Category: Business Review

Business Climate, Entrepreneurship, Regional Industries

  • ASEAN Summit: Beyond Borders and Hopes for Fair Inclusivity

    ASEAN Summit: Beyond Borders and Hopes for Fair Inclusivity

    In a time when the global order is increasingly shaped by rivalry, protectionism, and digital divides, the ASEAN Summit stands as one of the few platforms where developing nations gather not merely to defend their interests but to design their shared future. The 46th ASEAN Summit in Kuala Lumpur, Malaysia, is more than a diplomatic meeting. The summit is a reminder that Southeast Asia’s collective voice matters. It symbolizes how unity among developing nations can transcend historical boundaries, nurture inclusivity, and build a fairer regional community.

    ASEAN was never conceived as a power bloc but as a bridge between economies, between cultures, and between stages of development. Unlike many international forums dominated by major powers, ASEAN’s strength lies in its diversity. Ten countries, and to be eleven with Timor-Leste, bring unique histories, religions, and governance models under a single umbrella. This diversity, often seen as a challenge, has become ASEAN’s greatest asset. The diversity shows that peace and cooperation among developing states are not only possible but productive.

    For Southeast Asia, the concept of fair inclusivity goes beyond economics. It touches on the right of each nation, large or small, to have a voice in shaping the regional agenda. The inclusion of Timor-Leste in 2025 embodies this principle. As the region’s youngest and smallest state, its admission reflects ASEAN’s moral commitment to solidarity and development over mere strategic convenience. Inclusivity, in this context, is not charity; it is the foundation of sustainable peace and collective progress.

    The summit’s theme, Inclusivity and Sustainability, reflects the dual challenge of the 21st century: growth that benefits all and development that endures. ASEAN economies, although varied in size and structure, share similar aspirations, including modernization, digital readiness, and equitable prosperity. By fostering a shared regional identity, ASEAN helps member states collectively resist the widening global inequality gap that leaves developing nations perpetually behind.

    Strategically, ASEAN sits at one of the most vital crossroads in the world, between the Indian and Pacific Oceans, between East and West, between tradition and innovation. Its geography makes it an essential hub for trade, logistics, and supply chain resilience. But more importantly, its moral geography, its position as a neutral, peace-oriented bloc, makes it a rare model of cooperation in a fragmented world. ASEAN’s balancing act between global powers offers lessons on how small and medium states can retain agency in international affairs.

    The economic dimension of the ASEAN Summit cannot be overlooked. With a combined population exceeding 680 million and a GDP surpassing US$4.3 trillion, ASEAN is projected to become the world’s fourth-largest economy by 2030. Yet its real power lies not in its statistics but in its philosophy: growth through cooperation rather than domination. Initiatives like the ASEAN Economic Community (AEC), the Regional Comprehensive Economic Partnership (RCEP), and the ASEAN Digital Economy Framework Agreement represent steps toward that vision.

    However, inclusivity must be tested in practice, not just declared in speeches. The region’s disparities in income, digital access, and institutional capacity remain stark. Some nations are global manufacturing hubs, while others struggle with poverty and instability. The ASEAN Summit, therefore, serves as a platform for mutual learning, where successful models of governance, education, and technology can be shared and adapted across borders. The collective aim is not uniformity but shared advancement.

    Beyond economics, ASEAN carries a profound social responsibility. The region’s young population, half under the age of 35, faces an uncertain global future marked by automation and climate disruption. By prioritizing human capital, technical education, and sustainable industries, ASEAN can chart a development path that empowers its youth while respecting local identities. This approach reflects an emerging paradigm: development rooted in culture, ethics, and community.

    In addressing challenges such as the Myanmar crisis or transboundary haze pollution, ASEAN’s diplomacy emphasizes consensus and dialogue. Though sometimes criticized for its slow pace, this model prioritizes stability over coercion. It recognizes that transformation in developing societies must come through gradual institutional building, not external pressure. The ASEAN Way, based on mutual respect and non-interference, may seem cautious, but it preserves trust in a region historically scarred by colonial divisions.

    The spirit of beyond borders is not merely geographical. It signifies the psychological shift from narrow nationalism to regional empathy. When ASEAN leaders speak of connectivity, they mean more than roads or fiber cables; they speak of people’s hearts, students, workers, and entrepreneurs, linking across the archipelago and the peninsula, across faiths and languages. Every summit reaffirms that the prosperity of one nation enhances the stability of all.

    The digital economy has become ASEAN’s new frontier. With initiatives on smart cities, fintech regulation, and cross-border data flow, the region is transforming from a production zone into an innovation space. Yet digital transformation must be inclusive, bridging the rural-urban gap and empowering MSMEs. The summit discussions reflect this awareness, as leaders increasingly view technology not as an elite tool but as a public good.

