AGP Executive Report

Pancasila Economics Push: President Prabowo used Pancasila Day to argue Indonesia’s growth must be guided by religious, humane, unity and welfare values—not just GDP—citing nutrition, farmer support, fishermen market access and worker protections. Danantara Export Overhaul: Indonesia issued a presidential decree to expand Danantara Sumber Daya Indonesia (DSI) into a development investment arm under the sovereign wealth fund, while Finance Minister Purbaya said DSI’s centralized export proceeds reporting via CEISA 4.0 should curb under-invoicing and improve transparency, potentially lifting listed exporters’ profitability and dividends. Social Aid Data Reset: The government pledged to overhaul social assistance beneficiary databases after findings that a large share of aid recipients may be mistargeted, consolidating data under DTSEN to improve accuracy. Youth Social Media Crackdown (Malaysia): Malaysia began enforcing an under-16 social media ban with age verification for platforms with 8m+ users, with fines for non-compliance—joining Indonesia and other countries tightening online safety. Regional Market Signals (DBS): DBS said it will open 18 new wealth centres and upgrade 36 across Asia-Pacific by 2027, including Indonesia, as it targets affluent client growth with more face-to-face advisory. Geopolitics & Trade Risk: China conducted “law enforcement” patrols east of Taiwan amid Japan-Philippines maritime delimitation talks, adding to regional uncertainty.

Export Governance Overhaul: Indonesia will require natural-resource exporters to report export activities to PT Danantara Sumberdaya Indonesia (DSI) starting June 1, using the CEISA 4.0 system, beginning with coal, palm oil and ferroalloys; firms get a transition period while the government evaluates the first three months, with full rollout targeted by Jan 1, 2027—aimed at curbing under-invoicing, transfer pricing and export-proceeds leakage. FX Incentives: Finance Minister Purbaya Yudhi Sadewa said compliant exporters that place 100% of foreign exchange proceeds into the domestic financial system can receive 0% income tax incentives on the placement, with rules varying by commodity and holding period. Market Oversight: The IDX added PT Transcoal Pacific Tbk to the High Shareholding Concentration list after 94.1% of shares are held by a small group, while the exchange notes listing doesn’t automatically mean a rule breach. Trade Expansion: Indonesia expanded fishery export access to China after GACC approved eight more processing units, bringing the total to 638; 2025 exports to China hit 491,528 tons worth US$1.04bn. Tourism & Currency: Indonesia’s tourism ministry said a weaker rupiah could make the country more affordable for foreign visitors, supporting longer stays as promotions intensify.

Rupiah Pressure: The rupiah slid past Rp17,880 per US$ and some banks sold dollars above Rp18,000 as markets weighed global and domestic headwinds, with Trimegah Sekuritas noting BI’s 5.25% rate move helps signal stability but fiscal follow-through is key. Currency Supply & Tech: Indonesia’s SIM registration will start using facial biometric recognition from July 1, with Komdigi/Dukcapil verification targeted to take under a minute on average. Food Prices Watch: The Agriculture Ministry is monitoring live chicken prices after reports they fell below the reference Rp19,500/kg in several regions, meeting industry groups to stabilize farm-level pricing. Trade & Logistics Corridor: Indonesia’s Belawan, Penang and Perlis ports signed an MoC to create a shorter 388km route to move Sumatra commodities (palm oil, coffee, cocoa, tea) into northern Malaysia and beyond. Industrial Inputs: BASF began operating a new 2-ethylhexyl acrylate storage tank in Merak to boost supply reliability for downstream paints, coatings and adhesives. Regional Defence Deals: India’s Defence Secretary said a BrahMos deal with Vietnam is already signed and Indonesia’s pact is in final stages, underscoring India’s growing defence exports into ASEAN.

Indonesia–France Business Push: President Prabowo wrapped up a Paris visit and returned to Jakarta, after talks with Emmanuel Macron that produced four commercial deals worth US$3.5bn across energy security, trade and defense, plus a new France–Indonesia High-Level Business Council to deepen investment and downstream cooperation. Fuel Subsidy vs Currency Shock: Indonesia will keep subsidized fuel prices unchanged through year-end despite the rupiah’s historic slump, with officials citing secure stockpiles above minimum thresholds. Resource Nationalism Meets Investor Friction: Indonesia is tightening export controls and using state-linked marketing and FX deposit rules to capture commodity rents, while exporters signal exemptions and face regulatory bottlenecks and leakage concerns. Bulog Rice Export Pricing: Bulog says rice exports to Malaysia will be priced above Indonesia’s domestic ceiling to protect farmers and state revenue, with talks planned after Eid al-Adha. Digital Infrastructure Risk: A Sumatra blackout has raised alarms for Indonesia’s data center buildout, with industry urging PLN to improve grid reliability and publish transparent post-incident fixes. Palm Oil Export Probe Watch: Wilmar says it has not received formal notice in an alleged CPO under-invoicing/transfer-pricing probe, even as market sentiment wobbles. Health Tech Expansion: AstraZeneca and Roche Diagnostics plan to expand AI pathology for breast and lung cancer across nine Asian markets including Indonesia. Security Burden Sharing: At Shangri-La Dialogue, US Defense Secretary Pete Hegseth urged Indo-Pacific allies to raise defense spending to 3.5% of GDP, warning of a “clear shift” in how business is done with non-compliant partners.

