Is Vietnam About to Take Indonesia's Crown as Southeast Asia’s "Golden Child"?
For years, Indonesia strutted onto the Southeast Asian stage with all the confidence of a natural-born leader. The demographics were amazing, the resources abundant, and the market size enough to make any investor drool. It was the prom king of ASEAN. Sure, a little unpolished, but brimming with potential. Venture capitalists lined up to throw money at anything vaguely resembling innovation, convinced that Indonesia’s sheer size would turn even the most questionable ideas into gold. Remember when apps to rent umbrellas were a thing? Yeah, that happened.
Fast forward to 2025, and Indonesia’s sparkle has dulled. The "economic powerhouse" investors were sold now looks more like a long-neglected timeshare with a leaky roof.
The resources? Still there.
The people? Still there.
The results? Well, they seem stuck in a slide deck from 2015.
Meanwhile, Vietnam, the supposed understudy, quietly decided it didn’t need a starring role handed to it; it would take it. While Indonesia snoozed on its laurels, Vietnam got its hands dirty, built factories, and lured global investors with an efficiency that makes you wonder: Did they actually read the rulebook? Indonesia's downfall isn’t a tragedy orchestrated by outside forces. No, this is a self-inflicted tale of squandered potential and a fatal overconfidence in unfulfilled promises.
Natural Resources Won’t Save You, Indonesia
Nickel for the electric vehicle revolution, coal for the world’s energy addicts, and palm oil for everything from cookies to cosmetics. If natural resources were a high school talent show, Indonesia would be the kid juggling chainsaws while the crowd cheers. But, those chainsaws were inherited, not earned. It’s easy to dazzle when you’re born sitting on a treasure chest, but what happens when the world wants more than shiny rocks?
Instead of using its natural bounty as a springboard for broader economic innovation, Indonesia has treated it like a golden crutch. Need an economic boost? Just dig deeper. Meanwhile, Vietnam took a different approach: it hustled. No glittering inheritance? No problem. Vietnam built factories, cultivated global supply chain relationships, and became the reliable workhorse investors love. It’s not glamorous, but it works.
Then there’s Indonesia’s commitment to keeping investors on their toes with its export bans, regulatory curveballs, and pricing policies that shift with the political winds. Trying to do business here feels less like a calculated investment and more like betting on roulette.
Vietnam, on the other hand, keeps things simple. No massive deposits of nickel, but no massive headaches either. It’s the classic tortoise-and-hare story, except in this version, the hare keeps stopping to argue over mining rights while the tortoise gets a billion-dollar factory deal. Sometimes, boring wins.
Bureaucracy and Corruption: The Anchors Dragging Indonesia Down
If procrastination were a sport, Indonesia’s bureaucracy would be its undefeated champion. Starting a business here is less of an entrepreneurial journey and more of a hazing ritual. The process involves an endless scavenger hunt for forms, permits, and signatures, punctuated by cryptic “consultations” with officials who seem more concerned about their mid-afternoon snack preferences than your project timeline. It’s less “ease of doing business” and more “trial by fire.” Vietnam, while no utopia, at least feels like it read the memo on how to encourage investment without requiring an MBA in local bribery dynamics.
Speaking of bribes, corruption in Indonesia is so deeply embedded it could apply for permanent residency. From village halls to Jakarta’s skyscrapers, “facilitation fees” are a standard feature of the business landscape. Want that permit expedited? Better know the right handshake (and bank account number). It’s an entire obstacle course designed to make even the most patient investors question their life choices.
Vietnam, by contrast, has adopted a more investor-friendly playbook. Sure, it’s not squeaky clean, but at least the corruption feels like a side note rather than the entire plot. High-profile anti-corruption crackdowns have sent a clear message: play by the rules, or play elsewhere. Meanwhile, Indonesia’s approach to corruption feels like a game of whack-a-mole, where every “victory” reveals five more scandals lurking under the surface. It’s exhausting, even to watch.
Investors expect stability, not perfection. And that’s where Vietnam shines. Its processes may not be flawless, but they’re functional. Its officials might not be saints, but at least they’re consistent. When the choice is between predictability in Vietnam or chaos in Indonesia, the answer becomes pretty clear. Even if Vietnam’s got its issues, at least it doesn’t feel like a full-time job to navigate them.
