AGP Executive Report

Indonesia Budget Watch: Indonesia’s 2027 draft state budget targets a 2.4% GDP fiscal deficit, with revenue projected at Rp3,426T and spending at Rp4,097.2T, while the government pushes spending efficiency and “quality” improvements. Energy Subsidy Pressure: The National Energy Council warns subsidized 3-kg LPG quotas may run out as demand rises and price gaps drive switching, urging tighter distribution supervision. Central Banking & FX: Bank Indonesia and Singapore’s MAS have operationalized a local-currency settlement framework for bilateral trade, using rupiah and SGD via appointed cross-currency dealers to cut FX risk. Trade Finance: Bank SMBC Indonesia expands trade and supply-chain financing with ADB risk-sharing to support business value chains. Digital Finance for SMEs: BRI rolls out a “new experience” for Qlola by BRI, boosting integrated collections and payments as transaction values jump 51% YoY in 1H26. SOE Efficiency Drive: President Prabowo says the government shut 290 unprofitable SOEs, saving Rp50T in operating costs, with more closures planned by end-2026. Jakarta Enforcement: Jakarta fines six waste firms for illegal dumping or unpermitted waste handling as the city tightens enforcement amid landfill constraints. Business & Markets: XTB launches CFD trading in Indonesia after regulatory approval, adding gold, silver, oil and gas to its app. Regional Dealmaking: Indonesia and New Zealand pledge deeper food security and renewable energy cooperation, including geothermal and solar. Workforce Mobility: VP Gibran backs stronger preparation for Indonesian apprentices heading to Japan, including an integrated training center. Geopolitics & Security: Indonesia, the US and allies kick off annual “Super Garuda Shield” drills to deter aggression in the Indo-Pacific. Disaster & Risk: Mount Sinabung in North Sumatra is raised to Level III after a major ash eruption, prompting tighter exclusion zones.

Indonesia Commodity Exchange: Indonesia’s planned commodity exchange (launching Jan 1) will only matter if it delivers a trusted benchmark and wins producer/trader adoption for nickel, palm oil and coal—lawmakers welcomed the move after complaints that prices are set overseas. Energy & Upstream: Pertamina East Natuna opened prequalification for a floating drilling rig for its North Natuna Sea exploration, targeting a spud between Dec 2026 and Mar 2027, with a 20% Indonesian content requirement. Digital & Capital Markets: IDX begins a trial to lower the stock price floor to Rp 1, while Indonesia also pushes digital finance and payments to support trade transformation and growth. AI Talent & Policy: OpenAI hired Meta executive Sandhya Devanathan to lead Southeast Asia and Australia, as Indonesia urges workers and universities to build AI and applied research skills for the green-jobs era. Tourism & Hospitality: Jin Jiang Hotels’ subsidiary signed a three-year Trip.com MoU with fixed commissions across 10 ASEAN markets, aiming for more predictable growth. Jakarta & Business Climate: Jakarta commuters are unhappy with a proposed parking fee hike, adding to local cost pressures.

Mining Policy Shift: Indonesia eases Natural Resources Export Proceeds rules for qualifying mining exporters, letting them park at least 30% for three months instead of 100% for 12 months, aiming to support macro stability, deepen domestic finance, and fund downstreaming. Industrial Demand in Central Java: The government says investor demand stays strong at the Kendal SEZ and Batang industrial park in Central Java, with land utilization at 100% and expansion applications underway. IDX Market Reform: The Indonesia Stock Exchange begins trials to cut the minimum stock price floor from Rp50 to Rp1 to improve liquidity and price discovery, with rollout tied to member readiness. AI for Workforces: Indonesia’s communications ministry urges workers to build job-linked AI skills as generative AI reshapes work, citing ILO findings that many ASEAN jobs are exposed to AI. AI Leadership Move: OpenAI appoints Meta veteran Sandhya Devanathan as VP for Southeast Asia and Australia, based in Singapore, as the firm expands regional consumer and enterprise operations. Housing Push: Danantara builds an integrated affordable-housing ecosystem and promotes state-backed financing cooperation to support the 3-million-home program. Tourism Recovery: Labuan Bajo’s tourism authority assesses post-quake conditions and maps destinations by damage level before reopening and resuming promotions. Wildfire Prevention: Indonesia’s police deploy 198 officers to fire-prone regions to curb land clearing by burning and boost community awareness. Sports Investment: Indonesia targets a US$521bn sports industry by improving risk-based licensing and investment coordination to speed permits and attract capital.

