Month: April 2026

The International Monetary Fund (IMF) and foreign investors view Indonesia as one of the world’s “bright spots,” supported by strong economic fundamentals and resilience, despite its vulnerability to global economic turbulence, according to Bank Indonesia (BI).

“The IMF and global investors have praised Indonesia’s consistency in maintaining macroeconomic stability through strong fiscal and monetary coordination, keeping the deficit below 3 percent of GDP, and adopting adaptable, forward-looking policies in response to external pressures,” BI spokesperson Anton Pitono said in a press release on Wednesday.

During the IMF Spring Meetings 2026 on Tuesday, IMF Managing Director Kristalina Georgieva said that, amid increasingly complex global dynamics, Indonesia has demonstrated the ability to balance stability and growth, supported by strong domestic demand. The meeting was attended by BI Governor Perry Warjiyo, Finance Minister Purbaya Yudhi Sadewa and members of the House of Representatives. BI emphasized that Indonesia’s domestic economy remains on track, supported by solid demand, controlled inflation, and improving banking intermediation.

The central bank noted that Indonesia has implemented an integrated policy mix, combining stability-focused monetary policy, growth-oriented macroprudential measures, and a strengthened payment system to support economic activity and digitalization.

Amid ongoing global turbulence, BI reiterated its commitment to maintaining exchange rate stability, strengthening monetary instruments, and managing liquidity prudently to sustain growth, while coordinating with the government to uphold fiscal discipline. Indonesia also reaffirmed its commitment to structural transformation toward a value-added economy through downstream industries and the development of technology-based sectors.

Prior to the meeting in Washington, DC, Purbaya met global investors in New York, including representatives of HSBC Global Asset Management and BlackRock.

“They intend to invest in Indonesia. We provided clarification to address their concerns,” he said in a press release on Tuesday. However, Indonesia remains exposed to global tensions stemming from the ongoing United States–Israeli war on Iran, which has triggered an energy crisis and heightened economic risks worldwide.

S&P Global Ratings warned in a report published on Monday that sovereign ratings in Southeast Asia could come under pressure due to the Middle East conflict, particularly if disruptions in global energy markets persist in the coming months.

“In Southeast Asia, we believe Indonesia’s sovereign ratings would be more vulnerable if the conflict drags on. In contrast, credit support for other major emerging economies in the region is likely to be more resilient,” the report stated.

S&P noted that Indonesia’s sovereign ratings are sensitive to weakening fiscal and external metrics. Higher energy prices could increase subsidy spending and strain the state budget, while rising inflation may push up government interest payments through higher market rates. Overall, Indonesia’s credit metrics are expected to weaken slightly. However, as a commodities exporter, the country may benefit from mitigating factors, particularly if a broad-based increase in commodity prices helps offset fiscal pressures and supports its sovereign rating.

April 16, 2026, The Jakarta Post(https://www.thejakartapost.com/business/2026/04/16/imf-global-investors-see-indonesia-as-bright-spot-bi-says.html

President Prabowo Subianto inaugurated on Thursday the country’s first electric vehicle (EV) assembly plant for large commercial vehicles in Magelang, as Southeast Asia’s largest economy steps up efforts to localize production and reduce fuel imports. With the inauguration of the facility, operated by PT VKTR Sakti Industries, a subsidiary of PT VKTR Teknologi Mobilitas, Indonesia now has the capacity to assemble up to 10,000 electric buses annually.

“We must move toward clean, renewable energy. Electrification is one way to reduce reliance on fossil fuels,” Prabowo said during the ceremony.

Regional administrations, including Jakarta and Central Java, have placed orders for dozens of electric buses for public transit systems, providing early demand for the plant’s output.

“This is something we should be proud of, that we already have a bus and truck industry. Regional leaders who are not ordering domestic products should do so, and the military must also prioritize local purchases,” he added. “If Japan has Isuzu and Hino, and Korea has Hyundai and Daewoo, I hope that in the coming years we will see VKTR emerge as one of Indonesia’s champions.”

Before the inauguration, Prabowo toured the plant’s production lines, which assemble a range of Evs from trucks to buses intended for public transportation and logistics, including units for Jakarta’s Transjakarta network. The assembly process covers multiple stages, from chassis assembly and welding to main assembly, body finishing, and final inspection. The Magelang facility currently meets a local content requirement of more than 40 percent for buses. The company aims to raise this to 60 percent this year and 80 percent by 2028, according to VKTR president commissioner Anindya Bakrie.

