Overview

A dynamic and well-functioning private sector should hopefully play a pivotal role in alleviating extreme poverty and promoting inclusive economic growth within a sustainable global framework.^[1] By fostering innovation and entrepreneurial activity, the private sector has the potential to expand economic opportunities, particularly among underserved populations, while also supporting a more efficient and responsible use of natural resources.

Currently, in developing economies such as Indonesia, the private sector accounts for approximately 90% of employment, 75% of capital investment, over 70% of total economic output and more than 80% of government revenue.^[2] However, the momentum of this vital sector has slowed markedly since the 2008 - 2009 global financial crisis. Private investment has weakened significantly within Indonesia, with per-capita investment growth projected to average just 3.7% between 2023 and 2024, which is roughly half the pace observed during the course of the preceding twenty years.^[3]