Indonesia–France Talks: President Prabowo met France’s Emmanuel Macron at the Élysée Palace, with both sides pushing defense cooperation and reviving a long-stalled Indonesia–EU trade deal (IEU-CEPA), alongside a new France–Indonesia high-level business council. Renewables & Industry: Indonesia inaugurated key facilities in Batam for its first large-scale wind-to-electricity conversion project supporting the Tennet 2GW HVDC plan, with officials citing thousands of jobs during construction. SME Sustainability: ASEAN and East Asia business groups partnered to help SMEs adopt circular economy practices, including a “circular business check” tool piloted in Indonesia, Thailand and the Philippines. Trade & Commodities: Indonesia’s trade deficit widened as imports accelerated and exports slowed, while the government clarified that PT Danantara Sumberdaya Indonesia will not profit from the new CPO export centralization system during a June–Aug transition. Enforcement: Batam–Barelang police raided an online gambling center linked to a multinational network, seizing cash and funds and detaining suspects. Energy Planning: Indonesia is preparing land on Java for the 100 GW solar program, targeting an initial 17 GW phase with grid and substation readiness.

Rupiah & Rates Watch: Bank Indonesia’s surprise 50 bps hike to 5.25% is being read as an “emergency signal” as the rupiah slips past key levels, with foreigners returning via short-term SRBIs—though the inflow may be fast-moving “hot money.” Global Bonds: After a month of selling, foreign investors bought $4.28b of Asian local bonds in April, led by Indonesia, as a fragile Middle East ceasefire briefly eased stagflation fears. Labor Rights: A landmark ICJ advisory opinion says the right to strike is protected under UN and ILO conventions—relevant for 158 ratifying countries including Indonesia. Capital Markets: Merdeka Gold plans a June Hong Kong IPO, targeting $500m via depositary receipts, as issuers look for alternatives amid Indonesia market pressure. Halal Retail Expansion: Paris Baguette secured official halal certification in Indonesia, supporting its Southeast Asia rollout. Energy & Risk: Analysts warn Indonesia may face a “perfect storm” from fiscal strain, fuel-price pass-through to inflation, and renewed sovereign rating pressure. ASEAN Diplomacy: ASEAN leaders will meet Putin at a June summit in Russia, with Indonesia among members balancing ties across major powers. Corporate Moves: Woori Bank opens an Asia HQ in Singapore to coordinate corporate/investment banking across the region, including Indonesia.

Jakarta-Indonesia Business & Policy: Indonesia’s EV push gets a boost as the Industry Ministry brings automotive component SMEs into the EV supply chain, aiming for wider participation and knowledge transfer via partnerships with major players in West Java. Energy & Industry: Pertamina Patra Niaga adds nine million subsidized 3-kg LPG cylinders for Eid al-Adha demand, stressing distribution through authorized outlets to prevent panic buying. Renewables Manufacturing: Batam backs its first wind energy conversion project, positioning the city as an offshore wind fabrication hub tied to the Tennet 2GW HVDC project. Tourism & Trade: Indonesia Travel Fair 2026 targets 30,000 visitors and Rp60 billion in transactions, bundling discounted travel, umrah, and health tourism offers. Digital Economy & Sustainability: Indonesia warns that AI infrastructure, data centres and digital mining can strain water resources as demand for digital services accelerates. Regulation & Markets: OJK shuts down 951 lenders and warns of digital fraud, while Indonesia also moves to tighten rules around the digital economy. International Links: Prabowo begins a France state visit with Elysee ceremony, signaling cooperation on defense, clean energy, education and research. Capital Flows: ADB approves at least $50m into a Southeast Asia-focused private equity fund targeting mid-sized firms, including Indonesia.