Investment Climate Push: Indonesia’s Investment and Downstreaming Ministry/BKPM says it’s streamlining licensing, strengthening legal certainty, and debottlenecking projects to improve the investment climate, with Jakarta recording Rp173.6tn in realized investment in 1H26. Sports as Growth Engine: The government links sports-sector investment to wider economic spillovers, targeting a US$521bn industry and using risk-based licensing coordination between ministries, including OSS “positive fictitious approval” for faster permits. ASEAN Haze Coordination: Singapore Institute of International Affairs urges stronger cross-border firefighting cooperation as El Niño-driven dryness worsens haze; it flags Jakarta’s new ACC THPC as not yet fully operational. Critical Minerals Geopolitics: A “mineral corridor” series argues value is shifting from mines to processing ecosystems, with China’s refining and manufacturing scale shaping global power. Sukuk Credit View: Fitch says listed hard-currency sukuk stayed largely investment grade in 1H26, with strong coverage across major exchanges. Asset Recovery Debate: Commentary warns repatriation can repeat plunder if recovered funds lack accountability to victims. Regional Trade/Connectivity: Indonesia’s Sabang port is framed as an India-Indonesia maritime corridor idea that still needs commercial, Indonesian-led execution.

Jakarta Capital Markets: The Indonesia Stock Exchange (IDX) says seven companies are in the IPO pipeline as of Aug. 28, with four from healthcare and one each from primary consumer goods, energy and industrials—while the exchange also logged Rp2.16 trillion from seven IPOs this year and Rp112 trillion from 122 debt and sukuk issuances. AI & Workforce: Indonesia’s Manpower Ministry is rolling out a “3S” strategy—upskilling, reskilling and cross-skilling—to help young workers adapt as AI reshapes jobs. Tech Leadership Shift: Sandhya Devanathan, Meta’s India and Southeast Asia head, is set to join OpenAI as VP for Southeast Asia and Australia, based in Singapore. Currency Watch: Analysts expect the rupiah to trade around Rp17,600–Rp17,900 per US$ next week, with inflation and trade data in focus amid global geopolitical risks. Public Policy & Cities: Jakarta is reviewing a proposed parking fee hike that could reach Rp60,000 per hour for cars and Rp15,000 for motorcycles, drawing commuter pushback. Trade & Exports: Indonesia shipped cultivated ornamental corals to the US, highlighting growing niche exports. Environment & Disaster Costs: A global report flags rising natural-disaster damage costs, with climate change intensifying extreme weather. Regional Cooperation on Haze: Singapore’s think tank says ASEAN needs stronger fire-fighting coordination, with Jakarta’s new haze center still not fully operational. Energy & Infrastructure Diplomacy: Indonesia and New Zealand discussed food security and renewable energy cooperation, including geothermal and solar.

Indonesia–Malaysia Haze Response: Indonesia confirmed it is coordinating with Malaysia on transboundary haze, starting with weather modification along border areas as air pollution hit hazardous levels in six locations, including Pekanbaru (ISPU 835) and multiple sites in Central Kalimantan. Central Banking & Markets: Wall Street ended mixed after the Fed’s new chair Kevin Warsh signaled rates may stay firm if underlying inflation doesn’t move fast enough. Digital Finance Push: SBI Holdings will buy a ~20% stake in Indonesia’s Ajaib Group for $270m, using its yen stablecoin JPYSC to expand stablecoin-enabled investing access for Indonesia’s retail market. Infrastructure for AI Connectivity: Telin eyes Africa and Latin America for subsea expansion, while RAIA Grid launched an 86,000-km open-access fiber platform to serve as Indonesia’s wholesale connectivity layer. Energy & Climate Risk: New research says El Niño events have grown about 40% stronger over the past four decades, raising the odds of harsher climate hazards. Corporate Earnings: IOI Corp reported higher FY2026 net profit (RM1.68b) on stronger resource-based manufacturing and plantations; Axiata’s 2Q net profit fell to RM42.52m amid revenue pressure. Geopolitics & Trade: BRICS leaders are set to adopt a supply-chain cooperation framework as Putin prepares for the SCO summit and major speeches at Russia’s Eastern Economic Forum.

