Indonesia’s Most Important Growth Capital Is Trust

Indonesia’s ambition to grow faster deserves serious support. A country with our development needs must create more productive jobs, build competitive industries and ensure that prosperity reaches more households. Yet ambition becomes investable only when businesses and citizens believe the policies supporting it will endure.

That is the central challenge behind Finance Minister Suahasil Nazara’s message on fiscal discipline and institutional coordination. His reaffirmation of the government’s commitment to the 3% budget deficit limit sends an essential signal: Indonesia intends to pursue its development priorities within a credible fiscal framework. Reuters

For the business community, the next question is practical: how will that credibility translate into the confidence to invest, expand production and hire?

In my view, the answer requires a stronger connection between sound public finances, productive state assets and the everyday experience of doing business.

Fiscal discipline gives Indonesia room to respond when conditions deteriorate. It also helps investors assess the durability of government commitments. But a deficit number alone cannot explain the health of public finances. The quality of spending, reliability of revenue and visibility of future obligations matter just as much.

An expenditure programme should therefore be judged by what it delivers. Does it improve learning and health? Does it reduce logistics costs? Does it connect businesses to markets? Does it attract investment that would otherwise remain on the sidelines?

The more clearly government can demonstrate these results, the stronger the case for its development agenda.

The distinction between APBN and Danantara offers an opportunity to sharpen this discipline. As described in the interview summary, the state budget and the investment institution can serve complementary purposes: public spending supports essential services and social protection, while commercially managed state assets help mobilise productive investment.

This arrangement will succeed through clear responsibilities and transparent risk allocation.

Danantara should demonstrate its value through stronger companies, better capital allocation and credible partnerships with private investors. Its performance should be assessed through disclosed financial results, operational improvements and the additional investment its participation makes possible.

At the same time, public-service obligations must be identified and funded transparently. When an enterprise is asked to deliver a social objective, the cost should be visible. Otherwise, commercial performance becomes difficult to assess and fiscal exposure becomes harder to understand.

This principle matters when addressing troubled infrastructure projects. Moving a liability between public entities does not, by itself, improve the underlying economics. Restructuring must establish who bears the cost, how operations will improve and how future losses will be contained. Taxpayers and investors both benefit from that clarity.

The same discipline should guide the pursuit of 8% growth.

Government can build foundations and address failures that markets cannot resolve alone. Sustained acceleration, however, requires firms of all sizes to become more productive and more willing to invest.

From a business perspective, that willingness depends on practical conditions: predictable regulations, reliable energy, efficient logistics, skilled workers, accessible financing and consistent treatment across government agencies.

Investment promotion must therefore extend beyond announcing opportunities. It must remove the obstacles that delay their execution.

Digital government can make a substantial contribution here. A business should be able to submit verified information once and have it used appropriately across authorised public services. Licensing requirements should be clear, processing times measurable and decisions traceable.

Connecting these processes can reduce compliance costs while improving accountability. It can also help smaller enterprises participate in formal supply chains and compete for opportunities previously accessible mainly to larger companies.

Digital transformation should consequently be treated as part of economic policy. Its value lies in the time saved, uncertainty reduced and productive activity enabled.

Institutional coordination is equally consequential. Investors need confidence that fiscal policy, monetary policy and state investment decisions are mutually coherent, while each institution retains responsibility for its mandate.

That confidence grows when public communication explains objectives, trade-offs and risks consistently. Markets can evaluate difficult choices more effectively when government makes the reasoning and fiscal consequences visible.

Indonesia should apply a similar approach to natural-resource export earnings. Retaining more proceeds within the domestic financial system can support market depth. Policy should also make those funds useful to exporters through competitive financial instruments, effective hedging and predictable access for legitimate business needs. Enforcement against underinvoicing should be supported by reliable data and consistent procedures.

Across these priorities, the underlying task is the same: make Indonesia a place where long-term commitments can be made with confidence.

I would judge progress through three outcomes: stronger productivity from public spending, additional private investment mobilised through state assets, and lower costs for businesses dealing with government.

These are outcomes that citizens, investors and policymakers can all recognise.

Indonesia has the ambition to grow faster. Converting that ambition into durable prosperity requires institutions that keep their promises and policies whose results can be demonstrated.

Trust is built through that record of delivery. And once earned, it becomes one of the most powerful forms of capital a nation can possess.