    Sustainability is another pillar of the 2025 agenda. From green energy transitions to climate-resilient agriculture, ASEAN’s environmental initiatives signify a growing consciousness of collective responsibility. Developing nations, often the first to suffer climate impacts, now position themselves as proactive actors in global sustainability. The region’s renewable energy potential, from geothermal in Indonesia to solar in Malaysia, offers both economic and ecological hope.

    Beyond its institutional role, ASEAN represents a moral experiment in how developing nations can govern themselves through shared ethics. It challenges the notion that progress must follow Western models. Instead, it offers a civilizational narrative rooted in Asian values, respect, harmony, and community-driven development. These values give ASEAN’s inclusivity not just an economic but also a cultural legitimacy.

    As global politics tilt toward polarization, ASEAN’s quiet diplomacy provides an alternative vision of coexistence. Its ability to engage both the United States and China without becoming a pawn illustrates the value of collective neutrality. The bloc’s centrality in regional dialogues, from the East Asia Summit to ASEAN+3, ensures that Southeast Asian perspectives remain integral to the global agenda.

    Ultimately, the ASEAN Summit is a mirror of the region’s aspirations: a fairer, more balanced future where every nation, regardless of size, contributes to the mosaic of progress. Beyond borders means daring to imagine a community not confined by geography but bound by shared destiny. For Southeast Asia and other developing regions, ASEAN’s story is not merely just about survival. It is about the dignity of shaping one’s own future in a world too often defined by others.

  • The New Era of Garuda-Danantara Partnership

    The New Era of Garuda-Danantara Partnership

    In a defining moment for Indonesia’s economic trajectory, the government has initiated the Garuda–Danantara investment, a strategic move designed to reignite the nation’s industrial economy post-covid revival through government link company (GLC/BUMN). Representing resilience and national pride, the Garuda–Danantara partnership integrates the strength of state-owned enterprises, investment body, and investors frameworks under one unified vision: to transform Indonesia into a modern, competitive, and sustainable industrial powerhouse.

    President Prabowo Subianto’s administration has positioned the Danantara initiative as a central pillar of its bold vision to transform the economy and long-term growth strategy. The plan emphasizes BUMN management approach, revitalization, and innovation as the drivers of national economy progress. Beyond accelerating investment expansion, it seeks to restore Indonesia’s economic sovereignty after years of structural dependence on investment and capital crisis.

    Functioning as a hybrid national investment model, Danantara operates under a coordinated structure, part state-led, part market-driven, enabling capital to flow efficiently into productive and emerging industries such as defense, manufacturing, renewable energy, logistics, and digital infrastructure. Danantara-BUMN framework represents “a new investment ecosystem, not merely a funding scheme.”

    Through this national investment body, the government aims to promote strategic autonomy by accelerating domestic productivity of key industrial economic systems. This approach supports Indonesia’s ambition to reduce the BUMN deficit, boost productivity, and strengthen domestic value creation across priority sectors.

    Amid the national optimism, Garuda Indonesia, the country’s flagship airlinem remains a critical test case for the success of the Danantara investment framework. After years of financial turbulence and negative equity exceeding Rp20 trillion, Garuda’s recovery has been a matter of national concern. The company, once a proud symbol of Indonesian excellence, has been constrained by high debt servicing costs, limited cash flow, and rising operational expenses following the pandemic downturn.

    Under the new framework, Danantara investment stepped in as a strategic investor, injecting Rp30 trillion into Garuda through a private capital participation scheme equivalent increase to approximately 93.5 percent ownership . This infusion effectively transforms Garuda’s balance sheet, turning its equity position from negative to positive territory for the first time in nearly a decade. The restructuring ensures that Garuda not only stabilizes financially but also regains access to credit facilities and international partnerships critical for global operations.

    This investment marks more than a financial turnaround; it represents a renewal of national confidence in Garuda’s role as Indonesia’s aviation ambassador. With its excellent service quality, strong safety record, and global brand recognition, Garuda Indonesia is once again positioned for sustainable growth. The Danantara investment thus stands as a decisive and forward-looking move, aligning financial health with national strategic interests and reaffirming the government’s commitment to revitalizing vital state enterprises.

    Economic observers and business associations have expressed optimism that this initiative will shift Indonesia’s economic narrative, from reliance on resource extraction to high-value industrial economic production. The IHSG’s market recent turbulence shocks in early October underscores renewed market antusiam on Garuda stock which still on FCA (Full Call Auction) list. Furthermore, this initiative are worth to appraise.

    Ultimately, Garuda–Danantara stands as more than an investment initiative, it is a national economy transformation framework. With unified leadership, coherent planning, and disciplined execution, it can become the cornerstone of Indonesia’s long-term journey toward inclusive, resilient, and sustainable prosperity.

