Sandiaga Uno is an Indonesian businessman and politician, co-founder of Saratoga Capital and former Minister of Tourism and Creative Economy (2000-2024).

From my vantage point of a 30-year career in finance, I have witnessed firsthand the profound economic transformation of Southeast Asia. The changes during this period have fundamentally reshaped the nature of economic opportunity in the region today.

In 1998, Indonesia’s economy was in disarray. Confidence had vanished, companies were distressed, and capital was scarce. Yet we saw one undeniable truth: immense potential for growth. At Saratoga Capital, our philosophy was straightforward—find undervalued assets, deploy capital across diverse industries, and bet on Indonesia’s resilience. Our goal was growth. Our motivation was recovery. And our returns were focused on restoring the nation’s confidence in its own potential.

Indonesia’s greatest strength: a young, ambitious, and skilled population | Source: Shutterstock
 

Those early years were driven by optimism and instinct. We did not have the luxury of being selective; our strategy, therefore, was to plant seeds everywhere. We trusted that the economy’s natural momentum would eventually allow them to flourish. This broad-based approach was not just a necessity—it was the right one for a country rebuilding from the ground up.

But the Indonesia of today is fundamentally different. A quarter-century has transformed us into Southeast Asia’s largest trillion-dollar economy, boasting deeper capital markets, a sophisticated private sector, and a new generation of entrepreneurs who think globally from day one. In this new landscape, growth is no longer automatic; it must be deliberately designed. The complexity of today’s market demands discipline and data. The old approach of simply “throwing seeds into the soil” and expecting them to grow is obsolete. Today, success requires a far more advanced economic strategy.

This shift in mindset mirrors a broader transformation in the global investment climate. The world is entering a period of strategic caution. As major economies recalibrate—tightening monetary policy, refocusing industrial strategy, and confronting geopolitical rivalries—global capital has naturally become more selective.

For Indonesia and the broader Southeast Asia region, this global caution is not a threat—it is a distinct opportunity. When the biggest players step aside, the field becomes less crowded. Valuations normalize. The race for deals gives way to a more disciplined conversation about fundamentals, not momentum. For long-term investors who understand this region—who see both its deep resilience and its growth potential—this is the ideal moment. It is a chance to enter the market at the right time, with the right focus.

 

Indonesia’s Economic Evolution

Indonesia’s turning point was not a single moment but a steady evolution. We moved from rebuilding after crisis to actively shaping our place in a more complex world. The global landscape has changed: supply chains have shifted, investment competition has intensified, and in an era of geopolitical rivalry, our neutrality has become a strategic asset. For 25 years, we have navigated these currents while strengthening our fundamentals at home. The confidence investors feel today rests on the foundational lessons of the generation that rebuilt Indonesia from crisis into credibility.

The reforms following that transformation reshaped our institutions, deepened our markets, and built a more confident nation. This evolution through reform and reinvention has defined Indonesia ever since. The discipline forged in the 1998 financial crisis laid the groundwork for two decades of steady growth and restored our credibility. Inflation was tamed, debt kept within prudent limits, and confidence in our financial institutions rebuilt. This sustained progress is what convinced investors that Indonesia could deliver stability in an otherwise volatile region.

Indonesia’s greatest strength is its demographic dividend: a young, ambitious, and skilled workforce, eager not just for jobs but for purpose. As our middle class expands, it brings new demands for better healthcare, sustainability, and technology. At the same time, our vast natural resources—from forests and mangroves to minerals and geothermal reserves—place Indonesia at the core of the global energy transition.

Through the National Strategic Projects initiative, Indonesia has executed one of Southeast Asia’s largest infrastructure drives. New ports, railways, and toll roads have shattered the barrier of distance, connecting once-divided markets. Likewise, new digital infrastructure has empowered entrepreneurs across the archipelago to participate in a single, unified economy. This strategy has made connectivity the backbone of inclusion, effectively linking opportunity to the places where it is most needed.

