AmCham Update Vol. 7 #062

Indonesia’s Free Lunch to Get Full Audit, Purbaya in China to Sell Indonesia’s Panda Bond, Rosan says Investor Confidence is Back, Gibran Meets with Student Protesters, Jokowi Tour to Launch in Late June

Jun 17, 2026

Indonesia’s Free Lunch Program to get Complete Audit

The Indonesian government’s ambitious but troubled Free Nutritious Meals (MBG) program will be suspended during the coming school holiday as the National Nutrition Agency (BGN) conducts a nationwide audit of all kitchens under the program.

The review is part of a broader restructuring under BGN's new leadership following the embarrassing dismissal and arrest of the former head.

BGN Deputy Head Agustina Arumsari said the holiday period would be used to improve operations before students return to school. “We will use this window to audit all kitchens, focusing on food quality, safety standards, and operations so conditions are better and more orderly when students return to school,” Agustina said after meeting lawmakers on June 16.

BGN also plans to map beneficiary data to prioritize vulnerable groups, chiefly pregnant women, breastfeeding mothers, toddlers and young children. Officials say it could reduce the number of beneficiaries by around 8 million people, consolidate some kitchens and lower the program's 2027 budget requirement, currently estimated at Rp 270.2 trillion ($15.2 billion) for around 81.5 million planned beneficiaries.

The program has been hit by thousands of cases of food poisoning and the recent arrest of its leader, Dadan Hindayana, and two deputies over corruption allegations linked to kitchens and procurement.

Responding to calls for BGN to be discontinued, Agustina said offficials would continue implementing President Prabowo Subianto's mandate while improving governance. The program was a central promise of Subianto’s campaign for the presidency.

“We are focused on improving BGN to ensure this well-intentioned program is implemented more effectively and reaches the right beneficiaries,” said Agustina, adding that criticism of the program is legitimate in a democracy.

Since the program’s rollout in 2025, over 21,000 students nationwide have experienced food poisoning linked to MBG, according to civil society coalition the Indonesian Education Monitoring Network.

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Purbaya in China to Sell Panda Bond

Finance Minister Purbaya Yudhi Sadewa will meet with Chinese investors and his Chinese counterpart, Lan Fo'an, during a visit to Beijing this week as he seeks to move forward with the yuan-denominated Panda bond. He left for Beijing on June 16.

The trip comes shortly after Chinese companies in Indonesia complained publicly about a deteriorating business climate and unfair treatment of foreign investors in the country.

But Panda bonds are his main agenda, according to a statement from the finance ministry on June 17.

Purbaya is scheduled to meet with Lan on June 17 and he will also meet with business leaders and officials from the People's Bank of China, the Shanghai Cooperation Organization Development Bank and the Asian Infrastructure Investment Bank.

The Financial Times reported in June that the Chinese embassy in Jakarta had written a letter to the mining ministry saying $50 billion in mining investment could be at risk from disruptive policies in the nickel industry. It has been widely reported that Chinese companies are seeking nickel sources outside Indonesia.

A letter that the China Chamber of Commerce sent to President Prabowo Subianto in May warned that tight nickel ore quotas, rising taxes and a new pricing formula are threatening investment.

"We came to Beijing because Indonesia is in a strong position to build mutually beneficial cooperation," Purbaya said after arriving, according to the Finance Ministry.

The panda bond is intended to support Indonesia's desire to diversify away from the US dollar for bilateral transactions, the ministry said. The ministry previously issued “Dim Sum” bonds in yuan in 2025 for sale outside mainland China.

Purbaya will visit the UK and Europe following the China trip.

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Rosan Says Foreign Investor Confidence is Back

Investment minister and Danantara CEO Rosan Roeslani has said foreign investor confidence in Indonesia is recovering after a period of uncertainty, citing strong demand for Danantara's inaugural global bond issuance.

Speaking at the Presidential Palace on June 15, Rosan said investors were attracted by Indonesia's economic fundamentals, competitive yields and relatively low equity valuations.

“When investors see that our fundamentals remain strong, our banking sector continues to grow, dividends are attractive, yields are competitive, and stock prices are trading below book value, they naturally conclude that this is the right time to buy,” Rosan said.

Indonesia has seen its stock market lose roughly 30 percent of its value in 2026, the rupiah depreciate to record lows and billions of dollars flow out of the country. Investors have worried openly that policymaking and populism have eroded confidence.

Meanwhile, global index provider MSCI has said it will announce the results of its latest Global Market Accessibility Review on June 18. The results could determine whether the Indonesian Stock Exchange will be downgraded from emerging market status to frontier market. If Indonesia remains an emerging market it could trigger a major market rebound.

Rosan said renewed foreign inflows are supporting a recovery in the Jakarta Composite Index and the rupiah. So far, that recovery is hard to discern, with the JCI closing down 0.55 percent to 6,220.74 on June 17. The rupiah is trading at about Rp 7,700 to the dollar, up from recent trading below 18,000 and largely due to the reopening of the Strait of Hormuz.