  • Why the U.S. Overlooks Indonesia’s QRIS, GPN, and TKDN: A Missed Opportunity Amid Inshoring and Tariff Shifts

    Why the U.S. Overlooks Indonesia’s QRIS, GPN, and TKDN: A Missed Opportunity Amid Inshoring and Tariff Shifts

    As the global economy undergoes significant transformations, Indonesia has emerged as a proactive player, implementing policies like QRIS (Quick Response Code Indonesian Standard), GPN (Gerbang Pembayaran Nasional), and TKDN (Tingkat Komponen Dalam Negeri) to bolster its digital infrastructure and domestic industries. These initiatives aim to enhance financial inclusion, secure payment systems, and promote local manufacturing. However, the United States appears to be overlooking these developments, potentially missing out on strategic economic opportunities in Southeast Asia’s largest economy.​

    Indonesia’s Strategic Economic Initiatives

    Indonesia’s government has been steadfast in its commitment to strengthening its domestic economy. The QRIS system, for instance, has revolutionized digital payments by standardizing QR codes across various platforms, facilitating seamless transactions for millions of users. Bank Indonesia reported that as of mid-2023, QRIS had been adopted by over 26.7 million merchants, with 91.4% being micro, small, and medium enterprises (MSMES).​

    Similarly, the GPN initiative aims to create a unified national payment gateway, reducing reliance on foreign payment networks and enhancing the security and efficiency of domestic transactions.​

    The TKDN policy mandates a certain percentage of local content in products and services, encouraging foreign companies to invest in local manufacturing. This policy has seen significant success, with companies like Pertamina, for example, achieving a 60% TKDN realisation in 2021, amounting to IDR 9.73 trillion.

    U.S. Hesitation and Missed Opportunities

    Despite these advancements, the U.S. has shown reluctance to engage with Indonesia’s economic policies. The American Chamber of Commerce in Indonesia and the U.S. Chamber of Commerce have expressed concerns over the TKDN regulations, viewing them as obstacles to investment. This perspective overlooks the potential benefits of integrating into Indonesia’s growing economy and the opportunities for collaboration in the technology and manufacturing sectors.​

    Moreover, the U.S.’s focus on reshoring and insourcing manufacturing, especially under the Trump administration’s tariff policies, has led to a more inward-looking economic approach. This shift may cause American companies to miss out on strategic partnerships and market access in countries like Indonesia, which are actively seeking to attract foreign investment and technology transfer.​

    Global Companies Embracing Indonesia’s Policies

    Contrastingly, other global players have recognized the potential in Indonesia’s policies. Apple Inc., for example, committed to a US$1 billion investment to establish a manufacturing plant in Indonesia after facing a ban on the iPhone 16 due to non-compliance with TKDN requirements. This move not only aligns with Indonesia’s local content policies but also secures Apple’s position in a rapidly growing market.​

    Such examples highlight the opportunities available for companies willing to adapt to Indonesia’s economic landscape. By investing in local manufacturing and complying with domestic policies, foreign companies can gain significant advantages in market access and consumer trust.​

    The Need for a Strategic U.S. Approach

    For the U.S. to maintain its economic influence in Southeast Asia, a strategic reassessment is necessary. Engaging with Indonesia’s initiatives like QRIS, GPN, and TKDN can open avenues for collaboration in digital infrastructure, fintech, and manufacturing. By aligning with Indonesia’s economic policies, the U.S. can foster stronger bilateral relations and tap into a burgeoning market.​

    Furthermore, supporting American companies in navigating Indonesia’s regulatory environment can enhance competitiveness and innovation. This approach requires a shift from viewing policies like TKDN as barriers to recognizing them as frameworks for mutual growth and partnership.

    Indonesia’s proactive economic policies present significant opportunities for international collaboration and investment. While the U.S. has been cautious, a more engaged and adaptive approach could yield substantial benefits. Recognizing and integrating with initiatives like QRIS, GPN, and TKDN can position the U.S. as a key partner in Indonesia’s economic development, fostering mutual prosperity in an increasingly interconnected global economy.

    References:

  • Abolishing Import Quotas: A Strategic Step Toward Affordable Prices in Indonesia

    Abolishing Import Quotas: A Strategic Step Toward Affordable Prices in Indonesia

    In recent days, President-elect Prabowo Subianto has made a bold statement that has stirred national discourse: the abolition of the import quota system. This proposal, while eliciting mixed reactions, deserves serious consideration as a strategic effort to reform the distribution and regulation of essential commodities. For a country like Indonesia, which has long grappled with stabilizing food prices and protecting household purchasing power, such a policy shift may offer significant potential.

    Indonesia’s current import quota system was designed to regulate the supply of crucial goods such as rice, sugar, garlic, beef, and other staples. In times of scarcity, the government authorizes limited import quotas to boost market supply. However, in practice, these quotas often fail to reduce prices. Despite the availability of imported goods, prices remain high. In some cases, quotas have even become tools of market manipulation by groups with exclusive access to import licenses.

