Executive Summary of the Makes Indonesia Economic & Strategic Update 2025: Navigating Challenges in a Borderless Era
This Executive Summary captures the core themes and key insights from the Makes Indonesia Economic & Strategic Update 2025 convened by Makes & Partners Law Firm on 14 May 2025. The event gathered leading policymakers, investors, and business leaders to discuss how Indonesia can respond to global economic and geopolitical uncertainty. The forum remained optimistic about Indonesia’s future, recognizing the country’s unique position as a stable democracy in a turbulent global landscape. While many regions face conflict and uncertainty, Indonesia continues to maintain domestic stability and peace. At the same time, the country is actively mobilizing capital through Danantara Indonesia to invest in strategic sectors.
Given the richness of the discussions and the importance of the multi-stakeholder insights unlocked during the forum, we are pleased to share this summary of key focal points for your benefit as our valued client, fellow professional, and colleague.
I. Strategic Imperatives for Growth, Resilience and Regional Leadership
In the opening session, three prominent voices – Mr. Hashim S. Djojohadikusumo, Mr. Pandu Patria Sjahrir, and Mr. Dilhan Pillay Sandrasegara – outlined strategies on how Indonesia can balance its ambitious economic vision with environmental stewardship, drive strategic investments through the newly consolidated Danantara Indonesia, and strengthen its role as a regional anchor for sustainable development and capital flow.
A. Indonesia’s Role in the Climate Agenda
Mr. Djojohadikusumo began by reaffirming the Indonesian government’s bold target of achieving 8% (eight per cent) GDP growth, acknowledging that while many consider the goal overambitious, he remains firmly optimistic, citing the country’s rich natural resources and expanding economic base. In this matter, he underscored that economic growth must not come at the cost of environmental degradation. He also unveiled a 15-year plan focusing on renewable energy (75 GW), nuclear (10 GW), and gas, backed by regular capital injections into Danantara Indonesia.
In line with these ambitions, he also stressed the importance of nature-based solutions, including the rehabilitation of forests, mangroves, and grasslands, as well as carbon capture initiatives to curb emissions. Special attention was given to conserving timber, palm sugar, and fruit trees, not merely for their economic value but for their critical role in maintaining biodiversity and ecological balance. As part of this, Danantara Indonesia will work with global investors to co-finance green projects.
Outside the energy and environment sector, he also mentioned a new nutrition program offering free healthy meals for schoolchildren as part of a human development agenda. Finally, he underscored governance, transparency, and accountability as cornerstones of sustainable growth – balancing robust economic targets with ecological and human-centered imperatives.
B. Strategic Realignment – The Case of Danantara Indonesia
Representing Danantara Indonesia, Mr. Sjahrir then laid out the strategic direction of Danantara Indonesia following its consolidation with state-owned enterprises in late March 2025. As a dual-structured institution comprising Operating Holding and Investment Holding, Danantara consolidates state-owned assets to build a steady capital base, while also investing in key national priorities. Describing Danantara Indonesia as “the first large-scale human capital exercise” of its kind in the country, its foundational role includes strengthening Indonesia’s institutional and economic resilience, particularly with a focus that extends beyond capital deployment and instead includes unlocking efficiency, driving national productivity, and creating sustainable value.
While acknowledging the success and strength of banks as regional champions, he noted that these institutions now require strategic support to scale, innovate, and expand their reach. To this end, Danantara Indonesia’s investment priorities include public facilities, healthcare, and state industrial assets. Mr. Pandu emphasized that capital investments must bring expertise and innovation. Public equity markets must also grow and deepen to recycle capital and widen national wealth. Attracting foreign investment, he noted, depends on regulatory certainty, skills development, and strong connectivity across regions and global markets.
Connectivity that is both within the nation and across global networks will be key, as it fosters mutual understanding, builds trust, and ultimately attracts capital. With this approach, Danantara Indonesia aims to ensure that Indonesia is not just seen as a participant in regional growth, but as a pivotal source of global capital relevance.
C. ASEAN Investment Outlook and Lessons From Temasek
Mr. Sandrasegara, as the Executive Director and Chief Executive Officer of Temasek Holdings, shared strategic reflections drawn from Temasek Holdings’ long-standing role as Singapore’s sovereign wealth fund, emphasizing that Temasek’s investment philosophy is firmly anchored in addressing long-term structural shifts and has been actualized through a portfolio of investment into transformative sectors such as energy, food systems, waste management – underscoring the need for bold, forward-looking capital allocation. In achieving this, he highlighted the importance of strong financial systems, coordinated policy frameworks, and regional investment partnerships as key enablers for unlocking greater capital flows across ASEAN.