Equally important has been the deepening of Indonesia’s domestic capital markets. Two decades ago, foreign capital funded most of our development. Today, a robust ecosystem of domestic pension funds, sovereign vehicles, and retail investors provides the essential liquidity that fuels our growth. This shift has built remarkable resilience, insulating our economy from external shocks and giving Indonesians a greater stake in their own nation’s success.

Moreover, these reforms have expanded Indonesia’s role in the global economy. At a time of widespread uncertainty, our commitment to fiscal discipline and political stability has made us a reliable partner. This reliability is anchored in our guiding principle of being “free and active,” which allows us to collaborate with all partners without being constrained by any one group. In today’s landscape, that flexibility is one of Indonesia’s greatest strategic assets.

Yet such an evolution leaves critical unfinished business. Infrastructure outside Java still lags, driving up logistics costs and constraining regional productivity. Regulatory fragmentation between central and local authorities continues to challenge investors. Economic disparities persist, particularly in rural and eastern provinces, where access to education, healthcare, and digital networks remains uneven. Finally, our young workforce is entering the labor market faster than formal sectors can absorb it, highlighting the urgent need to accelerate industrial diversification and innovation.

These gaps are a stark reminder that growth is not self-sustaining; it demands constant adaptation. The next phase of reform must therefore pivot to execution and inclusion, ensuring the benefits of progress extend far beyond the nation’s centers of power. Indonesia has already proven its capacity for resilience. The task now is to translate that resilience into broad-based prosperity—building a foundation strong enough to secure the opportunities that lie ahead.

These are not the scattershot bets of 25 years ago. Today’s investments are deliberate, strategic, and anchored in Indonesia’s unique strengths. This new approach is also driven by a new motivation. The first chapter of my career was about rebuilding and creating wealth; this next chapter is about sharing it. The goal is to ensure that Indonesian investors, entrepreneurs, and workers are active participants in shaping their nation’s future, not mere observers on the sidelines. Our responsibility is to channel capital into the sectors that create jobs, improve living standards, and strengthen the country’s long-term competitiveness.

Indonesia now has the chance to redefine its role in the global economy as a confident hub for sustainable, inclusive, and technologically advanced growth. The crisis of the past taught us how to rebuild; the challenges of today will teach us how to refine, focus, and lead. With this foundation in place, the important question is no longer whether we can grow, but how. We must now decide where to direct our energy and capital to secure this future.

 

The Three Pillars of Indonesia’s Next Growth Phase

Having rebuilt its foundations, Indonesia’s next wave of growth will come from sectors where our competitive advantages and national responsibilities intersect. First, green investment speaks to Indonesia’s unique comparative advantage. With the world racing toward net zero, our capacity for carbon capture, forest conservation, and renewable energy production can turn environmental protection into a powerful economic engine. Second, healthcare reflects a dual imperative, both moral and economic. The goal is to improve access for all citizens, strengthen national resilience, and build domestic capability to reduce reliance on imports. Third, AI and digital transformation represent the frontier of productivity. This is where Indonesia’s creative, adaptive youth can excel, provided we build the right ecosystem and foundations. Each of these is a step toward a more resilient and inclusive economy.

The global transition toward low-carbon growth is redrawing investment maps, and Indonesia is emerging as a key destination. As U.S. investors scale back their emerging market exposure, competition for green assets has eased, creating more favorable valuations. This new environment rewards countries that possess both natural capital and credible governance. Indonesia stands out on both fronts.

Indonesia’s carbon capture potential is immense. Its peatlands, mangroves, and tropical forests together hold an estimated storage capacity of over 100 billion tons of CO₂, according to PwC and the Coordinating Ministry for Maritime Affairs. The government is building a framework to capitalize on this, projecting a $10 billion domestic carbon market by 2030, supported by the national carbon exchange launched in 2023. Beyond carbon credits, the energy-efficiency sector—valued at roughly $18 billion—offers tangible, near-term gains in transport, manufacturing, and urban buildings. These are not distant ambitions; they are active markets already attracting Indonesian and regional investors.