    The core issue with the quota system lies in its exclusivity and lack of transparency. Only select importers are granted permits, creating an uncompetitive market. This situation paves the way for oligopolistic practices and, in some cases, cartel behaviour, where a small group of actors controls supply and pricing. As a result, consumers are forced to pay inflated prices, even though global market prices or basic production costs are much lower. The current system widens the gap between large and small players in the national supply chain.

    Replacing the quota system with a more open approach, such as a transparent, tariff-based licensing system, would likely lead to a healthier market. Importation would no longer be a playground for elite interests but a mechanism for stabilizing prices and ensuring availability. Increased competition among importers would drive prices closer to equilibrium levels. For consumers, this means better access to essential goods at more affordable prices and improved quality.

    This reform would also benefit domestic industries that rely on imported raw materials. Sectors such as manufacturing, food and beverages, pharmaceuticals, and small-to-medium enterprises (SMEs) would gain more flexibility in sourcing inputs. Competitive pricing of raw materials would lower production costs and boost the competitiveness of local products both at home and abroad. This could stimulate exports and increase employment opportunities.

    Moreover, a more open import regime could positively impact other sectors, including logistics, ports, freight transportation, and warehousing. Increased flow of goods and more efficient distribution channels would strengthen supply chains, making them more resilient to shocks. This would also spur economic development, particularly in eastern Indonesia, which often suffers from high logistics costs.

    However, abolishing import quotas must be approached with caution. A large portion of Indonesia’s domestic food producers remains small-scale and vulnerable. These local producers could be easily displaced if the market is flooded with cheaper and more consistent imported goods. Thus, any reform in the import system must be accompanied by robust protection and empowerment policies for local farmers, livestock breeders, and micro-businesses. Government support is essential in the form of production subsidies, access to affordable financing, improved technology, and guaranteed markets for local produce.

    Additionally, import oversight and regulation must be enhanced. Without stringent quality control and safety standards, the domestic market could be overwhelmed with substandard imports. Agencies such as quarantine services, customs, the Ministry of Trade, and the Ministry of Agriculture must play a proactive role. The digitization of import processes, data transparency, and the integration of national stock and demand information should be prioritized to ensure a smooth and accountable system.

    What is commendable about President Prabowo’s proposal is the political will to evaluate longstanding policies that have become sources of inefficiency. Import regulations can no longer rely on closed, bureaucratic approaches. The global landscape has changed, supply chain disruptions caused by pandemics, geopolitical conflicts, and climate change all highlight the need for a flexible and open system to safeguard economic stability.

    Naturally, such a bold policy will attract resistance, especially from groups that have long benefited from the current quota system. However, the government must remain grounded in the principle that public policy should serve the broader interest of the people, not a handful of economic elites. Affordable food prices are not merely an economic issue, they are also a matter of social justice and national stability.

    In the long term, reforming the import system can be part of a larger structural transformation of Indonesia’s economy. The government must design a careful transition strategy, involve stakeholders inclusively, and foster public dialogue to ensure that the policy is widely accepted and effectively implemented.

    If executed carefully, based on data, transparency, and protection for domestic producers, the abolition of import quotas will not merely be a technical reform, but a strategic move toward a healthier, fairer, and more efficient trade system. The Indonesian people deserve access to high-quality goods at affordable prices. This is where the government must step in—not to restrict the market, but to ensure that it works for everyone.

  • Danantara: Prabowo’s Bold Vision to Transform Indonesia’s Economy

    Danantara: Prabowo’s Bold Vision to Transform Indonesia’s Economy

    In the heart of Indonesia’s economic transformation, a new initiative is set to redefine the role of state-owned enterprises (SOEs) and pave the way for national prosperity. Danantara, officially named Daya Anagata Nusantara, is a visionary economic strategy introduced by President Prabowo Subianto in 2025. This initiative aims to consolidate and optimize the management of Indonesia’s BUMNs / SOEs (Badan Usaha Milik Negara / State Owned Enterprises). This strategy aims to create a more efficient and competitive economic structure that benefits the entire nation.

    Set for an official launch on February 24, 2025, Danantara is envisioned as Indonesia’s national investment fund, a powerful financial instrument that will oversee key national assets. Danantara is designed to manage and integrate these sectors, from banking and energy to telecommunications and mining, under a single, well-structured umbrella of productive economy. With a total asset valuation reaching IDR 14,715 trillion, equal to 900 million USD, this initiative is expected to play a central role in Indonesia’s economic growth and stability.

    Prabowo carefully chose the name Daya Anagata Nusantara to reflect the nation’s commitment to a prosperous and self-sustaining future. In Bahasa Indonesia, Daya means strength or power, Anagata means the future, and Nusantara represents the Indonesian archipelago. Thus, Danantara symbolizes Indonesia’s future economic strength, which is managed with the vision of long-term national welfare and sustainability.

