Keeping the Wealth at Home: The Story Behind Indonesia’s Economic Shift

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If you read the mainstream financial news, Indonesia’s investment climate looks like a roller coaster.

Big announcements of billions in Foreign Direct Investment (FDI) make headlines, with new factories, tourism projects, and business hubs reinforcing the image of a country primed for long‑term growth.

Yet not all of this “foreign” money is truly foreign. Economists call it round‑tripping, when Indonesian funds leave for offshore hubs like Singapore or Hong Kong, then return disguised as foreign investment.

Studies suggest more than 15% of FDI may be local money taking this route. While common and not necessarily harmful, it raises an important question: how much of Indonesia’s wealth is really staying at home?


Bali: A Smaller Example of a Big Trend

In Bali, many new property projects and hotels are set up through holding companies in Singapore. Some are genuinely foreign‑owned, but others are funded by Indonesian money using international structures.

For years this was seen as normal global business practice, yet it leaves Bali facing the same challenge as the rest of Indonesia: how to attract outside investors while ensuring the wealth generated stays in the local economy.


The Story No One Wants to Talk About

At the same time, Indonesia is grappling with capital flight — money leaving the country quickly. Since early 2026, foreign investors have pulled billions from stocks and government bonds, driving foreign ownership of bonds to historic lows and pressuring the Rupiah.

Critics blame policy shifts and heavy state involvement, while supporters of President Prabowo argue it’s part of reclaiming national resources. The reality likely lies somewhere in between, highlighting the delicate balance between global markets and domestic priorities.


Why Controlling Resources Matters

A big part of this debate is about President Prabowo’s push to have the government tightly watch Indonesia’s most valuable resources.

The government believes that for years, Indonesia lost massive amounts of money because exports weren’t checked properly, values were under-reported, and wealth leaked out. New rules aim to put the government in charge of tracking major exports like coal, palm oil, and minerals to make things transparent and collect fair taxes.

▪️ Critics see this as the government interfering too much in business.

▪️ Supporters see it as economic sovereignty—the country finally owning its own future.

Interestingly, Indonesia is not alone in doing this. Many successful countries do the exact same thing:

▪️ Norway keeps a strict eye on its oil.
▪️ Saudi Arabia does the same.
▪️ Botswana carefully manages its diamonds.
▪️ Chile is highly involved in its copper industry.

Indonesia is moving toward a system where national resources are not just treated as private goods to be sold off, but as tools to build the nation.


Indonesia’s Political and Economic Crossroads

What makes today’s situation so striking is that it’s no longer just an economic debate — it has become deeply political. Students, opposition parties, business groups, and foreign investors all see Indonesia through different lenses.

Some worry the government is taking too many risks, while others believe the country is finally reclaiming control of its own destiny.

Headlines may look unsettling from Bali, Jakarta, Singapore, or Sydney, but history shows Indonesia has weathered similar storms before — from the Reformasi era in the late 90s to President Jokowi’s raw mineral export ban — and each time, the nation kept moving forward.

The real challenge now goes beyond short‑term market swings. Financial markets are emotional and quick to react, but the bigger question is whether Indonesia can build a system that keeps more wealth at home while still welcoming international investors.

That’s the balance President Prabowo is trying to strike: stopping capital flight, protecting strategic resources, creating jobs, and building an economy that stands firmly on its own.

Markets may resist, politicians may clash, and investors may hesitate, but the underlying issue is universal — how to stay open to the world while ensuring the benefits of growth remain in the country. This will likely define Indonesia’s economic path for the next decade.

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Andrzej Barski

Director of Seven Stones Indonesia

Andrzej is Co-owner/ Founder and Director of Seven Stones Indonesia. He was born in the UK to Polish parents and has been living in Indonesia for more than 33-years. He is a skilled writer, trainer and marketer with a deep understanding of Indonesia and its many cultures after spending many years travelling across the archipelago from North Sumatra to Irian Jaya.

His experience covers Marketing, Branding, Advertising, Publishing, Real Estate and Training for 5-Star Hotels and Resorts in Bali and Jakarta, which has given him a passion for the customer experience. He’s a published author and a regular contributor to local and regional publications. His interests include conservation, eco-conscious initiatives, spirituality and motorcycles. Andrzej speaks English and Indonesian.

Terje H. Nilsen

Director of Seven Stones Indonesia

Terje is from Norway and has been living in Indonesia for over 20-years. He first came to Indonesia as a child and after earning his degree in Business Administration from the University of Agder in Norway, he moved to Indonesia in 1993, where he has worked in leading positions in education and the fitness/ wellness industries all over Indonesia including Jakarta, Banjarmasin, Medan and Bali.

He was Co-owner and CEO of the Paradise Property Group for 10-years and led the company to great success. He is now Co-owner/ Founder and Director of Seven Stones Indonesia offering market entry services for foreign investors, legal advice, sourcing of investments and in particular real estate investments. He has a soft spot for eco-friendly and socially sustainable projects and investments, while his personal business strengths are in property law, tourism trends, macroeconomics, Indonesian government and regulations. His personal interests are in sport, adventure, history and spiritual experiences.

Terje’s leadership, drive and knowledge are recognised across many industries and his unrivalled network of high level contacts in government and business spans the globe. He believes you do good and do well but always in that order. Terje speaks English, Indonesian and Norwegian.