The priority now is to strengthen monitoring, reporting, and verification (MRV) capabilities, ensuring Indonesian carbon credits can compete internationally. Domestic firms are already expanding into these certifications and testing services, a key step to keep value creation within the country’s borders. At the same time, the $20 billion Just Energy Transition Partnership is actively financing new renewable capacity and accelerating the decarbonization of our grid.

Indonesia’s green opportunity hinges on execution. The task is to link credible governance, measurable outcomes, and regional capital. By developing trust in our systems, we will successfully convert our immense natural wealth into a durable, investable advantage.

If green investment is how we protect the planet, healthcare is how we protect our people. Together, they form the twin anchors of a modern economy—one that values sustainability and human development in equal measure.

Healthcare, to me, is the most human expression of development, as it reflects whether progress truly reaches the people. Over the past decade, Indonesia has expanded universal health coverage to hundreds of millions, unlocking demand on a national scale. Yet capacity still trails aspiration. We have only 1.17 beds per thousand people across roughly 2,900 hospitals. The fact that over 60 percent of these are privately run is clear evidence of a new reality: public ambition is now fundamentally dependent on private investment to succeed.

Each year, over one million Indonesians travel abroad for medical treatment, spending billions of dollars in neighboring countries. This outflow is not a failure; it is a massive market opportunity. That capital flight represents a clear demand for trusted domestic healthcare, modern hospitals in second-tier cities, and advanced diagnostic centers that meet international standards. Analysts estimate Indonesia will need $10 to 16 billion in new health-infrastructure investment every year through 2030—capital that is poised to generate immense financial and social returns.

At the same time, our middle class—a demographic now exceeding 50 million people—is reshaping expectations. This rising group is ready to pay for quality, choice, and continuity of care. The next wave of investment will come from those who can bridge the gap between affordability and excellence—requiring local entrepreneurs, global health operators, and impact-minded investors to work together. When we invest in healthcare, we are not just building hospitals; we are strengthening trust, confidence, and human capital, which form the foundations of long-term prosperity.

As healthcare modernizes, a parallel transformation is unfolding in technology—one that will define not only how we treat people, but also how we work, learn, and compete. This emerging digital capability is the essential bridge, linking the physical and human investments that together underpin our future growth.

The next decade of progress will be driven by data, not factories. Artificial intelligence is the new infrastructure of competitiveness, and Indonesia has only just begun to build it. We have one of the world’s most digitally connected populations and a fast-learning workforce, yet we remain underutilized terrain for global AI leaders who still look first to Tokyo, Seoul, or Singapore. That gap is Indonesia’s opening.

According to IBM, only one in four Indonesian companies has adopted AI, held back not by imagination but by clear gaps in infrastructure, security, and talent. This is precisely where investment matters most: data centers, cloud capacity, and ethical frameworks that enable local firms to scale safely. If we bridge these gaps, global analysts estimate AI could add up to $366 billion to Indonesia’s economy by 2030—an impact that rivals our entire manufacturing sector.

The opportunity is not to import algorithms, but to build our own domestic capability. When we equip Indonesian engineers, doctors, and small businesses with AI tools, we are not replacing human judgment; we are amplifying it. In so doing, we build an economy defined not by extraction or assembly, but by intelligence. Together, green growth, better healthcare, and this digital revolution will mark the next phase of Indonesia’s story—an economy that grows not just in size, but in sophistication and purpose. Yet even as new sectors drive our growth, the broader environment in which we invest is shaped by global rivalry.

 

The Importance of Neutrality

Every generation faces a tension between power and prudence. Today, that tension is defined by the rivalry between the United States and China. These two economies, accounting for over a third of global GDP, are now locked in a competition that shapes all aspects of trade, technology, and capital flows. The result is profound uncertainty. Investors are re-evaluating supply chains, governments are recalibrating industrial policies, and the entire economic map of the world is being redrawn.