Disaster Relief for MSMEs: Indonesia’s MSME ministry will disburse Rp3 million cash grants to micro businesses hit by late-2025 floods and landslides in Aceh, North Sumatra and West Sumatra, targeting 400,000+ affected entrepreneurs without active bank loans, with Rp600 billion allocated for 2026 and another Rp600 billion for 2027. Jakarta Transport Disruption: Jakarta rail and bus routes were suspended or rerouted after overnight unrest near the Parliament complex, following Thursday anti-corruption protests that included road blockages and attacks on police posts; authorities later said conditions returned to normal. Sustainable Finance Push: The Indonesia Stock Exchange launched the IDX Green Equity Designation, awarding inaugural status to three listed firms—two Green Equity and one Green Equity Transition—to improve transparency and access to sustainable financing. Tech & Capital Markets: Ajaib, Indonesia’s online trading unicorn, raised $270 million from Japan’s SBI Holdings, signaling continued foreign appetite for local fintech growth. Halal Economy Focus: BPJPH said halal value chains support about 27% of Indonesia’s GDP (Q3 2025), urging a shift from certification-only to broader production, trade, investment and competitiveness. AI Governance in Finance: Indonesia’s deputy communications minister warned that agentic AI entering finance needs rules now, covering authority limits, oversight, accountability and data security. Trade Expansion to Morocco: Indonesia flagged crude palm oil and frozen shrimp among key exports to Morocco as talks on an Indonesia–Morocco trade agreement target completion by 2027.

Forest-Fire Crackdown: President Prabowo ordered the revocation of business permits for firms suspected of ordering forest and land burning, warning authorities not to wait for hotspots and to act immediately with boreholes and village-level education as haze spreads to Malaysia and Singapore. Central Banking Leadership: Indonesia’s house panel endorsed Destry Damayanti as Bank Indonesia governor, setting up a key transition for monetary policy. Digital Finance Investment: Japan’s SBI Holdings plans to buy a 20% stake in Indonesia’s online broker Ajaib for about $270m, valuing the platform around $1.35bn and signaling renewed regional fintech appetite. Energy Transition Push: Indonesia’s geothermal sector remains underused—less than 12% of 23,000 MW potential tapped—while officials urged concession holders to accelerate development. Solar Ambition: Indonesia is moving ahead with new solar projects under its 100 GW plan, while Korea signals interest in technology and capital for the program. Market Watch: Palm oil futures in Malaysia fell for a third straight session on weaker exports and higher output expectations, with Indonesia’s Kalimantan fire risk still in focus. Tech Policy: Apple announced App Store tax and price updates affecting Indonesia and other countries, adjusting developer proceeds and storefront pricing. Protest Pressure: Thousands rallied in Jakarta demanding harsher anti-corruption penalties, with clashes reported as police deployed large numbers to secure the capital.

Digital Economy Push: Coordinating Minister Airlangga targets Rp40 trillion in transactions for Harbolnas 2026, up ~10% from last year, betting on video commerce and broader digital growth. AI & Infrastructure: The government says AI and data centers are key pillars for Indonesia’s digital economy, aiming to support 8% growth and create jobs for 600,000+ professionals. Investment & Decarbonization: BKPM says carbon capture and storage (CCS) can cut emissions in hard-to-abate sectors and boost Indonesia’s investment appeal, citing large CO2 storage potential. Critical Minerals Value: Indonesia’s nickel and cobalt reserves are valued at about US$800 billion (DEN), as downstreaming policies expand domestic processing. Forest Fire Response: The Forestry Ministry launches an online portal for public reporting to speed early detection and mitigation of forest and land fires. Labor Law Update: The manpower ministry says a new Manpower Law is aimed for completion by October 2026 to strengthen worker protection. Corporate/State Firms: Lawmakers warn PT Pos Indonesia must secure Rp158 billion in unpaid receivables to pay salaries on time. Trade & Markets: Nickel and cobalt headlines also come alongside broader market focus on AI-driven demand and global commodity volatility. Public Order & Politics: Thousands protest in Jakarta demanding stronger anti-corruption measures, including asset forfeiture.

