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View all search resultsAn ambitious national plan to develop 100 gigawatts (GW) of solar power capacity has gradually evolved from an idea floated by President Prabowo Subianto into a program now moving toward implementation. In recent months, the initiative has gained clearer institutional backing, with state asset fund Danantara emerging as the main investment and financing vehicle tasked with mobilizing capital for rollout. The initiative is framed as part of efforts to strengthen energy self-sufficiency, one of Prabowo's key national priorities, particularly amid ongoing geopolitical tensions in the Middle East that could disrupt global energy supplies.
The interim freeze by MSCI on Indonesia’s February market status review has shaken the country’s capital market and triggered a wave of reform initiatives. Authorities quickly responded with measures including investigations into past fraudulent trading cases, new disclosure rules and plans to demutualize the Indonesia Stock Exchange (IDX). While these steps signal a stronger reform commitment, fundamental problems remain unresolved, undermining the role of Indonesia’s equity market as a source of long-term financing for economic growth.
The first batch of Indonesians evacuated from war-besieged Iran landed back home on March 11, after an overland journey that took them through Azerbaijan and Turkey before they were flown to Jakarta. Following this group of 22 people will be a few more batches in the coming days and weeks as citizens flee the ongoing United States-Israelis attacks.
Budget allocations for the free nutritious meal (MBG) program now dominate the education budget. A school feeding program that does not fundamentally serve a core educational purpose has instead become a primary focus within the government’s education spending framework. This shift raises significant questions about fiscal priorities and the long-term health of the nation’s pedagogical infrastructure.
The closure of the Strait of Hormuz amid the escalating Middle East war has disrupted global oil and gas shipments, driving up prices and exposing Indonesia to serious energy and financial risks. Around 25 percent of the country's oil imports originate from the Middle East and pass through the strait, while domestic fuel reserves can only last for around 20 days. With oil prices recently surpassing US$100 per barrel and the rupiah weakening to around Rp 17,000 per United States dollar, Indonesia now faces an additional layer of economic and energy security risk. The administration of President Prabowo Subianto is therefore under pressure to secure alternative supplies and stabilize domestic markets.
Fitch Ratings recently revised Indonesia’s sovereign outlook from stable to negative, although it maintained the country’s BBB investment-grade rating. Fitch highlighted global geopolitical tensions and President Prabowo Subianto’s free nutritious meal program as potential fiscal risks. While the government insists the massive free meals budget will remain and promises to maintain fiscal discipline, questions arise over whether fiscal policy is being designed primarily for economic stability and public welfare, or whether it is driven by political considerations.
Indonesia faces rising inflation during the Ramadan season every year, but inflationary pressures this year have been compounded by the government’s free nutritious meal program, pushing annual inflation to 4.76 percent. The situation may worsen as the ongoing United States-Israel war on Iran pushes up global commodity prices, particularly oil and gas, which could further fuel inflation in Indonesia.
Indonesia’s sovereign wealth fund Daya Anagata Nusantara (Danantara) marked its first anniversary in February 2026 with plans to invest US$26 billion in downstream projects, equivalent to 1.7 percent of gross domestic product. While the scale is significant, questions remain about its broader economic impact amid limited state-owned enterprise (SOE) reforms and uncertainty over the implementation of its investment plans.
The progress in the corruption case involving crude oil procurement at state oil and gas company Pertamina for the 2018–2023 period deserves appreciation. Yet this development may represent only the tip of the iceberg in Indonesia’s law enforcement efforts. The sentences handed down to the suspects are considered mild and lack deterrence effect, while the main actor behind the scheme remains elusive amid the recurring scandals surrounding Pertamina.
Indonesia’s official response to the attack on Iran by Israel and the United States is unusual to say the least. The Foreign Ministry in a statement said Indonesia deeply regretted the breakdown of the negotiations between the US and Iran, offered to mediate to break the impasse between the two countries, and added that President Prabowo Subianto had “stated his readiness to launch diplomatic visits straight to the heart of the conflict, if necessary”.
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