Economy and investment

Even as Indonesia slumped into its first recession since the Asian financial crisis of 1998, Indonesians remain confident about their economic prospects. Just over 82% are ‘optimistic’ or ‘very optimistic’ about their country’s economic performance over the next five years, a slight increase from 79% in 2011. But the number of people who are ‘very optimistic’ slipped over the same period to 12% from 16%.

Economic optimism
Overall, how optimistic are you about Indonesia’s economic performance over the next five years?

0%10%20%30%40%50%60%70%80%90% 16632011 12712021
  • Very optimistic
  • Optimistic

While the pandemic has sparked global fears about rising protectionism, Indonesians are still broadly in favour of globalisation and not overly concerned about its downsides. The 2021 poll shows that 62% believe globalisation is ‘mostly good’ for Indonesia, down from 67% in 2011, but returning to 2006 levels. The proportion of people who think that globalisation is ‘mostly bad’ dropped to just 7% from 26% in 2011. But significantly more Indonesians are unsure about the impact of globalisation compared to previous years.

Support for globalisation, and optimism about Indonesia’s economy, are shared across a range of demographic groups in Indonesia, including respondents of different socio-economic levels and ages, and across rural and urban residents.

Do you believe that globalisation, especially the increasing connections of our economy with others around the world, is mostly good or mostly bad for Indonesia?

0%20%40%60%80%100% 613182006 672672011 627312021
  • Mostly good
  • Mostly bad
  • Don't know

When considering their options, more Indonesians think that the Southeast Asia region and the United States are the most important economies for Indonesia, with 18% choosing Southeast Asia and the United States. Japan (15%) and China (12%) come next, followed by Australia (7%) and the European Union (5%). Some 21% think Japan is the second most important economy for Indonesia, followed by the United States (19%), Southeast Asia (16%), China (13%), Australia (11%) and the European Union (9%).

But most Indonesians do not see their Southeast Asian neighbours as role models when it comes to the economy. Japan and the United States are the countries that Indonesians are most likely to see as models for Indonesia’s future economic development. More than a quarter of respondents (26%) say that Indonesia should follow Japan’s lead on economics, followed by the United States (20%). Around 13% opt for China, 12% for Singapore and 3% each for Australia and Malaysia. Just over 9% say that Indonesia should follow its own model rather than seeking to emulate any other country.

Economic model for Indonesia
In your opinion, which one of these countries, if any, do you think should be a model for Indonesia’s future economic development?

0%10%20%30% 26Japan20United States13China12Singapore9Our own model3Malaysia3Australia2Other1India9Can’t choose

Since he was elected in 2014, Indonesian President Joko Widodo has made it a core mission to attract more foreign investment, enacting a controversial ‘omnibus law’ on job creation in 2020 that was designed to reduce the barriers for overseas investors. But Indonesians remain divided on their attitudes to foreign investment. Three in ten Indonesians (31%) say that the government is allowing too much investment, while 17% say the government is allowing too little. Just over a quarter of respondents (26%) think the government is allowing the right amount of foreign investment, while another quarter (26%) are not sure. Of those who think that Indonesia is allowing too much investment, 58% think that the government is allowing too much investment from China and 13% think it is allowing too much investment from the United States.

Levels of foreign investment in Indonesia
Do you think the Indonesian government is currently allowing too much, too little or the right amount of investment from foreign countries?

  • Allowing too much
  • Allowing the right amount
  • Allowing too little
  • Not sure

Indonesians appear to feel differently about foreign investment from different countries, with China eliciting the most negative reaction and Saudi Arabia the most positive. Only 30% of Indonesians say they are in favour of a company, bank or investment fund from China buying a controlling stake in a major Indonesian company. By contrast, 57% of respondents are in favour of a Saudi Arabian institution purchasing a controlling investment in a major Indonesian company.

A majority (53%) say they favour investments from Japan and Singapore, while slightly less than half (47%) favour investment from Malaysia. There appears to be less support for investment from Western countries. Around four in ten favour investment from the United States (42%) and Australia (41%). Only a third of Indonesians (37%) favour investment from the Netherlands.

Foreign investment
Are you in favour or opposed to a company, bank or investment fund from the following country buying a controlling stake in a major Indonesian company?

0%10%20%30%40%50%60%Total: 'strongly in favour' and 'in favour' 1542Saudi Arabia 846Singapore 1142Japan 641Malaysia 735United States 635Australia 433Netherlands 426China
  • Strongly in favour
  • In favour

Indonesians are very supportive of international development assistance with 87% saying that it has been ‘mostly good’ or ‘very good’ for Indonesia. When asked which countries provide Indonesia with the most foreign aid at the moment, a quarter (24%) say the United States, followed by China (16%), Saudi Arabia (12%), Japan (11%) and Australia (7%).

Around 19% say the United States gives the second most aid, with 17% selecting Japan, 13% Saudi Arabia, 12% Australia and 10% China.

Data from the Organisation for Economic Cooperation and Development (OECD) on official development assistance commitments to Indonesia from 2015 to 2019 show that the biggest bilateral donor in that period was Japan, followed by Germany, France, Australia, the United States, South Korea, Norway, Saudi Arabia, Switzerland and the United Kingdom. As a non-traditional donor, China does not submit its aid data to the OECD.