Global coal oversupply and falling prices have prompted the Indonesian government to cut domestic coal production this year in an effort to stabilize the market. The move has raised concern among coal producers, who warn that smaller operational scales could reduce employment and non-tax state revenue (PNBP). At the same time, to secure coal supply for state-owned electricity company PT PLN, the government plans to increase the domestic market obligation (DMO). This dual pressure on producers raises an important question: will the production cut outlined in the 2026 annual work plan (RKAB) for the mining sector help restore prices, or will it create further challenges?

President Prabowo Subianto convened back-to-back meetings with key business leaders at his Hambalang residence in West Java on Feb. 9 and 10. He began with representatives of the Indonesian Employers Association (Apindo) before hosting heads of five of the country’s largest conglomerates the following day. The meetings were framed as efforts to strengthen government-business synergy and accelerate economic development. Yet they have also sparked questions about the political and economic calculus behind the outreach.

President Prabowo Subianto may be projecting himself globally and at home as a leader who is tough on corruption, not just in words but also in actions, with several high-profile corruption cases in his first year in office. But the business community is not impressed, and has even given the thumbs down to his overall anti-graft campaign.

Uncertainty continues to surround Indonesia’s latest trade breakthrough as President Prabowo Subianto and United States President Donald Trump prepare to formalize the Agreement on Reciprocal Trade (ART) on Thursday, following their attendance at the first US-led Board of Peace meeting a day earlier. The framework unveiled in July 2025 sets a 19 percent tariff on Indonesian exports to the US market, a rate the Indonesian government portrays as a major diplomatic victory despite its magnitude. Yet it remains unclear whether the July framework represents the final terms to be signed or whether negotiations are still unfolding behind closed doors.

Following the resignation of the Financial Services Authority (OJK) chairman and deputy chairman, the government has formed a selection committee to seek the best candidates to lead the OJK and restore investor confidence after market turmoil triggered by Morgan Stanley Capital International (MSCI)’s interim freeze of its February review of Indonesian stocks. The pressing question is whether any candidate will be capable of rebuilding market trust.

Once synonymous with controversy and stagnation, Meikarta has resurfaced on Indonesia’s national housing agenda. The government plans to repurpose the site for subsidized vertical housing for low-income households, with around 30 hectares (ha) of Lippo Group-owned land reportedly provided “for free”. The arrangement raises broader questions about transparency and whose interests the policy ultimately serves.

Several companies have come under scrutiny following global index provider MSCI’s decision to temporarily freeze Indonesia’s February review, citing concerns over market accessibility and transparency. In response to the announcement, the Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX) have stepped up due diligence and trading surveillance to address potential vulnerabilities. As this closer monitoring unfolds, it has brought renewed attention to sharp and unexplained price movements in several counters, most notably PT Sanurhasta Mitra (MINA), which had previously been flagged for unusual market activity.

On many occasions, President Prabowo Subianto has publicly stated that he welcomes criticism of his administration, emphasizing that governments require critical feedback, even when it is uncomfortable. Yet the situation on the ground suggests a paradoxical reality: criticism may be welcomed in rhetoric, but its public expression appears increasingly constrained.

While Indonesia has a multiparty democracy, the General Elections Law limits the number of political parties that can serve in the House of Representatives through an electoral threshold, which sets the minimum number of votes a party must win to gain a seat in the House of Representatives. In the 2024 general election, eight of the 18 contesting political parties met this threshold, one party fewer than the previous polls.

Indonesia’s economy grew 5.11 percent in 2025, slightly higher than 5.03 percent in 2024, but still below the government’s 5.2 percent target. Though the figure signaled resilience, it was quickly overshadowed by Moody’s decision to revise its outlook for Indonesia from stable to negative, citing governance concerns and policy uncertainty. The revision has renewed questions about the ambition of President Prabowo Subianto’s administration to reach 8 percent amid the country’s longer-term goal of becoming an advanced economy.

Defense Minister Sjafrie Sjamsoeddin stirred controversy after revealing that the Prabowo Subianto administration is considering a leadership reshuffle at state-owned banks, collectively known as the Association of State-Owned Banks (Himbara). The announcement was unusual, coming from a cabinet official whose portfolio centers on national defense. However, it reflects the increasingly visible role of the national security establishment in civilian, financial and economic affairs under the current administration.

The recent nomination of Golkar Party politician Adies Kadir by the House of Representatives to the Constitutional Court bench has ignited a long-standing debate regarding transparency, institutional encroachment and the potential erosion of judicial independence. As the court navigates an increasingly crowded docket of judicial reviews, the House’s selection process suggests a strategic shift toward prioritizing legislative discretion over constitutional oversight.

“When will you get married?”