Danantara’s bond offering was a bright spot. It raised $1.5 billion on June 11 after attracting approximately $4.6 billion in orders, more than four times the initial fundraising target of $1 billion. US investors accounted for the largest investor group. Bond proceeds will be used for investments and refinancing, with settlement scheduled for June 18.

Separately, Rosan reported that Indonesia realized Rp 498.8 trillion ($29.34 billion) in investment during the first quarter of 2026, up 7.2 percent year-on-year and equivalent to 24.4 percent of the government's annual target of Rp 2,041.3 trillion ($120.08 billion).

Speaking before House Commission XII later the same day, Rosan proposed an additional Rp 578.93 billion in funding for his Ministry of Investment and Downstream Industry in 2027 to support a higher national investment target of Rp 2,322 trillion ($136.58 billion).

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Student Protesters Meet Gibran to Submit Demands

Student protests over government spending priorities and rising living costs continued in Jakarta and several other cities on June 15, with demonstrators calling for a review of major programs, lower fuel prices and better economic policies.

A massive police response seemed to keep the numbers in check, while no labor unions joined the actions.

Vice President Gibran Rakabuming Raka met with 15 student representatives from Bung Karno University and MH Thamrin University at the Vice Presidential Palace on June 15. Student leaders said they had given the government a deadline of five days to respond to their demands.

“I am happy that students are critical, participate in evaluating, and provide suggestions,” Gibran said on June 15. He added that the government would continue reviewing policies and programs in response.

The rallies started with a larger protest on June 12, reflecting anger over fiscal policies, including the Free Nutritious Meals (MBG) and the Red and White Cooperatives programs. Thousands of students gathered at multiple locations in Central Jakarta.

Protesters under the banner “Heading to Bankrupt Indonesia” demanded scrapping the MBG and cooperatives programs, reviewing the revised Police Law, maintaining rupiah stability, lowering fuel and staple food prices, and improving access to affordable education.

Police fielded over 6000 officers, supplemented by solders from the Indonesian Military (TNI), to meet the protests. Authorities estimated around 500 students participated in the June 15 demonstration, as similar protests were held in Bandung, Semarang, Medan, and Lampung.

Political analyst Lili Romli from the National Research and Innovation Agency (BRIN) said the latest protests reflected broad public concerns. “These repeated demonstrations by students and civil society groups may reflect growing disappointment with government policies, which many view as failing to adequately reflect the aspirations and concerns of the public,” Lili told The Jakarta Post on June 16.

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Jokowi Tour Opening in Late June

It certainly looks like former President Joko Widodo is returning to political life. The motives for his upcoming tour of Indonesia may be less than open and he has insisted he is only responding to public invitations but analysts see him reasserting his political relevance, demonstrating his continued popularity and perhaps bolstering the chances of his son, Vice President Gibran Rakabuming Raka, to seek the top job in 2029.

Having been dismissed from the Indonesian Democratic Party of Struggle (PDIP) before the last election, Widodo is now affiliated with the Indonesian Solidarity Party (PSI), which should also get a boost from the upcoming tour as it seeks major party status.

Nonetheless, neither PSI nor Widodo want to cross swords with President Prabowo Subianto at this juncture. PSI Deputy Chairman Isyana Bagoes Oka was quoted on June 17 by Kompas.com saying “This is not a political safari. Mr. Jokowi is just fulfilling invitations from the community.”

PSI’s chairman for political affairs, Bestari Barus, was more forthcoming. He told Tempothat Widodo is hoping to affirm that fact that he is no longer with PDIP and that he is already with PSI.

Isyana refused to leak the agenda of Widodo’s tour, saying just “wait.” He also refused to be drawn on recent reports that Widodo will formally join PSI soon and became chairman of the party’s Board of Trustees. Bestari said it is an open secret in PSI that Widodo is already functioning as a member of the party hierarchy.

Widodo plans to visit 38 provinces, starting from Lampung at the end of June and continuing to East Nusa Tenggara (NTT). The tour could last several months.

Bestari said he hopes the tour will reiterate the former president’s support for both Subianto and Gibran.

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Get to Know Our Member | PIJAR FOUNDATION

Pijar Foundation is a non-profit organization advancing systems innovation in education and employability, food systems, and public health and nutrition across Indonesia and Southeast Asia. Grounded in Indonesia’s public policy landscape, Pijar is a trusted cross-sector convener, translating community-centered solutions into scalable, institutional models. Working with government, civil society and the private sector, Pijar develops inclusive strategies that are locally rooted, nationally scalable and regionally relevant. Since its founding in 2021, Pijar has reached more than 80,000 beneficiaries across six Southeast Asian countries, including 30 Indonesian cities and districts, through more than 300 national and global partnerships.

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