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View all search resultsIndonesia’s dangerous gamble with defactualization of public life
While political rhetoric and insider deals create a comfortable narrative in Jakarta, global markets are marking that reality to market—and forcing a weakening rupiah to pay the bill.
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National Police Chief Gen. Listyo Sigit Prabowo (right), and Attorney General St. Burhanuddin exchange a handshake after a meeting on July 13 at the Attorney General's Office in Jakarta. The meeting was held as part of efforts to strengthen ties between the National Police and the Attorney General's Office and to enhance cooperation among law enforcement agencies. (Antara/Fah/Nadia Putri)
E
very economy runs on a currency, and Indonesia these days runs on two. One is the rupiah, which spent early 2026 sliding toward 18,000 to the United States dollar even as the economy expanded at a healthy clip above 5.5 percent. The other is discretion: the power to grant a coal quota, waive a tax audit, seize a plantation or quietly reclassify a corruption suspect as a "witness". The second currency is thriving. The first, as markets have keenly noticed, is paying for it.
Hannah Arendt had a term for this phenomenon. In "Lying in Politics," her 1971 essay on the Pentagon Papers, she described what occurs when a government stops answering to facts and begins answering strictly to its own narrative model. She called it the defactualization of public life.
The modern political lie, she argued, is not merely the hiding of a secret; it is the deliberate manufacture of a substitute reality, run by problem-solvers so enamored with their models that stubborn facts become mere nuisances to be managed. Her villains were not cynics—they were believers, Robert McNamara’s "clever men", who deceived themselves long before they set about deceiving the public.
Consider the scenario currently playing out in Jakarta. In this version of reality, Indonesia grows at 8 percent, food security flourishes from a million-hectare estate in Papua and patriotic capital flows precisely where the palace points. The leading man is Andi Syamsuddin Arsyad—better known as Haji Isam—a coal magnate from Kalimantan who, as Bloomberg reported, funneled several hundred million dollars into President Prabowo Subianto’s 2024 campaign.
You will not find that figure in any public filing. Indonesian election law conveniently keeps donor identities confidential; thus, the single most consequential fact about the presidency—who financed it—is not technically a fact at all.
Haji Isam’s rewards have been remarkably generous: a vast national food estate to oversee, a requested coal quota nearly double that of the previous year, a license to operate the country’s second cryptocurrency exchange (the first was awarded to the President’s brother) and the second-highest civilian honor in the land.
Indonesia's established, largely ethnic-Chinese conglomerates are enduring a markedly different year. They face aggressive land seizures, back-tax demands and "warm invitations" to purchase Patriot bonds at below-market yields—an instrument that is neither particularly patriotic nor truly a bond, but rather functions like a tithe with a coupon attached.