As the government scrambles to shore up tax and excise revenues, a wave of corruption arrests targeting tax and customs officials has exposed deep governance problems within Indonesia’s revenue-collecting agencies. The Corruption Eradication Commission’s (KPK) recent raids have prompted Finance Minister Purbaya Yudhi Sadewa to carry out large-scale bureaucratic rotations at both the tax and customs offices. Yet questions remain over whether these measures can deliver lasting reform or meaningfully improve revenue collection.

The country’s long-running food estate ambition is entering a new and larger phase with the conversion of vast forest areas in South Papua into non-forest zones, or areas for other uses (APL). Initially framed as a strategy to achieve rice self-sufficiency, the program has now expanded under President Prabowo Subianto to also pursue energy security, with palm oil positioned as a key commodity to serve both goals.

The appointment of Thomas Djiwandono, a nephew of President Prabowo Subianto, as deputy governor of Bank Indonesia, has raised the specter of nepotism making a comeback in Indonesian politics. 

Morgan Stanley Capital International (MSCI) has temporarily frozen Indonesia’s February market status review and warned of a potential downgrade from Emerging Market to Frontier Market, citing persistent structural and governance weaknesses in the equity market. Key concerns include opaque ownership structures, limited disclosure of ultimate beneficial owners, and significant price distortions in several heavily weighted stocks, particularly conglomerate- and state-owned enterprise-linked names, which have pushed the Jakarta Composite Index (JCI) higher without corresponding improvements in fundamentals.

The National Police appear increasingly emboldened in their bid to consolidate power, as the House of Representatives signals growing support for the force despite persistent public demands for comprehensive reform. Even recent rulings by the Constitutional Court, intended to restrict active-duty officers from holding civilian posts, now seem likely to be circumvented by an unholy alliance of legislative and security interests.

After “greedynomics”, a new label has entered Indonesia’s political–economic vocabulary: “Prabowonomics”. The term made its global debut at the World Economic Forum, where President Prabowo Subianto presented it as the guiding framework for Indonesia’s economic trajectory. While narratives can be curated for international audiences, economic outcomes cannot be scripted. The central question is therefore not how persuasive the narrative sounds, but whether Prabowonomics reflects genuine structural progress or merely repackages ambition and political symbolism in the absence of measurable results.

The government’s decision to revoke 28 natural resource licenses in the wake of the deadly December 2025 floods in Sumatra has drawn praise from environmental activists but has also unsettled the private sector by introducing new regulatory uncertainty. Among the revoked permits was a gold mining license linked to Astra International, intensifying scrutiny from investors and businesses over the state’s willingness to cancel legally issued concessions in response to environmental externalities.

Since Jan. 20, the House of Representatives has been gathering input from academics and civil society groups regarding the proposed revision of the 2017 General Elections Law, formally submitted on Nov. 19, 2024. A central pillar of these discussions is the adoption of a "codification" approach, specifically, the consolidation of disparate election-related regulations into a single, unified political law package.

Beef retailers have gone on strike in protest over the rising price of live cattle set by feedlot operators. While the increase is partly attributed to supply losses caused by flooding in Australia, Indonesia’s largest source of imported cattle, the Agriculture Ministry suspects foul play among feedlot operators, alleging that they are maintaining elevated prices to secure higher margins. This comes as the government earlier this month slashed the private sector’s beef import quota from 180,000 tonnes last year to just 30,000 tonnes.

President Prabowo Subianto sprang another foreign policy surprise, or a blunder depending on how one looks at it, by joining the Board of Peace which United States President Donald Trump launched last week as part of his Gaza peace plan.

The government has set a 6 percent growth target for 2026, banking on accelerated public spending and tighter fiscal-monetary coordination to generate momentum, in line with President Prabowo Subianto’s ambition to lift economic expansion to 8 percent by the end of his term in 2029. The challenge, however, lies less in ambition than in execution: whether these policy tools can deliver real growth in an economy where household demand remains fragile and investment responses uneven.

The government is currently revising the subsidy scheme for the sea toll program amid concerns that it has fallen short of its objectives. Introduced by the administration of President Joko “Jokowi” Widodo, the program aims to improve national logistics connectivity and narrow price disparities between Western and Eastern Indonesia, where goods have been traditionally more expensive than on Java. After nearly a decade of implementation, however, price gaps have barely shifted, raising questions about the effectiveness of the subsidy.

The government is currently drafting the Bill on Prevention of Disinformation and Foreign Propaganda as part of President Prabowo Subianto’s efforts to contain potential threats to national political stability. However, the initiative risks undermining citizens’ right to access information, as such regulations are prone to elastic interpretations and potential abuse by law enforcement agencies.

The House of Representatives decision to select Thomas “Tommy” Djiwandono as a deputy governor of Bank Indonesia (BI) has reignited long-standing concerns over the central bank’s independence. His background as nephew of President Prabowo Subianto and a senior Gerindra Party official has contributed to negative market sentiment. While Tommy ensured the market that he would maintain BI’s independence, the controversy surrounding his nomination and swift confirmation risks undermining the central bank’s credibility and could adversely affect macroeconomic stability.