Indonesia has unveiled a $28 billion plan to build international financial centers in Jakarta and Bali, as President Prabowo Subianto moves to position Southeast Asia’s largest economy as a global rival to Singapore and Hong Kong.
Prabowo announced the initiative on August 14, designating Jakarta and Bali as the initial locations for what the government calls International Financial Centers (IFCs). The plan aims to transform Indonesia from a recipient of foreign investment into a hub where investment transactions, treasury operations, and fund management activities are conducted on Indonesian soil.
For Bali, the centerpiece of the project is the KEK Kura Kura Special Economic Zone in Serangan, Denpasar. Originally established as a tourism and creative industries zone on a 498-hectare area, the zone is being reimagined as a base for international financial services. Authorities expect the Bali hub alone to attract approximately Rp104.4 trillion, equivalent to roughly $6 billion, in investment.
A Strategic Pivot for Indonesia’s Economy
The announcement reflects Jakarta’s broader effort to capture greater value from global investment flows at a time of intensifying regional competition. Southeast Asian economies are vying for capital displaced by trade tensions between the United States and China, supply chain diversification, and the growing pool of institutional money seeking new markets.
Indonesia, with a population of over 270 million and a GDP exceeding $1.3 trillion, has long been viewed as an underweight destination for financial services despite its economic scale. While Jakarta serves as the headquarters for ASEAN’s largest economy, much of the region’s financial intermediation still flows through Singapore, which processes a disproportionate share of investment capital relative to its size.
The Prabowo government’s plan signals a determination to change that equation. By creating regulatory sandboxes, offering tax incentives, and building purpose-built infrastructure for global financial firms, Jakarta hopes to anchor more of the investment cycle domestically.
Bali’s Role as a Lifestyle Finance Hub
The choice of Bali as a secondary financial center is deliberate. The island’s international recognition as a tourism destination gives it a built-in advantage in attracting global talent and business communities, according to government officials. The vision positions Bali as a lifestyle finance hub where wealth managers, fintech entrepreneurs, and family offices can operate in a setting that blends work and leisure.
Development near Bali’s Ngurah Rai airport is already underway, including a nearly five-hectare modern retail complex on reclaimed land that was formerly a fishing village. The facility features 130 stores offering luxury brands and is designed to signal the island’s readiness for high-end commercial activity beyond tourism.
The government is preparing a package of incentives for both locations, though specific details on tax breaks, regulatory exemptions, and visa provisions have not yet been finalized. Investors have emphasized the need for legal certainty before committing capital, particularly given Indonesia’s complex regulatory environment and frequent policy shifts.
Competition With Singapore and Hong Kong
The initiative positions Indonesia directly in competition with established financial centers in the region. Singapore processes more than $4 trillion in annual fund flows and serves as the primary gateway for institutional capital entering Asia. Hong Kong, despite recent political turbulence, remains the dominant hub for China-related investment.
For Indonesia to compete, analysts say it will need to deliver on several fronts: a transparent and predictable regulatory framework, world-class digital infrastructure, reliable rule of law for commercial disputes, and a deep pool of multilingual financial professionals. The country’s recent push to strengthen payment systems for digital growth and expand 5G infrastructure illustrates the government’s awareness of these requirements.
Prabowo’s announcement also aligns with Indonesia’s broader digital and financial modernization agenda. Recent initiatives aimed at cultivating digital talent, advancing AI governance, and strengthening economic resilience signal a comprehensive approach to building the technological foundations required for modern financial services.
Investor Caution Persists
Despite the ambition, skepticism remains. Indonesia’s track record on large infrastructure projects is mixed, with several previous special economic zones failing to attract significant private investment. The country’s legal framework for financial services remains fragmented, and bureaucratic hurdles continue to deter foreign firms.
Still, the sheer scale of the Indonesian market and its growing middle class make it difficult for global investors to ignore. If the government can deliver on the legal and regulatory reforms that financial firms are demanding, the $28 billion plan could mark a significant shift in the balance of financial power in Southeast Asia.
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