Prabowo Tackles Commodities, SOEs and Foreign Languages in Annual Speech
In a wide-ranging nearly two-hour state of the nation speech on Aug 14 delivered to the legislature ahead of Independence Day on Monday, President Prabowo Subianto said his administration is delivering on its promises despite setbacks and said he believe that 6 per cent GDP growth could be achieved this year.
At a time when his approval ratings are falling and investors remain skeptical of his populist approach to government, Subianto doubled down on a controversial policy to centralize commodity exports and said his drive to consolidate Indonesia’s sprawling state-owned enterprises from more than 1,000 to 300 would soon be complete.
An entity created this year, Danantara Sumberdaya Indonesia (DSI), will monitor the export of all strategic commodities from the three – palm oil, coal and ferroalloys – it currently oversees. "In the short term, DSI will manage all strategic commodity exports, not only three," the president said.
Following the speech, Bank Danamon analyst Irman Faiz said the government must "ensure that tighter oversight does not increase transaction costs for exporters or discourage private investment."
In the speech, the president also touted his plan to build 30,000 village cooperatives and said it would also be complete by the end of the year. “For the first time, the country will control its own supply chain, so we won’t be at the mercy of merchants who manipulate the market,” he said of the cooperatives.
Subianto’s government has struggled all year with a falling rupiah and a stock market that has performed badly. Issues like excessive government spending on showcase programs and concerns over central bank independence have worried investors.
In addition, his flagship free nutritious meals program has been hit by a corruption scandal, food poisoning cases, budget cuts and allegations of mismanagement.
Despite the troubles, Subianto said investment in Indonesia would continue to grow, and that GDP growth could reach 6 per cent by the end of the year.
Later in the day, the president was scheduled to deliver an address outlining the 2027 budget. The benchmark Jakarta Composite Index closed up slightly on the day to 6,369.38, a gain of 1.07 percent. Investors are keenly watching the 2027 budget for economic signs.
The president said that global supply chain disruptions mean that Indonesia should be as self-sufficient as possible and cannot rely on supplies from abroad if global conditions deteriorate.
He said in his speech that that the country has achieved self-sufficiency in eight food commodities and that the food supply was secure despite the threat of a lengthy El Nino dry weather pattern.
He also highlighted tighter control over other key sectors, including ordering a crackdown on widespread illegal tin mining.
Subianto called his plan to reduce Indonesia's SOEs to no more than 300 potentially the world's largest corporate restructuring. He said it was intended to guarantee that SOEs benefit the public rather than burden the state through losses, expensive management structures and generous executive perks.
In addition to commodities and SOEs, Subianto also instructed the government to introduce foreign-language learning in all schools from the first grade of primary school
He identified English, Mandarin, Arabic, Japanese, Korean, Spanish and French among the foreign languages he considers important.
"We will recruit the best teachers, including foreign-language teachers. Mastering foreign languages is absolutely essential," Subianto said.
Subianto also conceded that Indonesia had encountered problems during his term, but said they are being addressed.
"I cannot yet say that all the nation’s problems have been resolved, or that every promise I made has been fulfilled. Not yet," he said.
Related Links:
- https://www.reuters.com/world/asia-pacific/indonesias-prabowo-present-high-stakes-budget-plans-support-slips-2026-08-13/
- https://www.scmp.com/news/asia/southeast-asia/article/3363986/indonesias-prabowo-defends-record-touts-food-self-sufficiency-independence-day-speech
- https://jakartaglobe.id/business/indonesias-onegate-export-to-cover-all-strategic-commodities
- https://jakartaglobe.id/news/prabowo-orders-foreignlanguage-learning-from-first-grade
- https://www.thejakartapost.com/business/2026/08/14/prabowo-vows-to-crack-down-on-bad-soe-governance-directors?utm_source=(direct)&utm_medium=home_latest
Debt Pressure Spurs Danantara to Return SOE Dividends to State Budget
President Prabowo Subianto has instructed state asset fund Danantara to return part of the dividends it receives from state-owned enterprises (SOEs) to the state budget (APBN), as the government seeks to reduce debt pressures.
Finance Minister Purbaya Yudhi Sadewa said the policy is to take effect this year and is being coordinated with Danantara. “There is an idea from the President to place a portion of Danantara’s profits into government reserves, which can help reduce our debt,” Purbaya said on Aug 12.
The move marks a partial reversal of last year’s policy, when SOE dividends were redirected to Danantara to support investment and business expansion. Before Danantara was established, SOE dividends were paid directly to the government, reaching Rp 86.4 trillion ($4.83 billion) in 2024.
Purbaya said the government would seek to improve revenue efficiency and utilize available income sources, including returns managed by Danantara. He added that the government still held around Rp 400 trillion in its state budget balance.
The policy comes as government debt reached Rp 10.29 quadrillion in June 2026, equivalent to 41.26 percent of GDP. Purbaya stressed that the figure remains below Indonesia’s statutory debt ceiling of 60 percent of GDP. Danantara continues to receive government support, including potential tax relief of up to Rp 500 trillion for SOE consolidation activities over the next three years.
Permata Bank Chief Economist Josua Pardede said the approach could help balance Danantara’s investment mandate with the government’s fiscal needs.
“What is needed is a balanced distribution – not having all dividends go into the state budget as in the old model, but also not retaining them entirely for investment without a clear fiscal contribution mechanism,” Josua said on Aug 13.