Idul Adha Demand Hit: Livestock farmers across Indonesia report sharp sales drops ahead of the holiday as weaker purchasing power forces buyers to trade down to smaller goats; one East Jakarta farmer said sales fell up to 60% vs last year. Education & Regional Equity: Indonesia’s education ministry is renovating 39 schools in Southwest Papua (Rp20.1tn this year) to add classrooms and facilities, aiming to narrow learning gaps while boosting local jobs. Batam AI Data Center Workforce: The transmigration ministry says it is ready to supply qualified human resources for Batam’s planned Rp88tn AI data center investment, stressing job creation and skills training for locals and newcomers. Commodity Control Watch: Indonesia’s export centralisation push is drawing scrutiny as regulators probe suspected under-invoicing and transfer pricing in palm oil exports; Wilmar shares slid after reports it is among firms investigated. Rupiah Under Pressure: The rupiah hit record lows and is the worst-performing Asian currency this quarter as investors shift toward short-term debt amid US-Iran war-driven market stress. SME Skills in Papua: Indonesian consular-led training in Jayapura helped SME “mamas” from West Sepik learn Indonesian-style cooking using local ingredients to start or grow food businesses. Global Order & Aid Debate: A broader discussion on how aid cuts and shifting development finance are reshaping the global south’s economic prospects is gaining attention.

Indonesia–Palm Oil Probe: Indonesia is investigating Musim Mas and Wilmar over alleged export under-invoicing, adding pressure on the palm oil supply chain as prices react to crude and production swings. FX & Rates Watch: Indonesia’s rupiah weakness is still driving policy focus, with Bank Indonesia tightening FX rules and markets watching how energy-price pressure could keep inflation risks elevated. Commodity Policy Shift: Indonesia is moving to tighten control over critical commodities and exports, with Danantara positioned as a “listen to market” export body—an approach that could reshape trading flows. Energy & LNG Deals: Eni and Petronas’ SEARAH JV is projected to generate major upstream earnings by 2030, while Eni also signed long-term LNG supply agreements in Indonesia. Digital Infrastructure & Cloud: Amazon says it will invest over US$33bn in Southeast Asia cloud and AI through 2039, with Indonesia among key markets. Tourism & Business Links: Indonesia and Malaysia held a joint palm oil engagement programme in Serbia, while Indonesia’s Eid al-Adha livestock surplus was reported by the ministry. Regional Risk Backdrop: MUFG flags “super” El Niño, high US rates, and domestic policy uncertainty as a combined risk for Asia, explicitly naming Indonesia.

Rupiah & Budget Credibility: Indonesia’s finance minister says the government won’t redo the state budget even as the rupiah slides to around 17,800 per US dollar, citing scenario simulations and bond buybacks to keep yields manageable. Fuel Demand Control: A one-day-a-week work-from-home rule is credited with cutting subsidized Pertalite use by nearly 9% in April–May, and the policy is set to run longer into July. Markets Watch: Asia trades mixed as hopes for a US-Iran Hormuz deal lift oil off highs, while tech leads and energy lags. AI Governance: Indonesia pushes for “responsible AI” that protects society and democracy, while also backing public protection in AI development. Critical Commodities State Role: Danantara’s new export arm (DSI) is set to start as an intermediary from June 1, then move toward trading in 2027 for coal, CPO and ferroalloys. Prediction Markets Clash: Trump backs CFTC control as US states and courts fight over whether prediction markets should be treated as gambling. Connectivity Upgrade: Biznet and Ciena expand 400G submarine capacity across Java, Sumatra and Bangka.

Polymarket Crackdown: Indonesia moved to block Polymarket after the platform took bets on Prabowo’s presidency exit, with officials calling online gambling illegal and warning users against speculation on inconclusive events. Local Currency Push: The Industry Ministry urged firms to pay more raw-material imports in rupiah to cut dollar exposure, noting about 24% of inputs still come from abroad. Trade Misinvoicing Hunt: Finance Minister Purbaya said sanctions are being considered for 10 companies suspected of under-invoicing, with investigations focused on CPO-linked exports routed via Singapore. Macro Snapshot: BPS kept the Q1 growth picture steady at 5.61% y/y, led by consumption and investment, while government spending accelerated. Environment & Tourism: A new study warns scuba tourism is damaging coral reefs in Indonesia and the Philippines, while South Africa reported tourism supporting 954,000 direct jobs—an echo of how travel can drive employment. Defense & Industry: PT PAL entered pre-production for Indonesia’s Scorpene submarine build, and Thales delivered the first GM403 air surveillance radars to expand air monitoring.

Corporate Finance: JOYY posted Q1 2026 results with revenue up 12.4% YoY to US$555.7m, alongside a new US$600m buyback plan and a dividend program. Digital Infrastructure: Biznet activated Ciena WL5e on its BNCS-1 submarine link to deliver 400G connectivity across Java, Sumatra and Bangka. Banking M&A Watch: MUFG is reportedly weighing options for its near-majority stake in Bank Danamon Indonesia, including a take-private or stake sale to lift free float. Policy & Markets: Indonesia blocked Polymarket, citing online gambling rules after bets tied to Prabowo’s early exit. Trade & Risk: LPEI expects export-failure insurance demand to rise as deals shift from letters of credit to telegraphic transfers. Food Security Ahead of Eid: Coordinating Minister Zulkifli Hasan inspected cheap-market operations, selling 5-kg rice packs at Rp50,000 to curb holiday price spikes. Energy/Climate: Indonesia expanded its forestry carbon market under new regulation aimed at simplifying trading and boosting high-integrity credits.

