Per Capita Income of Indonesian Citizens Lags Behind Malaysia and Thailand, What Are the Causes?

Kapanlagi.com - The Central Statistics Agency (BPS) has just released interesting news regarding Indonesia's economy! In 2024, Indonesia's Gross Domestic Product (GDP) per capita reached USD 4,960.3, or equivalent to Rp 78.6 million per year. If we average it out, each citizen can enjoy an income of around Rp 6.55 million per month.

However, even though this figure shows a promising increase compared to the previous year, Indonesia still has to work hard to catch up with neighboring countries like Malaysia and Thailand. The latest data shows that Indonesia's per capita income is still far below those two countries, raising questions about national economic competitiveness.

So, how does Indonesia's per capita income actually compare to other countries in Southeast Asia? Summarized by Kapanlagi.com from various sources on Tuesday (11/2/2025), here is the data and analysis.

1. Indonesia's Per Capita Income Increases, But Still Low in ASEAN

According to a report by BPS, Indonesia's GDP per capita in 2024 reached USD 4,960.3. This figure shows an increase from previous years. However, compared to other countries in ASEAN, Indonesia still lags quite far behind.

For comparison, here are the per capita incomes of several Southeast Asian countries in 2024:

1. Singapore: USD 93,960
2. Brunei Darussalam: USD 37,020
3. Malaysia: USD 14,420
4. Thailand: USD 7,750
5. Indonesia: USD 4,960
6. Vietnam: USD 4,700
7. Philippines: USD 4,440

From this data, it is evident that Malaysia has a per capita income nearly three times higher than Indonesia, while Thailand also remains ahead with a difference of more than USD 2,700.

2. Factors Affecting the Gap

Although the Indonesian economy continues to grow, there are several key factors that cause Indonesia's per capita income to still lag behind Malaysia and Thailand:

1. Different Economic Structures

Malaysia and Thailand have more advanced industrial and service sectors compared to Indonesia. While Indonesia still relies on the natural resources sector, Malaysia has developed a high-tech manufacturing sector and a financial industry.

2. Labor Productivity

Labor productivity in Indonesia is still relatively low. According to World Bank data, labor productivity in Malaysia is nearly twice as high as in Indonesia. This is influenced by education levels, workforce skills, and investment in research and technology.

3. Wages and Worker Welfare

The minimum wage in Indonesia is still lower compared to Malaysia and Thailand. This contributes to low purchasing power and a lower quality of life.

4. Infrastructure and Investment Regulations

Indonesia still faces various challenges in infrastructure development and investment regulations. High logistics costs and complex regulations make investors prefer Malaysia or Thailand as investment destinations.

3. Government Target: Indonesia's Per Capita Income Reaches USD 12,000 by 2035

The Coordinating Minister for Economic Affairs, Airlangga Hartarto, optimistically targets that Indonesia's gross national income (GNI) per capita will soar threefold to USD 12,000 by 2035.

With the potential demographic bonus still favorable until that year, Indonesia has a golden opportunity to leverage its large productive-age population as the main driver of economic growth.

However, to realize this ambition, strategic steps such as accelerating structural reforms, increasing investment, and enhancing the quality of education and labor must be carried out consistently.

4. Impact on Society: Is the Increase in Income Felt by Citizens?

Although data shows an increase in per capita income, not all Indonesian citizens feel its impact directly. Several factors still pose challenges to the welfare of the community, including:

• Economic Inequality: The increase in income is not evenly distributed across regions, with major cities like Jakarta and Surabaya experiencing higher growth compared to other areas.
• Rising Prices of Basic Needs: Even though income has increased, the rise in the prices of goods and services has also escalated, resulting in no significant change in the purchasing power of the community.
• Unemployment and Social Gaps: Many informal workers and unemployed individuals do not benefit from this economic growth.

5. What Can Indonesia Do to Catch Up with Malaysia and Thailand?

In order to increase per capita income and catch up with Malaysia and Thailand, Indonesia needs to take several strategic steps:

1. Increase Investment in the Manufacturing and Technology Sectors

Encourage the development of high value-added industries to enhance global competitiveness.

2. Accelerate Education and Labor Reforms

Focus on improving workforce skills to be better prepared for a digital economy and Industry 4.0.

3. Improve Infrastructure and Investment Regulations

Simplify bureaucracy and enhance infrastructure quality to attract more foreign investors.

4. Improve Worker Welfare

Adjust minimum wages and strengthen social protections for workers in both formal and informal sectors.

If these steps can be implemented effectively, it is not impossible that in a few decades Indonesia could catch up with Malaysia and Thailand in terms of per capita income.

6. People Also Ask

1. What is Indonesia's per capita income in 2024?

Indonesia's per capita income in 2024 is projected to reach USD 4,960.3 or around IDR 78.6 million per year.

2. Why is Indonesia's per capita income lower than Malaysia's?

Several key factors include lower labor productivity, a less developed industrial sector, and still complex investment regulations.

3. How can Indonesia increase its per capita income?

By increasing investment, reforming education, developing high-value industrial sectors, and improving regulations and infrastructure.

4. Is there a possibility for Indonesia to catch up with Malaysia and Thailand?

Yes, if Indonesia can leverage its demographic bonus, increase labor productivity, and accelerate economic and investment reforms.

(kpl/rmt)