ASEAN has come under heavy criticism for its failure to prevent war from erupting between Thailand and Cambodia, with a part of that blame leveled at Indonesia as the largest member of the regional group. The paralysis of ASEAN reveals the limits of diplomacy when it comes to resolving territorial disputes between members. Not surprisingly, Indonesia has not done much beyond appealing for restraint.

In a shocking twist to end the month, President Prabowo Subianto has decided to give legal clemency to both the secretary-general of the Indonesian Democratic Party of Struggle (PDI-P), Hasto Kristiyanto, and former trade minister Thomas ‘Tom’ Trikasih Lembong for their respective graft convictions.

Danantara has secured a staggering US$10 billion in unsecured credit lines from 11 foreign banks and $7 billion in equity investments from sovereign wealth funds (SWFs), a remarkable feat for an institution that is less than six months old. Yet its rapid rise raises an important question: Is Danantara truly operating as a SWF to secure long-term prosperity for future generations, or is it functioning as a super holding company to execute President Prabowo Subianto’s ambitious programs?

Indonesia's political elite are once again pushing to alter the system for regional head elections (Pilkada), currently conducted through direct public voting. The proposed changes aim to shift the authority to elect local leaders back to regional legislative councils (DPRD) or even allow for direct presidential appointments. However, these discussions appear less like well-reasoned policy debates and more like atempts to gauge public reaction.

Indonesia is making bold moves on both the monetary and trade policy fronts—cutting its benchmark interest rate by 25 basis points to 5.25 percent and finalizing a landmark trade agreement with the United States. The deal eliminates 99 percent of Indonesia’s trade barriers on US industrial and agricultural products, lowering the US tariffs on Indonesian imports from 32 percent to 19 percent.

The resurgence of global trade uncertainty under United States President Donald Trump’s second term has prompted Indonesia and the European Union to resolve long-standing disputes and accelerate the conclusion of negotiations on the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU-CEPA), aiming to finalize the deal by September. However, significant hurdles remain, particularly Indonesia’s compliance with the EU’s anti-deforestation regulations.

Former president Joko "Jokowi" Widodo and the Indonesian Solidarity Party (PSI) have formed an alliance that aims to advance their respective interests in elite politics. While the PSI seeks to secure seats at the House of Representatives in the next general election, Jokowi appears to be carving out a political role so he can continue to wield influence after his presidency, particularly after he was dumped by his former party, the Indonesian Democratic Party of Struggle (PDI-P).

The deal on tariffs between Indonesia and the United States, as announced by President Donald Trump last week, has put Indonesia on the good side of Washington, shifting its position in the current big power rivalry away from China, at least momentarily.

The government has pressed ahead with launching the Red and White Rural Cooperative (KDMP) as President Prabowo Subianto’s latest flagship economic initiative, despite the ongoing deliberation of the Cooperatives Law revision at the House of Representatives. July 21, 2025, witnessed the inauguration of 80,081 KDMPs nationwide with an aim to spur grassroots economic growth. However, the program’s design, which leverages village funds as collateral, poses risks not only to state finances but also to the broader goals of sustainable rural development.

Before the final verdict and sentence were handed down on July 18 in the sugar import graft trial, many had hoped the Jakarta Corruption Court would deliver a just decision. This did not turn out to be the case, and Thomas “Tom” Trikasih Lembong was convicted and handed a penalty of four years and six months in prison and a fine of Rp 750 million (US$46,000).

The deal’s agricultural component has drawn strong backlash, particularly from local dairy and poultry egg producers that are already struggling to compete with the scale and efficiency of US agribusiness.

The Constitutional Court's recent landmark decision to separate national and regional elections has created significant implications for legislatures, particularly the House of Representatives. In Decision No. 135/PUU-XXII/2024 issued on June 26, the court mandated that starting in 2029, national elections for president, vice president and members of the House and Regional Representative Council (DPD) are to be held 2 to 2.5 years prior to the elections for regional legislative councils (DPRD) and the heads of provincial, municipal and regency administrations.

The first phase of Nusantara Capital City (IKN) development has officially concluded, with the IKN Authority confirming it will receive Rp 48.8 trillion (US$3 billion) from the state budget to continue the project’s second phase through 2028. Although President Prabowo Subianto initially pledged to begin working from IKN starting August 2028, uncertainty looms, as he has yet to demonstrate genuine interest in relocating the nation’s capital.

Nine months into his job, Vice President Gibran Rakabuming Raka has finally been given a specific assignment: Oversee the acceleration of development in Papua, Indonesia’s easternmost region that is both resource-rich and among the most impoverished.

The Corruption Eradication Commission (KPK) has uncovered a large-scale corruption case involving Bank Rakyat Indonesia (BRI), one of the country’s largest state-owned lenders. The scandal, estimated to involve hundreds of billions of rupiah, pertains to the procurement of electronic data capture (EDC) machines and implicates several former BRI executives. The case not only raises concerns about accountability within state-owned enterprises (SOEs) but also threatens to erode public trust in the financial sector, where SOEs play a dominant role.

