ASIATODAY.ID, JAKARTA — Indonesia is accelerating efforts to transform itself from a traditional investment destination into a regional hub for global capital flows, unveiling an ambitious strategy that combines digital infrastructure, semiconductor development, and the creation of an international financial center.
Coordinating Minister for Economic Affairs Airlangga Hartarto said the government is positioning the country’s digital economy and financial sector as twin engines to achieve its target of more than 8% economic growth.
Speaking at the 10th anniversary of IDPRO 2026 in Jakarta on Wednesday, Airlangga stressed that artificial intelligence (AI) will play a central role in Indonesia’s future growth, but only if supported by robust digital infrastructure.
“Indonesia aims to achieve economic growth of more than 8%, and one of the key drivers will be the digital economy. AI can only flourish if it is backed by strong data center infrastructure,” he said.
Airlangga described data centers as a new “game changer” for Indonesia’s economy, as surging demand for AI, cloud computing, and digital services reshapes the country’s investment priorities.
Indonesia, he said, has competitive advantages including abundant land, relatively affordable energy, and growing renewable power capacity from geothermal, solar, and hydropower sources.
The government is also advancing regional digital integration through the ASEAN Digital Economy Framework Agreement (DEFA), which is expected to strengthen Southeast Asia’s digital economy while reinforcing Indonesia’s ambition to become one of the region’s leading digital hubs.
Beyond digital infrastructure, Jakarta is building the foundation of a domestic semiconductor industry through a partnership with UK-based technology company ARM to develop chip design capabilities.
The government also plans to train 15,000 young Indonesians in semiconductor technologies over the next three years to support future industries ranging from AI and the Internet of Things to autonomous vehicles and quantum computing.
However, Indonesia’s strategy extends well beyond the digital economy.
Airlangga revealed that the government is preparing the Indonesian International Financial Center (PFII), a flagship initiative aimed at attracting global capital flows on a scale far beyond the country’s current foreign direct investment model.
Indonesia currently attracts around IDR2.2 quadrillion (approximately US$135 billion) in annual investment. By comparison, Airlangga noted that Singapore’s status as a global financial center enables it to channel roughly Rp5 quadrillion in international capital before those funds are reinvested worldwide.
“Indonesia has enormous investment potential. What we need now is an international financial center capable of competing on the global stage,” he said.
The government has identified two to three potential locations in Bali, including the Kura Kura Bali Special Economic Zone, as candidates for the new financial hub. Authorities are also drafting a dedicated legal framework under the Financial Sector Development and Strengthening Law (P2SK), offering special tax incentives and regulatory facilities designed to attract international financial institutions and investors.
While critics have raised concerns that the initiative could resemble a tax haven, Airlangga argued that many of the world’s leading financial centers operate under similar competitive frameworks to attract global capital.
By combining large-scale investments in data centers, semiconductor manufacturing, digital talent development, and an international financial center, Indonesia hopes to reposition itself not only as Southeast Asia’s largest digital market but also as a major regional hub for technology, finance, and cross-border investment. (AT Network)
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