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View all search resultsClarity on DSI urgent
The Prabowo administration's sudden, vague overhaul of commodity exports is the latest policy whiplash rattling investor confidence, proving once again that ad hoc governance comes at a steep economic price.
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A worker arranges fresh fruit bunches (FFB) in a truck box on Oct. 29, 2025, in Topoyo, Central Mamuju regency, West Sulawesi. (Antara/Akbar Tado)
I
ndonesia has a knack for surprising investors with shock announcements that leave them puzzled about the rules of the industries they operate in, and the plan for centralizing commodity exports is one of the worst examples of this.
That was also true under former president Joko “Jokowi” Widodo, as seen in decisions to ban exports of coal and crude palm oil with virtually zero advance notice, while the announcements to end raw ore exports left mining firms scrambling to build smelters against timelines so tight, the government eventually realized it had to relent somewhat.
Many would argue the government of President Prabowo Subianto has taken this ad hoc regulatory approach one step further. Not only did its initial announcement on PT Danantara Sumberdaya Indonesia (DSI) take exporters by surprise, the top-level announcement was so scarce on details that it provided no solid basis for business players to prepare.
The Prabowo administration has also shown a willingness to walk back statements or changes in response to a strong market backlash, but by that point, the damage is already done to Indonesia regarding investment certainty and business continuity.
Publicly toying with the idea of lifting the budget deficit limit, currently set at a prudent 3 percent of gross domestic product, is another case in point. The government later affirmed repeatedly that the cap would not be relaxed, but discussing it at all raised questions about fiscal discipline.
Backtracking on decisions, or even reverting their implementation, only cleans up the economy’s facade to calm markets while doubts linger about the economic structure behind it, with repercussions for long-term, real investment in the country.
In a press release on Monday, Danantara gave itself a pat on the back for setting up an institution but failed to spell out DSI' eventual operational scope and ultimate purpose, specifically its commercial activities.
