2026 Csilla Lakatos, Idden Valiant, and Mochamad Pasha © 2026 The World Bank1818 H Street NW, Washington DC 20433Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved. This work is a product of The World Bank. The findings, interpretations, and conclusions expressedin this work do not necessarily reflect the views of the Executive Directors of The World Bank or thegovernments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in thiswork and does not assume responsibility for any errors, omissions, or discrepancies in the information,or liability with respect to the use of or failure to use the information, methods, processes, or conclusionsset forth. The boundaries, colors, denominations, links/footnotes and other information shown in thiswork do not imply any judgment on the part of The World Bank concerning the legal status of anyterritory or the endorsement or acceptance of such boundaries. The citation of works authored byothers does not mean The World Bank endorses the views expressed by those authors or the contentof their works. Nothing herein shall constitute or be construed or considered to be a limitation upon or waiver of theprivileges and immunities of The World Bank, all of which are specifically reserved. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination ofits knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as longas full attribution to this work is given. Attribution—Please cite the work as follows: “Lakatos, C., Valiant, I., and M. Pasha. 2026. ServicesCompetitiveness for Growth and Jobs in Indonesia. © World Bank.” Any queries on rights and licenses, including subsidiary rights, should be addressed to World BankPublications, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e mail:pubrights@worldbank.org. Photo credits: © www.freepik.com, and © www.vecteezy.comCover design: Arsianti. Report is designed and typeset by Arsianti. ACKNOWLEDGMENTS This report was prepared by Csilla Lakatos (Senior Economist, World Bank), Idden Valiant(Consultant, World Bank) and Mochamad Pasha (Senior Economist, World Bank). Detailedfeedback, suggestions, and comments were received from peer reviewers Alessandro Barattieri(Senior Economist, World Bank), Nora Dihel (Senior Trade Economist, World Bank), Pierre Sauve(Senior Private Sector Specialist, World Bank), and Jonathan Marskell (Senior Digital Specialist,World Bank). The team appreciated the opportunity for engagement and the valuable feedbackreceived through multiple consultations with the Coordinating Ministry of Economic Affairs,Ministry of Finance, the Ministry of National Development Planning, Ministry of Trade, the NationalEconomic Council, and the Indonesia Services Dialogue. The report serves as background paperfor the 2026 Indonesia Jobs and Growth Report (World Bank 2026). The team worked under the overall guidance of Carolyn Turk (World Bank Division Director forIndonesia and Timor-Leste, World Bank), Lars Christian Moller (Operations Manager, WorldBank), and Habib Rab (Practice Manager, World Bank). Financial support for this work was generously provided by the Governments of the Netherlands,Norway, Sweden, Switzerland, and the United Kingdom through the Umbrella Facility forTrade Trust Fund and the Australian Government through the Australia-World Bank IndonesiaPartnership (ABIP). TABLE OF CONTENTS Acknowledgement............................................................................... iiiExecutive Summary.............................................................................. ix 1. Introduction....................................................................................... 1 2. Services: a source of growth, job creation, and investment........... 6 2.1 Services value added................................................................................................62.2 Services jobs...............................................................................................................82.3 Services investment............................................................................................... 122.4 Services trade.......................................................................................................... 13 3. The regulatory framework for services.......................................... 17 3.1 Regulation of foreign services investment......................................................... 203.2 Regulation of services trade.................................................................................253.3 Regulation of foreign workers.............................................................................. 273.4 Services commitments.......................................................................................... 293.5 The restrictivene