Wildlife Crackdown: Indonesia arrested a suspect over a 3.05-ton pangolin-scale smuggling attempt to Cambodia via Tanjung Priok, with documents allegedly masking the shipment as “cucumber fish” and “dried food,” as authorities widen the network hunt. Digital Governance: Indonesia blocked Polymarket, calling it illegal online gambling after bets tied to Prabowo’s presidency drew attention, and said it is reviewing linked social accounts. Energy & Markets: Oil slid and Asian stocks rose on hopes of a US-Iran Hormuz deal, while Asia’s thermal coal imports are still climbing toward a record May, even as costs rise. Power Infrastructure: Batang Toru hydropower in North Sumatra is still operating after late-2025 floods damaged towers, with permits and relocation work underway. Trade & Food: Sri Lanka will offer free 30-day on-arrival visas to tourists from 40 countries (including India) but still requires an ETA; meanwhile Indonesia pushes shrimp exports back to Saudi after permits were reopened. Policy Watch: Bank Indonesia says the latest BI-Rate hike won’t burden MSMEs if liquidity support holds.

Commodity Export Overhaul: Indonesia is moving from policy talk to execution on a new centralised export agency, with the Trade Ministry saying global partners should get updates “within weeks” as Danantara Sumberdaya Indonesia is set to take over strategic exports starting June 1, beginning with palm oil, thermal coal and some nickel products—exporters will have to report sales to the state entity. Digital Governance: Indonesia’s deputy communications minister Nezar Patria warns algorithm dominance is creating “digital colonialism,” urging youth to boost digital literacy to resist misinformation and polarization. Banking Deal: SMBC Indonesia is selling a pensioner and pre-pensioner retail loan portfolio worth IDR19.93tn (about $1.13bn) to BTN, reshaping consumer credit books. Macro Pressure: A Japanese consumer-goods firm flags “vicious” stagflation risks for Indonesia as currency weakness meets higher inflation from the Iran war. Fraud Crackdown: OJK is building a National Fraud Portal to speed up reporting, transaction tracking and coordination against illegal online lending.

Energy Shock Spillover: Indonesia’s latest move to centralize key commodity exports under Danantara is now being watched closely for knock-on effects on coal-dependent power planning across the region, as global oil and gas volatility keeps supply chains jittery. Digital Security as Public Safety: A new wave of ransomware coverage frames hospital attacks as “violence by keyboard,” spotlighting how downtime can delay care and endanger lives. Cybercrime Meets AI: CrowdStrike’s latest financial-services threat report warns DPRK-linked actors are scaling theft with AI-enabled deception, with digital asset losses hitting record levels. Regulation Clash: Indonesia’s plan to fold ride-hailing into marketplace-style rules is drawing industry pushback over one-size-fits-all compliance burdens. Algorithm Dominance: Indonesia’s digital affairs deputy minister calls algorithmic control a new form of colonialism, warning of polarization and misinformation risks for youth. Disaster Readiness: BNPB, Australia’s DFAT and Andalas University are partnering on Sumatra megathrust and hydrometeorological research. Public Nutrition Push: Indonesia’s free nutritious meals program now reaches 62.4 million beneficiaries, using thousands of local service units and suppliers.

Power Shock in Sumatra: Indonesia’s PLN says the Friday blackout was triggered by bad weather that destabilised transmission lines, with restoration in about two hours but coal plants taking 15–20 hours to fully restart—while separate incidents show the human cost: four deaths in North and West Sumatra linked to generator fumes. Free Meals Scale-Up: Indonesia’s MBG free nutritious food program has now reached 62.45 million people, with 29,225 kitchens serving 374,175 schools and distributing 8.3 billion meal portions since launch. Commodity Control Push: Indonesia is moving to centralise exports of key commodities via state control, aiming to curb losses and boost revenue—an approach that’s already rattling markets and raising producer margin fears. Global Finance Reputation: A crackdown on illegal online gambling by foreign nationals is being framed as a step to protect international financial standing. Trade and Investment Signals: Indonesia also continues downstream mineral processing, reporting 56 trillion IDR in non-tax revenue so far this year, as smelters come online. Local Life, Real Risks: A separate case highlights how sudden flight reschedules can leave travellers stranded and seeking compensation.