Center of Reform on Economics (CORE) Strategic Research Manager Yusuf Rendy Manilet warned that excessive dividend transfers could reduce Danantara’s investment capacity and called for clearer rules governing its mandate.
“Conversely, if fiscal needs remain the priority, transferring dividends to Danantara from the outset becomes less effective because it merely adds another layer of management and governance,” Yusuf said.
Related Links:
- https://www.thejakartapost.com/business/2026/08/13/govt-to-reroute-danantara-dividends-back-to-state-budget
- https://ekonomi.bisnis.com/read/20260813/9/1995989/dividen-bumn-kembali-ke-apbn-barter-dukungan-antara-pemerintah-dan-danantara
- https://nasional.kontan.co.id/news/pemerintah-minta-sebagian-dividen-bumn-kembali-ke-apbn-untuk-bantu-beban-utang
Gov't Mulls Increasing Visa on Arrival Fee
Indonesia is considering raising its Visa on Arrival (VoA) fee from Rp 500,000 ($28) to between Rp 750,000 ($42) and Rp 1 million ($56), with rates potentially differentiated between online and on-arrival applications.
Director General of Immigration Hendarsam Marantoko said the current fee is considered too low given exchange-rate movements.
“Our Visa on Arrival only costs Rp 500,000. Given the fluctuations in our exchange rate, we feel this is too low and therefore needs to be adjusted,” Hendarsam said during a press briefing on Aug 12.
He added that the proposed structure would encourage greater use of the electronic Visa on Arrival (e-VoA) system to reduce congestion at airports. Officials have not yet announced when the new fees will take effect.
The Directorate General of Immigration recorded Rp 6.5 trillion in non-tax state revenue from immigration services as of Aug 10 and is targeting Rp 8.5 trillion for 2026.
Between January and July, immigration authorities issued 4.88 million e-visas, including 4.32 million e-VoAs, 53,347 limited-stay visas (VITAS), 440,807 Visit Stay Permits, 131 Golden Visas, 61,687 visa-exempt entries, and 53 Global Citizen of Indonesia (GCI) visas.
Under current rules, a VoA allows foreign visitors to stay in Indonesia for 30 days and can be extended once for another 30 days.
Related Links:
- https://jakartaglobe.id/news/indonesia-plans-to-double-visa-on-arrival-fee-to-rp1-million
- https://travel.kompas.com/read/2026/08/13/180000027/tarif-visa-on-arrival-indonesia-bakal-naik-wna-bayar-lebih-mahal
- https://www.cnnindonesia.com/nasional/20260813070020-20-1391669/imigrasi-bakal-naikkan-tarif-visa-on-arrival-hingga-rp1-juta
CEO for a Day Indonesia Empowers Young Women
Sixteen young women from across Indonesia came together with women CEOs, senior business leaders, government representatives and United Nations officials on Aug 12 for “CEO for a Day Indonesia: Women Shaping Tomorrow Leadership Forum,” marking the culmination of a mentorship program aimed at inspiring young women leaders.
Held at Sinarmas Land Plaza in Jakarta in conjunction with International Youth Day, the forum was jointly organized by the United Nations in Indonesia, AmCham Indonesia Women Network and UN Global Compact Network Indonesia (IGCN).
The Forum featured participant testimonials, a leadership discussion, a recognition ceremony and an interactive “Ask the Leaders” session. During the interactive session, participants met with senior women leaders in small groups, discussing career development, leadership challenges, mentorship and resilience.
Launched in June, CEO for a Day Indonesia was designed to give young women aged 18-25 first-hand exposure to leadership and decision-making while connecting their interests and contributions to the UN Sustainable Development Goals (SDGs) with women leaders from the private sector and the United Nations.
AmCham Indonesia Works to Strengthen IP Enforcement
AmCham Indonesia’s Intellectual Property and Trade and Logistics Committees convened a joint meeting, “Combatting Counterfeit: Strengthening Enforcement and Public-Private Collaboration,” on Aug 13. Government and industry stakeholders came together to discuss strengthening intellectual property (IP) enforcement in Indonesia.
The session featured R. Tarto Sudarsono, Head of the Cross-Border Crimes II Section at the Directorate General of Customs and Excise (DGCE); Ahmad Rifaldy, Head of the Subdirectorate for Enforcement and Investigation at the Directorate General of Intellectual Property (DGIP); and Fauzan Azka Fajrianto, Senior Counsel at Procter & Gamble (P&G) Indonesia. The session was moderated by Devi Kusumaningtyas, Government and Public Affairs Director for Indonesia, India and Malaysia at Nike.
Speakers explored customs recording and border enforcement, IP reporting and enforcement mechanisms, and industry experiences in combatting counterfeit goods. The session also highlighted challenges faced by rights holders, including access to recording mechanisms, enforcement procedures, online counterfeiting, and the need for stronger coordination and information sharing between the public and private sectors.
Nies Purwati, Senior Director of Government Affairs, Southeast Asia & Pacific at Qualcomm and Chair of the Intellectual Property Committee, delivered closing remarks emphasizing the importance of continued government-industry dialogue to follow up on the issues raised and identify practical solutions.
AmCham Indonesia extends its appreciation to Nike Indonesia for hosting the meeting and to all speakers and participants for their active engagement. AmCham remains committed to facilitating public-private collaboration toward stronger and more effective IP enforcement in Indonesia.
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Update is AmCham’s regular newsletter on developments related to investment, the economy, regulations and issues related to doing business in Indonesia. It comes out three times a week. It is edited by AmCham Managing Director Donna Priadi and written by the AmCham Staff.
