only a stable partner today, but also a credible driver of growth and inclusiveness for the Global South in the years to come.
The author is an adjunct fellow with the ASEAN-China Research Center, Universitas Indonesia.
The views do not necessarily reflect those of China Daily.