He also noted that Indonesia, as the largest economy in Southeast Asia, plays a pivotal role in the region’s prosperity. Its success will generate positive spillover effects throughout Southeast Asia’s economic corridor. Realizing this potential may depend on strengthening cooperation and collaboration across institutions, advancing digital infrastructure, and effectively managing emerging technologies like artificial intelligence to support inclusive and stable growth.
Drawing from Temasek’s own agility in deploying capital across innovation-driven sectors, he encouraged Indonesia to strengthen its policy narrative, foster institutional alignment, and build cross-border networks that collectively shape Southeast Asia as a resilient and competitive investment ecosystem.
II. Strengthening Institutions, Markets, and Human Capital for a Future-Ready Indonesia
In the second session, speakers from key national institutions – Mr. Iman Rachman, Mr. Pahala Nugraha Mansury, and Mr. Antonius Santoso – examined the evolving role of Indonesia’s capital markets, trade resilience strategies, and productivity as a core driver of inclusive growth. From regulatory agility and market innovation to workforce development and trade diversification, this session emphasized that the future of Indonesia’s economy lies in the strength of its systems, the adaptability of its institutions, and the empowerment of its people.
D. Indonesia Stock Exchange and Global Standards
Mr. Iman Rachman, the President Director of the Indonesia Stock Exchange (“IDX”), provided timely insights into Indonesia’s capital market trajectory amidst ongoing global financial turbulences such as trade tensions and high interest rate policies. He acknowledged that despite short-term volatility, Indonesia’s robust fundamentals and the strong financial performance of various listed companies continue to attract international investor attention. Underscoring Indonesia’s active role in the International Organization of Securities Commissions (IOSCO) and other international regulatory platforms, he highlighted how these engagements are informing IDX’s forward-looking policies.
In addition to transparency and efficiency as the cornerstone of IDX’s strategy going forward, several initiatives are being developed in coordination with the Financial Services Authority (OJK) to bolster the capital market’s role, including to streamline and accelerate IPO and rights issue processes, expand alternative financial instruments, and foster a more robust pipeline of high-quality listings.
His closing message to investors: remain vigilant and confident – Indonesia’s capital markets are poised for deeper participation and strategic alignment with national economic goals.
E. Private Sector Opportunities From the Perspective of Indonesian Chamber of Commerce and Industry
Representing the Indonesian Chamber of Commerce and Industry, Mr. Pahala Nugraha Mansury focused on how Indonesia’s real sector must recalibrate its strategies to thrive amidst global disruptions.
With Indonesia currently dependent on large-scale imports, he emphasized that the country must view today’s global volatility as a wake-up call to accelerate efforts toward self-reliance. He noted that bureaucracy and unclear regulations are major barriers to investment in sectors like energy. As such, strengthening local production and financing tools is essential; therefore, he urged the expansion of financial products and stronger credit export institutions to empower local businesses to compete in global markets.
While Indonesia has shown relative insulation from the global growth slowdown, it cannot afford complacency. Encouragingly, he pointed to opportunities for renewed trade diplomacy, the deepening ties with the European Union and other strategic partners, and doubling down on its core strengths – namely green economy, agriculture and food security, and blue economy.
F. Productivity as a Catalyst
Drawing from McKinsey & Company’s latest research, Mr. Antonius Santoso shared a compelling forward-looking analysis of how Indonesia can transform into a high-income nation by 2045 will depend heavily on productivity and employment growth – particularly through capital deepening and the scaling of medium-to-large enterprises.
Examining from the developmental paths of various countries, including China, Poland, South Korea, and Chile, the findings reveal that Indonesia can follow by strategically investing in five key forms of capital: financial, human, institutional, infrastructural, and entrepreneurial. Accordingly, Indonesia must improve access to long-term capital, upgrade education and skills, simplify regulations, invest in critical infrastructure, and support entrepreneurs.
In conclusion, he stressed that closing Indonesia’s productivity gap is not merely an economic ambition, but a national imperative. It requires coordination between government, industry, and society to shape a future that is not only prosperous – but inclusive and resilient.
We hope this Executive Summary offers valuable takeaways. For further discussion and information on the above or any other matters, please reach out to us at strategic.tactical.solutions@makeslaw.com.
As always, Makes & Partners remains committed to being your strategic partner in navigating complex challenges with foresight, clarity, and impact.
With best personal regards,
Makes & Partners Law Firm