    This concept aligns closely with Article 33 of the Indonesian Constitution UUD 1945, which states that national wealth must be utilized for the greatest prosperity of the people. By consolidating the assets of SOEs under Danantara, the government seeks to enhance efficiency, drive sustainable development, and ensure that the benefits of economic growth reach every citizen.

    Danantara’s structure is inspired by successful international models, particularly Temasek Holdings in Singapore and Khazanah Nasional Berhad in Malaysia. As a sovereign investment arm, both Temasek and Khazanah have successfully managed Singapore’s state assets, generating growth through strategic investments. Similarly, Danantara will act as a professional investment institution, ensuring that Indonesia’s national assets are managed with transparency, efficiency, and accountability. This new framework is expected to attract both domestic and foreign investors, boosting confidence in Indonesia’s economic potential.

    The focus areas of Danantara will include downstream industry, infrastructure development, food and energy security, and import substitution industries. Additionally, it will support the digital economy and technological innovation, further positioning Indonesia as a global economic powerhouse.

    The establishment of Danantara presents significant opportunities for businesses and investors. The government aims to create a more competitive and innovative business environment by streamlining the management of state-owned assets to become economically productive. This initiative also opens doors for strategic partnerships between SOEs and private enterprises in the long run, fostering collaboration that can drive major economic projects regionally.

    Furthermore, Danantara’s impact is expected to extend beyond Indonesia’s borders. With a more integrated and professional approach to asset management, the country could become a more attractive destination for foreign direct investment (FDI), strengthening its position in global trade and commerce.

    Danantara’s vision is deeply connected to the economic philosophy of Sumitro Djojohadikusumo, one of Indonesia’s most influential economists and a proponent of state-led economic development in the Suharto era. With him, Suharto gained development achievements during his presidency during the 1980s. Sumitro’s belief that Indonesia’s economic independence must be built on the strategic management of national resources resonates strongly with Danantara’s mission. By consolidating state assets under a professional body, Danantara moves closer to realizing Soemitro’s dream of an economically sovereign Indonesia.

    Despite its promising vision, the greatest challenge facing Danantara is corruption within Indonesia’s bureaucracy. Corruption has long been a barrier to efficient governance and economic management, leading to massive financial losses and undermining public trust. Even so, with that high obstacle, Indonesia still needs to try to initiate any efforts, including Danantara.

    For Danantara to succeed, the government must ensure strict transparency and accountability. Implementing independent oversight mechanisms, conducting regular audits, and involving civil society in governance will be crucial to preventing corruption. Additionally, firm legal action against corrupt officials will reinforce the government’s commitment to ethical leadership.

    If implemented successfully, Danantara has the potential to reshape Indonesia’s economic future. Optimizing state asset management, enhancing investment strategies, and reducing inefficiencies could significantly increase national revenue. This, in turn, would enable greater investments in public welfare programs, infrastructure projects, and job creation initiatives, leading to improved living standards for millions of Indonesians.

    Even more, Danantara could elevate Indonesia’s global economic standing, strengthening its role in international trade and investment networks. By building a sustainable and inclusive economy, the country could accelerate its journey toward achieving Vision 2045, the national aspiration of becoming a high-income, globally competitive nation.

    highlight:

    Danantara is more than just an economic strategy. It is a bold step toward a self-reliant and prosperous Indonesia. By drawing inspiration from global models, embracing professional asset management, and ensuring a corruption-free administration, Indonesia has a real opportunity to maximize its economic potential.

    With strong political will, public support, and sound governance, Danantara can be the key to unlocking Indonesia’s economic golden age. As the country prepares for the next stage of its economic transformation, the success of Danantara will serve as a defining moment in Indonesia’s journey toward prosperity, independence, and global leadership.

    recommended to read:

    Afifi, A. A., Adrian, H., Azami, E., & Farid, M. (2024). Re-Viewing Sumitro’s Policy and Industrial Maturity: Powering Downstream and Manufacturing Industries for Economic Growth and Sustainable Society. Journal of Regional Development and Technology Initiatives2, 79-102.

  • An Airport in Payakumbuh City, is it Possible?

    An Airport in Payakumbuh City, is it Possible?

    Payakumbuh City, located in the Limapuluh Kota Regency of West Sumatra, has significant geographical and historical potential for developing air transport infrastructure. In the past, Payakumbuh had a small airstrip primarily used for light aviation activities. However, over time, this facility was not developed into a commercial airport. As modern transportation demands grow in the Sumatra region, the idea of reviving and developing an airport in Payakumbuh has become a relevant and strategic issue.

    Geographically, Payakumbuh is in a very strategic position at the heart of Sumatra Island. The city is located along the transportation route connecting major provinces such as West Sumatra, Riau, Jambi, and North Sumatra. This location makes it a potential hub to enhance regional connectivity. Developing a regional airport in Payakumbuh would not only accelerate the flow of goods and people but also support economic growth, particularly in trade, tourism, and logistics.