Banking & Rates: Bank Indonesia governor nominee Destry Damayanti signaled policy continuity, telling lawmakers she would “keep carrying on the good policies” while pushing growth if confirmed. Digital Trade & Payments: ASEAN’s Digital Economy Framework Agreement (DEFA) is moving toward implementation, aiming for interoperable digital identity and trusted cross-border services. Social Media Regulation: Meta agreed to pay up to $16.68bn in a US settlement over claims it designed platforms to addict children, with mandated product changes for teen accounts. Indonesia Tourism & Aviation: Garuda Indonesia announced 170,845 free domestic seats to 33 destinations for international travelers, as Bali tackles overtourism pressures. Capital Markets & Macro Spillovers: Higher US yields are expected to lift Asian borrowing costs and pressure currencies, keeping central banks watchful. Energy & Industry: Geo Dipa and PTPN I will study using geothermal power for tea drying, targeting productivity gains and reduced fossil fuel/wood dependence. Environment & Risk: Indonesia is facing worsening haze from wildfires, with authorities tightening enforcement and sanctions on firms linked to fires.

Central Banking & Payments: Bank Indonesia’s Destry Damayanti, sole candidate for governor, told lawmakers she’ll boost cooperation without weakening BI independence, as investors watch autonomy and market transparency. Payments Tech: BI also explained the new KKI credit-card-like instrument as a payment deferral tool (not debt expansion) to complement wallets and cards. Energy & Infrastructure: President Prabowo launched Indonesia’s 100 GW solar program, aiming for 17 GW in the first phase and adding storage, with a 305 MW Bali project plus 1 GWh BESS starting construction. Food Security: The government said national rice reserves (CBP/Bulog) are at 5.1 million tons, enough to handle El Niño impacts and keep prices stable. FX & Commodities: The rupiah strengthened as oil prices fell on Middle East peace hopes. Trade & Industry: Indonesia tightened nickel rules and quotas, reshaping ties with China-based processors amid investment pushback. Business Expansion: FORTÉ acquired Vega Global to expand APAC pro AV reach, including Indonesia. Public Health & Environment: El Niño-linked haze from Borneo and Sumatra wildfires is putting 3.4 million people at respiratory risk, disrupting schooling and driving mask use. Law & Crime: Police uncovered an illegal gold smuggling network to Hong Kong and are hunting a suspected drug supplier to actor Revaldo.

Indonesia Wildfires Crackdown: Indonesia has charged 72 people over alleged forest and peatland fires across Borneo and Sumatra, as haze worsened and visibility reportedly fell to near-zero in parts of the region. Energy & Power: Prabowo kicked off a major solar push, launching 100 GW capacity targets and related projects, while Pertamina and PLN signed an LOI for 45 MW of geothermal power. Forest-Fire Policy: The government moved to revoke permits tied to companies linked to land burning and fires, signaling tougher enforcement. Indonesia–China Trade & Tech: Indonesia and China agreed to deepen bilateral cooperation, including more ambitious trade targets and expanded AI collaboration. Capital Markets: Advasa Holdings completed a direct listing on Nasdaq under ticker ADBT, adding another Indonesia-linked fintech story to regional deal flow. Regional Business Context: Copper prices neared record highs as tariff fears pushed traders to move metal into U.S. warehouses, tightening supplies elsewhere—an input-cost watch for Indonesia’s manufacturing and infrastructure pipeline.

Energy & Resources: DPR and East Kalimantan authorities plan to maximize Mahakam Block oil and gas output, focusing on continued exploration and higher lifting capacity to boost regional welfare. Haze & Wildfires: Indonesia is battling severe smoke from South Sumatra and other hotspots, with authorities deploying firefighting and cloud seeding, while Malaysia is allowed to use Indonesian airspace for haze mitigation. Forest Governance: The Forestry Ministry urges forest permit holders to upgrade wildfire safeguards, warning of negligence findings, as Indonesia targets companies linked to fires and seeks major restoration claims. Payments & Banking: Bank Indonesia launches Kartu Kredit Indonesia (KKI), shrinking credit card numbers but pushing domestic QRIS-based credit payments through participating banks. Digital Infrastructure: Asia-Pacific data centre values are forecast to top $950bn by 2030, with Indonesia among key capex markets as AI demand accelerates buildouts. AI Supply Chain: Taiwan indicts nine, including Nvidia and Super Micro staff, over alleged illegal AI server exports to China—another reminder of export-control pressure on the region’s tech trade. SME Finance: A new brief highlights how SMEs remain central to growth and jobs across BRICS economies, with financing access as a key lever. Business & Markets: Forbes Asia’s 100 to Watch list spotlights startups across APAC, including eight Indonesian entries, as investors chase early-stage tech and robotics themes.