The Startup Ecosystem: Indonesia’s Self-Inflicted Wounds
Remember when Gojek, Tokopedia, and Bukalapak were hailed as unicorns galloping toward economic revolution? Fast-forward a few years, and the ecosystem feels more like a poorly managed petting zoo. There’s still activity, but it’s mostly limping ponies and a few goats chewing on investor cash while everyone wonders where it all went wrong.
Take Bukalapak’s IPO. It was supposed to be Indonesia’s moment of glory, a coming-of-age story for its startup scene. Instead, it tanked spectacularly, proving that hype and inflated valuations are not substitutes for a solid business model. Then there’s Zenius, the edtech darling that went from revolutionizing education to abruptly collapsing, leaving hundreds jobless and investors scratching their heads. Turns out, scaling too quickly without making money is less of a growth strategy and more of a slow-motion disaster.
Vietnam, meanwhile, isn’t chasing headlines or “unicorn” status. Its startups are quieter, less flashy, but grounded in something Indonesia often overlooks: fundamentals. You won’t find Vietnamese startups burning through billions just to get “eyeballs.” Instead, they’re building businesses that actually… work.
Indonesia’s startups face another hurdle: a regulatory environment that seems designed to test your patience. Between navigating local power plays, interpreting fragmented legal frameworks, and appeasing a government more interested in taxing innovation than encouraging it, startups in Indonesia are both competing, and surviving. Vietnam, by contrast, keeps it simple. Its environment is far from perfect, but at least it doesn’t feel like an obstacle course.
In the battle between unicorns with baggage and pragmatic startups with promise, Vietnam’s quiet, sustainable approach is winning. Indonesia might want to take notes if it can find a pen amid the chaos.
FDI Friendliness: Vietnam Is Practically Rolling Out the Red Carpet
Want to set up a factory in Indonesia? Great! First, you’ll need to brush up on your patience, creativity, and willingness to navigate a bureaucratic labyrinth that makes Dante’s Inferno look like a pleasant stroll. The land ownership laws alone are enough to make seasoned investors cry. Designed by what seems like a committee of bureaucrats with a sense of humor, they ensure that any attempt to build something meaningful will be buried under a mountain of forms, conflicting regulations, and the occasional “facilitation fee” suggestion.
Once you’ve survived that, it’s time for the approval gauntlet. About 17 different agencies (each with their own unique demands) will weigh in, usually with timelines that resemble geological eras. By the time you’re done, you’ll be so exhausted you might start reconsidering your entire business plan. Or, like many investors, you might just pack up and head to Vietnam.
Vietnam, by contrast, seems to have attended a crash course in making foreign investors feel welcome.
Want to build a factory? Here’s your special economic zone with all the infrastructure you need.
Tax breaks? Absolutely.
Streamlined processes? Check.
Vietnam isn’t just making it easier for investors; it’s making it desirable.
Vietnam’s FDI policies are forward-thinking, targeting high-growth sectors like high-tech manufacturing and renewable energy. It’s not just about luring investment and building a future. Indonesia, meanwhile, seems stuck in the past, still trying to monetize its natural resources while ignoring the very industries that could drive long-term growth.
Vietnam is rolling out the red carpet, serving hors d’oeuvres, and offering a guided tour. Indonesia, on the other hand, can’t even decide whether to let you in the door. No wonder investors are choosing the path of least resistance.
Vietnam didn’t cunningly steal Indonesia’s spot as Southeast Asia’s golden child. It didn’t need to. Indonesia practically handed it over, complete with inefficiency, corruption, and a lovingly handwritten note that read, “Here, you try.” While Vietnam rolled up its sleeves and worked to charm investors, Indonesia was too busy tying its own shoelaces together with red tape, then blaming the fall on everyone else.
This is a tale of how to fumble a golden opportunity. Indonesia had all the advantages: the size, the resources, the demographics, and global goodwill. But instead of leveraging these strengths, it treated them like decorations. Vietnam’s ascent is a testament to its own hustle, and a neon sign highlighting Indonesia’s chronic case of self-sabotage.
Is Vietnam the new golden child of Southeast Asia? At this point, it’s less of a question and more of an inevitability. Indonesia still has the potential to make a comeback, but that would require reforms, self-awareness, and effort. These are concepts that seem more aspirational than achievable right now. Investors have already moved on. Indonesia has no one to blame but itself.