    Furthermore, residents of Payakumbuh and its surrounding regions have the right to enjoy equitable access to modern transportation facilities, including airports. Air travel is no longer a luxury but a necessity in fostering regional integration and supporting economic activities. An airport in this region would bridge the gap in infrastructure development compared to other parts of the country, providing residents with improved access to educational, healthcare, and business opportunities.

    In planning the development, the type of airport to be built must match local needs and geographical conditions. One proposal is to construct an airport capable of serving medium-sized aircraft like the CN235 or Airbus C295. These aircraft are ideal for short to medium-haul regional flights. Infrastructure such as a runway with a minimum length of 1,200 to 1,800 meters would be a realistic starting point to support these aircraft operations.

    An airport in Payakumbuh could be designed as a regional facility to meet air transportation needs from and to surrounding areas in Sumatra. Besides supporting domestic mobility, this airport could also become a gateway for small-scale international flights, especially to neighboring countries like Malaysia and Singapore. This would make the development a catalyst for the growth of cross-border tourism and trade.

    The estimated investment for building the airport largely depends on the scale of its development. As a reference, the initial construction of a runway, a simple terminal, and navigation facilities is estimated to require a budget of approximately IDR 500 billion to IDR 1 trillion. Subsequent phases, including the development of modern terminals and additional facilities, could require further investment of up to IDR 2 trillion. Funding can be sourced through government budgets, public-private partnerships (PPP), or direct private sector investment.

    The development of the Payakumbuh airport can be carried out in stages, with the priority being the construction of a runway that meets international aviation standards. The first phase could focus on building the runway, control tower, and basic operational facilities. Later, passenger terminals and cargo facilities could be developed gradually according to increasing demand.

    Moreover, the presence of this airport would support economic integration across regions in Sumatra. With improved air connectivity, small towns in Sumatra would have easier access to economic centers on the island. This could also reduce reliance on land transportation, which is often hindered by road conditions and long travel times.

    From an economic impact perspective, developing the airport in Payakumbuh is expected to create new jobs in various sectors, from construction to airport operations. Additionally, local industries, such as small and medium enterprises (SMEs), would benefit from increased economic activity in the region. With proper planning, the airport’s existence could become a significant economic driver for Payakumbuh and its surroundings.

    However, this development must also consider environmental and social aspects. Efforts to preserve the environment and consultations with the local community are essential elements to ensure that the project is sustainable. With an inclusive approach, the negative impacts of development can be minimized, while the benefits can be felt by all parties.

    Developing an airport in Payakumbuh City is a strategic step that can bring long-term benefits to West Sumatra and the surrounding regions. With careful planning, sufficient investment, and phased implementation, this facility could become a connectivity hub that supports regional economic growth, ensures access to essential services, and improves community welfare.

  • Trump’s Victory: What Next for Indonesia’s Economy and Diplomacy

    Trump’s Victory: What Next for Indonesia’s Economy and Diplomacy

    With Donald Trump now confirmed as the U.S. president, Indonesia’s economy and diplomatic positioning will likely face significant shifts, reflecting both challenges and strategic opportunities. Trump’s prioritization of economic nationalism could reshape Indonesia’s trade and investment dynamics with the U.S., emphasizing bilateral agreements that may favour American interests. Targeted investments in sectors like energy could arise, especially in natural resources, though potentially under stricter conditions.

    Diplomatically, Trump’s assertive stance on China places Indonesia in a sensitive balancing act, as it maintains strong ties with both global powers. Trump’s interest in alliances outside the U.S.-China framework might enhance Indonesia’s and Malaysia’s role within ASEAN, positioning it as a vital ally in Southeast Asia and adding leverage in regional security matters.

    In manufacturing, Indonesia might feel initial challenges from Trump’s “America First” agenda, with potential trade restrictions on goods. However, U.S. companies may seek to diversify away from China, potentially bringing new investments to alternative regions such as Indonesia as a manufacturing base.

    Trump’s policies, especially his support for fossil fuels, could also boost Indonesia’s coal exports. However, this may clash with Indonesia’s goals for green energy development, creating tension as Indonesia works to shift toward renewable energy sources. The U.S. may increase imports from countries like Indonesia, but these benefits could come with strings attached.

    Global trade regulations will likely tilt toward protectionism under Trump, prompting Indonesia to explore alternative trade markets across Asia, Africa, and the Middle East. These adjustments may reduce Indonesia’s dependency on the U.S., diversifying its trade relationships in response to U.S. protectionist measures.

    Altogether, Trump’s presidency presents Indonesia with a mix of opportunities and challenges. To navigate this complex terrain successfully, Indonesia will need to adopt proactive policies that align with its long-term economic and diplomatic interests, ensuring it can balance its relationships with both the U.S. and China while safeguarding national priorities.

