The Indonesian government is on track to establish an Indonesia Tourism Fund (ITF) by 2024, Indonesia’s Tourism and Creative Minister Sandiaga Uno announced following a limited meeting with President Joko Widodo and other members of his cabinet on Monday, December 4, 2023. 

The fund, to initially amount to Rp 2 trillion (about US$128.6 million), will be aimed at supporting tourism promotional events and nation branding.  

Sandiaga highlighted the success and economic impact from various international events held in Indonesia throughout the years, such as the G20 Summit, the FIFA U-17 World Cup, and MotoGP Mandalika – the last of which had an estimated economic impact of over Rp 8 trillion. 

“The Presidential Regulation regarding the tourism fund is set to be established in 2024,” he added. 

As quoted from Katadata, the fund would be managed by the Finance Ministry in a similar vein as with the fund managed by the Educational Fund Management Institution (Lembaga Pengelola Dana Pendidikan or LPDP), with involvement by stakeholders in the tourism sector.  

It follows successful examples set by Singapore and Saudi Arabia, wherein the tourism sector is stimulated without relying on state budget allocations. 

Initially, the Indonesian government targeted an initial fund of Rp 1 trillion. This amount was doubled after recognizing the substantial future needs of the tourism sector. 

The ITF’s funding sources include the state budget, foreign exchange earnings from tourism (taxes, levies, and other charges), and visa fees and Non-Tax Revenues originating from the tourism sector. 

The fund would be invested in financial instruments such as deposits, government bonds, and state-owned enterprise bonds. A portion of the fund’s growth will be recorded as Non-Tax Revenue used for the operational management of the ITF. 

“The fund will of course be managed carefully and will be selective towards high quality events that can improve local economies as well as national branding so as to improve our competitiveness when bidding for major events,” Mr. Sandiaga said.