After five months of intense speculation, Muhammad Riza Chalid, dubbed the “godfather of oil”, has been named as a suspect by the Attorney General’s Office (AGO) for his alleged role in a colossal Rp 285 trillion (US$17.4 billion) graft case. The scandal implicates subsidiaries of state-owned oil and gas holding company Pertamina as well as third-party contractors.

Indonesia’s economy is clearly losing momentum, with key indicators pointing to a broader slowdown. Economic growth dropped to 4.87 percent in the first half of 2025, down from 5.08 percent in the same period last year. In response, the government has introduced a series of stimulus packages to boost household spending but the measures may fall short, as both investment and business activity continue to weaken.

Two major Indonesian securities firms, NH Korindo Sekuritas and Trimegah Sekuritas, fell victim to cyberattacks in May. NH Korindo managed to fend off the attack before any funds were withdrawn, limiting the damage to operational disruptions. Trimegah, however, wasn’t as fortunate. Losing an estimate of Rp 200 billion (US$12.3 million) from the breach.

An Indonesian national, identified by the initials AP, was arrested in Myanmar for illegally entering the country and engaging with the Karen National Union (KNU), an armed group designated as a banned organization by local authorities.

When a mob rampaged through Maria Veronica Nina’s villa in Sukabumi, West Java, she would have had every right to feel vengeful for the hate crime committed against her property.

State-owned palm oil producer PT Agrinas Palma Nusantara, established just last March through a spin-off from a state-owned construction firm to refocus on the agriculture sector, has unexpectedly restructured its board of directors (BoD) and board of commissioners (BoC). The leadership shake-up comes as the company carries a mandate to manage illegal palm oil plantations seized by the government. The confiscated land, which spans hundreds of thousands of hectares (ha), was taken from companies found to have violated laws such as the Forestry Law, including several prominent palm oil firms also active in downstream production.

President Prabowo Subianto’s choice of a senior bureaucrat to be Indonesia’s new ambassador to the United States is somewhat anticlimactic, casting doubts on whether he has picked the right person for the right job, and at the right time.

The Trade Ministry has rolled out a wide-ranging regulatory reform package aimed at easing import restrictions and cutting red tape, in a bid to revitalize the manufacturing sector, respond to global trade pressures amid United States (US)’ tariff hikes, and bolster Indonesia’s competitiveness as it eyes membership in the Organisation for Economic Co-operation and Development (OECD).

Indonesia is banking on a suite of large-scale electric vehicle (EV) battery projects, Dragon, Titan and Omega, to reverse the country’s manufacturing slump, slash fuel imports and secure a strategic place in the global EV supply chain. At the heart of this national push is the US$5.9 billion Dragon project, recently inaugurated by President Prabowo Subianto, which aims to build an end-to-end nickel-based battery ecosystem anchored by partnerships with Chinese EV battery giant Contemporary Amperex Technology Co. Limited (CATL).

Holding general elections for a country the size of Indonesia is always a huge and complicated undertaking. The country is constantly struggling to find the most cost-efficient way of running multiple elections at the national and regional levels, but “effective” is never a goal as long as the electoral laws are drawn up by big political parties more interested in protecting their interests than ensuring people’s democratic rights.

The Attorney General’s Office (AGO) has struck a significant agreement with major cellular service providers in Indonesia, granting it access to users’ private information for law enforcement purposes. While the reasons for the deal look convincing, the development raises serious concerns about potential violations of fundamental citizen rights and may conflict with a Constitutional Court ruling regarding surveillance and wiretapping.

Public Housing and Settlements Minister Maruarar “Ara” Sirait took many by surprise when he announced that Daya Anagata Nusantara (Danantara) Investment Management Agency would finance one of President Prabowo Subianto’s flagship campaign promises: the construction of 3 million subsidized homes. Danantara has pledged a loan of Rp 8 trillion (US$ 138 million) for the project. With this move, earlier plans to finance the program through foreign loans were effectively shelved.

North Sumatra Governor Bobby Nasution consistently attracts negative press. The 33-year-old Gerindra politician and son-in-law of former president Joko "Jokowi" Widodo may soon be questioned by the Corruption Eradication Commission (KPK) after his close aide was arrested in a recent graft scandal in the province.

Sovereign wealth fund Danantara is embarking on an ambitious overhaul of state-owned enterprises (SOEs), aiming to consolidate 844 SOEs and their subsidiaries into around 200 entities. As the fund moves forward with its major consolidation plan, questions about investment returns, governance and long-term strategy remain front and center.

Indonesia’s position in the World Competitiveness Ranking (WCR) has dropped significantly, according to the World Competitiveness Yearbook (WCY) 2025, released in June by the International Institute for Management Development (IMD). The annual ranking evaluates 69 economies using global, regional, and national statistics, as well as surveys of corporate executives. The report highlights Indonesia’s sharp decline across key competitiveness indicators, amid ongoing economic headwinds.