I have witnessed this uncertainty up close. When I meet business leaders from New York, Tokyo, or Shenzhen, they all echo the same shift. The question is no longer where the next factory should be; it is which side of the geopolitical divide it will sit on. Tariffs, export controls, and data regulations have fractured once-seamless supply chains into fragile corridors. This is not just anecdotal. The IMF reported that global trade growth in 2024 fell to its lowest level in more than two decades, with a third of multinational firms diversifying away from China. Technological decoupling, once a theoretical concept, is now a reality across semiconductors, critical minerals, and AI systems.

For emerging markets, this rivalry cuts both ways, bringing volatility as well as choice. Nations that take sides risk dependency; those that remain open can turn great-power competition into capital. Indonesia has chosen the latter. Our foreign policy is guided by what we call “free and active”—free from domination, active in cooperation. This is not an abstract doctrine; it is a deliberate economic strategy. Neutrality allows us to trade with Beijing and invest with Washington, without being constrained by either.

Such a “free and active” stance has made Indonesia a natural hub for diversification. As global firms look to “de-risk” rather than decouple entirely, they seek reliable partners—countries that combine political stability with access to large markets. Indonesia offers both. We sit at the heart of ASEAN, a region the World Bank projects will grow by nearly 5 percent annually over the next five years. Our 270 million people form the largest consumer base in Southeast Asia, and our prudent fiscal management through recent global shocks has preserved investor confidence when others faltered.

The evidence for this strategy is already in the numbers. In 2024, foreign direct investment into Indonesia reached a record $47 billion, with notable inflows from the United States, Japan, South Korea, and Singapore. This capital is flowing directly into supply-chain diversification—placing us in EV batteries, semiconductors, and critical minerals on the map for global manufacturers. Our neutral posture is the key, creating an environment where an American tech firm and a Chinese EV producer can both build facilities here, sometimes within the same industrial park.

Neutrality does not mean passivity; it is an active strategy that demands diplomacy, discipline, and consistency. It means having the strength to say no when cooperation threatens sovereignty, and the wisdom to say yes when it advances shared prosperity. It requires balancing autonomy with engagement. I often describe Indonesia’s role as a “bridge builder”—not between East and West, but between ambition and trust. In a fractured world, investors value predictability. Neutrality is predictability. It lowers geopolitical risk, anchors long-term planning, and signals that rules, not rivalries, will guide our partnerships.

This approach also strengthens our multilateral tendencies. As a member of the G20 and chair of ASEAN in 2023, Indonesia demonstrated that developing economies can shape, not just absorb, the global agenda. On issues like the energy transition, digital governance, and sustainable finance, we strive to be a forum where all sides can participate. In an increasingly polarized world, there is a greater premium on countries that can successfully build consensus.

Of course, neutrality is not without its challenges. It demands constant adjustments as global alignments shift. It also requires a deep, ongoing commitment to building institutional capacity—from transparent regulations and credible dispute-resolution mechanisms at home to skilled diplomacy abroad. Yet it is precisely this discipline that reinforces our attractiveness as an investment destination. Investors do not come to Indonesia because we are loud; they come because we are steady.

Looking ahead, Indonesia’s neutrality is not a defensive posture; it is a growth strategy. As capital, data, and ideas fragment, the ability to remain open, pragmatic, and principled will be what defines economic resilience. The world’s great powers may compete for influence, but Indonesia competes for value creation. Our neutrality is not indifference; it is confidence—confidence that our future will be built not on choosing sides, but on choosing stability, cooperation, and shared progress.

 

Turning Opportunity into Shared Prosperity

Progress has little meaning if it leaves people behind. Economic growth must lift the quality of life, not just statistics. As investors, policymakers, and entrepreneurs, we share a responsibility to ensure that prosperity is both inclusive and sustainable. These are the foundations of resilience.

Indonesia’s next 25 years will not be about chasing scale, but about leading with intention. Our task is to refine, to focus, and to lead in turning opportunity into shared prosperity. We must prove that growth and fairness can—and must—advance together. I have always believed that progress built on inclusion is the only kind that endures. If we hold to that belief, Indonesia can offer the world not just another story of rapid growth, but a powerful example of what responsible growth looks like.

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