  • Future Research in Marketing Customer Experience

    Future Research in Marketing Customer Experience

    As a researcher, it is significant for us to know and understand the market research priorities and trends. This could give an insight into the future opportunities of the certain field that we are looking into; therefore, our research is relevant to the current situation and demand in the market. As such, three research priorities have been identified by the researcher in the marketing area which are, customer lifetime value, reinventing customer experience through digital innovation, and finally hyper-Personalization. 

    1. Customer Lifetime Value

    A study from Marketo An Adobe Company found that customer lifetime value and customer retention seat at the top two marketing priorities of their company in 2025. This study is based on a survey that was conducted on 700 senior executives and their responses were analyzed. Customer lifetime value could be defined as the present value of the future cash flows or the value of business recognized by the customer during his or her entire relationship with the company. By applying customer lifetime value, marketing managers can easily obtain the cash value connected with the long-term relationship with any customer. Ideally, lifetime value should be bigger than the cost of acquiring a new customer, which also known as the break-even point.

    Once we know the CLTV, we could also compute how much the company could spend on paid advertising such as Facebook ads, YouTube ads, Google Adwords, etc, to acquire a new customer. Customer lifetime value is significant because the higher the lifetime value of a customer, the greater the profits. Once we know our customer lifetime value, then we could improve it.

    2. Reinventing Customer Experience through Digital Innovation

    In a study from the Pew Research Center (2014), experts project that by 2025 the Internet of Things will increase; they say this enormous network of devices, appliances, cars, clothes, and even sensor-laden elements of the environment will be connected and will exchange data. The user experience was before considered as everything digital and customer experience as everything physical. However, with the development of the Internet of Things, they have overlapped, and they are coming together as everything digital.

     Research by IBM Corporation (2018) also revealed that reinventing customer experience is one of the mandates to the future chief marketing officer that shows the importance of customer experience in future digital innovation.

    Customer experience or also known as CX is the customers’ holistic perception of their experience with a certain business or brand. It is a result of every dealings a customer has with the business entity, starting from browsing the website to talking to customer service for purchase, receiving the product/service they bought from you until post product purchase. Everything a company does impact their customers’ perception and their decision to keep coming back or not which leads to customer retention or detention.

    However, with the development of digital and technology in the future, the customer experience also will start to change. It could either give a good or bad impact to the company depends on how the company handling it. Thus, the marketing department needs to find a way to ensure that CX is good.

    3. Hyper-Personalization 

    Based on Subramanyan (2014), defined hyper-personalization as utilizes big data for providing products, services, and information into the target segment that are more personalized and specialized. Based on customer requirements and with the assistant of hyper-personalization firms could create authentic customer experience online. Hyper-personalization works as a tool for marketers to provide personalized information about the customers. Hyper-personalization has three areas that are social listening, data analysis, and content. 

    Nowadays we are living in the era of the evolved consumer where consumers are actively looking for information to make informed decisions instead of putting their trust in the brand. Personalization is integrating personal and transactional information such as name, title, and buying history. However, hyper-personalization uses behavioral and real-time data for creating highly communication which is suitable for the users. Hyper-personalization is considered the different aspects of maximizing chances into the contents of customers for targeting the right audience via the lifecycle of the customer. 

    One typical example of personalization is that sending an email to a customer by mentioning their first name in the subject line. That consider good practice, but it is not sufficient to grab the customer’s fancy. However, hyper-personalization is more advanced than that. The technology of Hyper-personalization will allow the gap between the businesses’ needs providers and the desires of customers to be locked. As well as allowing customers to enjoy a range of products, whereas, the providers of services fight against the fragmentation of the retailing and media across multiple platforms and channels NEM SRIA (2025).

    References

    IBM Corporation (2018). The Modern Marketing Mandate: Insights from the Chief Marketing Officer study. Retrieved from https://www.ibm.com/downloads/cas/W7D6L9EL

    Marketo an Adobe Company (2025). Marketing 2025 the future of skills in technology in marketing Across Australia and New Zealand. Retrieved from https://engage.marketo.com/rs/460-TDH-945/images/Marketo-Marketing2025-ResearchPaper.pdf.

    NEM SRIA (2025). Community inputs gathered for a white paper on the strategic Research and Innovation Agenda in 2025 contributing to the design of the next FP9. Retrieved from https://nem-initiative.org/wp-content/uploads/2018/09/nem-sria-toward-fp9-final.pdf.