Indonesia–China Ties: President Prabowo met China’s Wang Yi and Defense Minister Dong Jun in Jakarta, backing a new five-year action plan and pushing deeper cooperation on trade, AI, fishing, maritime work, and energy/minerals. Jakarta–Bali Finance Push: Indonesia is moving ahead with $28bn plans for international financial centers in Jakarta and Bali, with investors still asking for legal certainty. Battery Supply Chain: Malaysia and Indonesia launched lithium-ion battery cell collaboration at an ASEAN battery conference, aiming to tighten regional value chains. Wildfire & Haze Response: Indonesia arrested 72 suspects over forest and peatland fires as haze worsened into Malaysia; Prabowo ordered tougher action, while Malaysia discussed cloud seeding using Indonesian airspace. Aviation Firefighting Capacity: The transport ministry issued 35 permits for foreign-registered helicopters to speed aerial firefighting and disaster response. Energy & Gas Investment: NuEnergy started construction for its Tanjung Enim early gas sales initiative, targeting ramp-up toward commercial production. AI Hardware Trade Risks: Taiwan indicted Nvidia and Supermicro-linked figures over alleged illegal export of high-end AI servers to China, with Indonesia flagged as a possible pass-through market. El Niño Watch: Record ocean warming is already underway, raising risks for agriculture and food supplies across the region.

Commodity Market Infrastructure: Indonesia’s planned minerals and strategic commodity exchange will launch on Jan 1, with OJK chief supervisor nominee Sarjito saying the priority is “trusted” infrastructure—deep, liquid, orderly and integrity-backed trading—so traders actually rely on the market. Forest Fire Crackdown: President Prabowo ordered authorities to revoke permits of corporations linked to forest and land fires, warning no firm will be exempt and urging communities to clear land via government-supported channels instead of burning. Wildfire Response in Central Papua: Central Papua stepped up early detection and integrated patrols as El Niño dries conditions, with officials stressing prevention, hotspot mapping and public education to curb slash-and-burn practices. Haze and Enforcement: Indonesia named 72 suspects across nine regions in forest-fire probes as haze spreads to Malaysia, while authorities continue arrests and investigations. EV Funding Pulse: A report says Southeast Asia’s EV startups have raised US$622m since 2016, with Singapore leading both company count and capital share. Banking Reshuffle: Woori Bank cut 20 overseas branches in H1, including closures in Indonesia and Cambodia, pointing to profitability and asset-quality management over expansion. Health Policy Research: A new review highlights that low- and middle-income countries drive most cervical cancer deaths, urging system-level fixes like screening access, radiotherapy capacity and workforce training.

Forest-Fire Crackdown: Indonesia arrested 72 people suspected of starting forest and peatland fires as haze worsened across Borneo and Sumatra, with investigators tracing financial records that could implicate companies; suspects face up to 15 years in prison. Cross-Border Haze Diplomacy: The State Secretary said Jakarta is in contact with neighboring countries over transboundary haze impacts, while BNPB coordinates firefighting and monitoring as hotspots remain high. Firefighting Logistics Under Strain: BNPB flagged practical hurdles in Kalimantan, including dwindling water sources, difficult access roads, and strong winds that complicate helicopter water-bombing and ground operations. Regional Disaster Readiness: APEC officials met in Dalian to strengthen disaster preparedness, focusing on early warning, risk financing, anticipatory action, and community preparedness—relevant as climate-linked hazards intensify. Transport Tech Upgrade: Hitachi Rail won a contract to modernize MRT Jakarta fare collection at 13 Phase 1 stations, enabling contactless cards, QR e-wallets, and mobile QR tickets. Business Cash-Flow Stress: Atradius reported banking delays are a key driver of late payments for Indonesian firms, with 9 in 10 companies receiving overdue bills. People-First Health Push: Indonesian advocates urged community-led HIV and TB responses, arguing treatment alone won’t end stigma and access barriers. Trade & Connectivity Angle: Indonesia is also exploring cross-border maritime connectivity via a proposed Tiblawan Port in the Philippines’ BIMP-EAGA network.