The Indonesian government is reportedly pushing a major project to transform Bali, a world-renowned tourist destination, into a global financial hub. The plan aims to attract foreign financial firms, asset management companies, and private equity funds to Bali to revive sluggish investment sentiment and a slowing growth trend.
On the 12th (local time), Bloomberg cited Indonesian government officials as saying that Indonesia President Prabowo Subianto has formally agreed to a government plan to develop Bali along the lines of India's "GIFT City (Gujarat International Finance Tech City)" or the United Arab Emirates' "DIFC (Dubai International Financial Centre)." The plan remains in an early, undisclosed concept stage, but a draft is being prepared with a goal of a parliamentary vote within the year.
According to officials, the government plans to create a financial district in Bali and offer various incentives, including tax benefits, deregulation, and streamlined administrative procedures. Indonesia has long faced criticism that rampant bureaucratic procedures and regulations are ill-suited for attracting investment. In response, the government intends to benchmark Singapore's pro-business system and apply a separate legal framework to the Bali financial hub to attract investors.
The plan was born as Indonesia's economy entered a broad-based slump. Recently, investment has weakened externally and consumption has slowed internally, gradually dampening the growth trend. According to Bloomberg Intelligence, Indonesia's economic growth rate in 2025 is projected at 4.9%, a slight decline from last year's 5%. The current Prabowo administration has set a goal of achieving 8% growth by 2029, but to do so it needs direct investment of about 13 quadrillion rupiah (258.3 trillion won) over the next four years.
The creation of a financial hub is seen as the government's desperate measure to spur parched national economic growth. The project is reportedly being jointly led by the Ministry of Finance and the National Economic Council, with Bridgewater Associates founder Ray Dalio, head of the world's largest hedge fund, serving as an informal adviser.
Doji Mahardi, Spokesperson for the National Economic Council, said, "The government seeks to create a modern and transparent financial hub to support national economic development," and added, "Through this, we will establish a platform that links global capital with Indonesia's real economy."
Some, however, question whether Bali is suitable as a site for a financial hub at a time when it is grappling with overtourism. For example, more than 65% of Bali's freshwater resources are currently used in resorts and swimming pools, leaving some villages dependent on groundwater, and as hotels and road construction projects continue across the island, critics ask whether the infrastructure can accommodate a financial center.
The government maintains that Bali's international reputation and appeal will be strengths, but experts agree that there are many practical hurdles to the plan. Even in the case of GIFT City, designated in 2013 as India's first international financial services center, several years after development began it still has not been completed and has been assessed as offering poor living conditions due to a lack of surrounding infrastructure.
Competition to attract corporations from regional rivals is also expected to be fierce. Nearby Malaysia has already established itself as a financial hub in the Islamic cultural sphere, and the Philippines has also completed legal reforms to attract investment. After receiving an "emerging market" rating from FTSE Russell under the London Stock Exchange, Vietnam is investing 172 trillion dong (about 9.3052 trillion won) to build an international financial center in Ho Chi Minh City, followed by a plan to foster Da Nang as a second financial hub.
Experts said, "For Bali to evolve from a tourism center to a financial center, it must secure international trust and establish a transparent institutional foundation," and noted, "The success or failure of the project depends on how swiftly and substantively Indonesia carries out reforms."