    Pew Research Center (2014). Digital Life in 2025. Retrieved from https://www.pewresearch.org/internet/wpcontent/uploads/sites/9/2014/05/PIP_Internet-of-things_0514142.pdf

    Subramanyan, V. (2014). What is The Hype Around ‘Hyper-Personalization? Available at: www.business2community.com/marketing/whats-hype-around-hyper-personalization

  • Value Creation and Co-creation

    Value Creation and Co-creation

    Value creation is the main concept of business activities. Creating values is involving stage by stage process from exploration, communication, and delivery of the values to the customer. Values in the marketing point of view are identified from customer perception based on their needs and wants. This is inline as the main object is people, the value creation process is depending on how we translate people’s voices and embed it on products and services.

    While value co-creation is significantly different from value creation, this stage process involving interaction between the business and its customers. The co-creation activities are conceptually different from just value creation. Co-creation process embedding customer thought and experience on products or services.

    There are two general core steps of value co-creation process which are: contribution and selection process. While the type of way customer co-creation involved in the creation process can be described with the type of interaction. This type of interaction can be explored into four degrees of interaction control, which are:

    • Tinkering: customer giving a contribution, while business does the selection
    • Submitting: business control contribution and selection process
    • Co-designing: business control contribution, while customer do the selection
    • Collaboration: customer involve in contribution and selection activities

    With this value co-creation approach, the business can grow with the new ideas that resulted from the experience of the business and customers. This situation will be benefited to both parties. By sharing their value creation process, businesses can be more confident of value acceptance by customers, while customers also can embed their experience on values created. It is a mutual solution for a specific product that requires customer insight on it.

    Today, many innovations, ideas, concept or products are using value co-creation approaches. The online platforms and IoT (Internet of Things) benefitted from collaboration value co-creation simply known as open-source. Programming code like Java, PHP, HTML5, Linux, Python, R, etc really benefited from it. Some the application like Firefox, Apache is using the open-source co-creation to grow and they succeed to push their innovations into these limits.

    With this open-source code, we can see an innovative platform has rapid growth. Some of the app platforms like Android, Uber, Grab, Gojek, Foodpanda, Matdespatch, Easyparcel, Wikipedia, WordPress really benefited from this approach. We can observe there is also a big contribution of a big player like Google using tinkering and submitting value co-creation type of process to deliver its product as an open-source platform, and these approaches are proven effective since they can overlap Yahoo and Microsoft.

    Innovations that used value co-creation process not just happen online and on the internet, but also can be used on producing ideas for physical product and services, such as the ideas of new branch opening that using the feedback of customer and potential customer. The current regional development plan and repair can be utilized using feedback from citizens to capture problem identification, like damaged roads or facilities.

    The implication value co-creation on positioning strategy is so significant since business already captures some of the values perceived by the customer. The business also release some responsibility to the customer, customer can feel benefits early and this condition is reducing the cost of the evaluation, by this business also can grow along with the evolving needs and wants of the customer.

  • Platform Banking: The way to the future for Islamic Banking

    Platform Banking: The way to the future for Islamic Banking

    Islamic banking is entering the state of irrelevance, or impasse. Many countries adopting dual banking system are witnessing the growth of Islamic banking sector stagnating. Indonesia for instance is growing at single digit in 2017, much lower than its peak of 47% in 2011, or 15-20% in the last three years.

    The growth of innovative finance such as peer to peer lending and crowd funding, better known for its platform as financial technology or fintech, is among the threat affecting Islamic banking.

    Platform banking is the face of banking in the future. In essence, banks will not only a place for banking transactions, but also for other services provided by the bank and its partners. Such services may include financial services products like insurance, or even non-financial.

    The concept of platform is introduced and used extensively today in e-commerce area, and increasingly by services companies.

    Banking can offer itself as a platform for other services related to banking, such as property, restaurant, insurance, mutual funds, or other services such as retail or government services.

    Platform banking has been introduced by several medium sized commercial banks in Japan, Korea, the United Kingdom, Swiss, Germany, and the United States.

    This development is interesting to follow, as banking services cross borders and go beyond traditional banking services.

    The main hurdle in offering non-banking services is regulatory, as banking is highly regulated and some of these products are considered risky to the reputation or security of the banks.

    One of the ways to mitigate this is by creating a digital platform and investing adequately on security.

    With the advancement of technology, this hurdle can be mitigated.

    The other aspect that allows the application of platform concept in banking is banking attracts customers to be in one place, either physically in banking halls or virtually. This frequent visits or use of banking facilities is an important feature that are attractive to providers of other services or producers of goods that can be offered through banking platforms i.e. banking halls (its vicinity) and banking internet portal or platform.

    Platform banking is essentially bringing the banking services back to its original function i.e. the place where communities trusted the priests as their bankers then.

    It early days, communities deposit their money and valuables to the church or other religious establishment. Temples or churches, in the Middle Ages, were not only place of worship but also a place where people safekeep their possession when they are going for a long trip or pilgrimage. In a simplest sense, church was a platform.

    In hindsight, may be it is time to reconsider banking, and particularly Islamic banking as a platform.