“Electrifying buses and trucks could save Indonesia up to US$5 billion annually in fuel subsidies,” Anindya said. When VKTR debuted on the Indonesian Stock Exchange in 2023, it primarily operated as a trading company importing completely built-up (CBU) K9 electric buses from China’s EV giant BYD for use by Transjakarta, before expanding into assembly.

The facility adds to Indonesia’s growing EV manufacturing base, with new plants by BYD and VinFast in Subang expected to begin operations later this year. Since 2019, Indonesia has sought to position itself as a global EV hub by leveraging its vast nickel reserves, supported by tax incentives to attract investment and accelerate domestic adoption.

The President renewed the electrification push earlier this month as global oil prices surged above $100 per barrel amid the United States–Israeli war on Iran, now in its fifth week, far exceeding the country’s 2026 budget assumption of $70. Prabowo, who has long promoted biofuels as a path to energy security, is now calling for a broader transition to EVs and electric stoves. His plans include forming a task force, targeting up to 100 gigawatts in additional solar power capacity, and converting 120 million motorcycles within four years.

Shifting from fossil fuels to electricity for households and transportation is a logical response to Indonesia’s dependence on energy imports amid the Middle East crisis. However, experts note that the success of electrification will depend on sustained policy support.

April 10, 2026, The Jakarta Post

(https://www.thejakartapost.com/business/2026/04/10/prabowo-inaugurates-ris-first-electric-bus-truck-assembly-plant.html)

Indonesia has begun construction of its first domestic melamine plant in the Gresik Special Economic Zone (KEK Gresik), East Java, in a move aimed at accelerating downstream development in the national chemical industry. The project, developed by PT GEABH Joint Technology, is targeted to commence operations in the second quarter of next year. Coordinating Economic Affairs Minister Airlangga Hartarto said the development reflects the government’s commitment to strengthening value-added industries, particularly in strategic sectors such as petrochemicals.

“This project is part of a broader development plan in KEK Gresik, with a projected investment of around US$600 million (IDR 10.2 trillion),” he said on Wednesday.

The facility is designed as an integrated melamine production chain with an annual capacity of up to 120,000 tonnes. In its initial phase, the plant will include production capacities of 800 tonnes per day (TPD) of ammonia, 1,500 TPD of urea, and 200 TPD of melamine.

The complex will process natural gas into ammonia, which will then be converted into urea and further developed into higher-value derivative products such as ammonium nitrate and melamine, a chemical compound mainly used to produce hard and durable plastics. These products are widely used in agriculture, chemicals, and manufacturing, and are expected to support domestic industries while opening export opportunities.

The project aligns with the government’s 2025–2029 National Medium-Term Development Plan (RPJMN), which prioritizes industrial downstreaming and the strengthening of special economic zones as key drivers of growth. KEK Gresik has been designated as one of the country’s priority zones, playing a strategic role in boosting industrialization, exports, and regional economic development.

As of 2025, cumulative investment in special economic zones reached IDR 336 trillion, with more than 249,000 jobs created. KEK Gresik alone accounted for IDR 105.4 trillion, or roughly 31 percent of total KEK investment, employing around 46,000 workers. Airlangga noted that the manufacturing sector contributed 19.07 percent to Indonesia’s gross domestic product in 2025, underscoring its role as a key growth engine across industrial zones. At the regional level, manufacturing in East Java contributes about 31.32 percent to the regional economy, while the unemployment rate in Gresik regency has declined from 8 percent to 5.47 percent over the past five years.

“East Java is one of Indonesia’s main manufacturing hubs, contributing nearly a quarter of national manufacturing output. It is therefore crucial to maintain this competitive momentum,” said East Java Deputy Governor Emil Elestianto Dardak.

Beyond import substitution for key chemical feedstocks, the melamine project is expected to strengthen domestic supply chains, enhance export competitiveness, and create new employment opportunities. The development of KEK Gresik has been supported by government-backed infrastructure and policy incentives aimed at fostering industrial expansion in the zone. Government data also point to broader socioeconomic gains, including improvements in the Human Development Index (HDI), which rose from 76.98 in 2021 to 79.69 in 2025.

April 9, 2026, The Jakarta Post

(https://www.thejakartapost.com/business/2026/04/09/ri-breaks-ground-on-first-melamine-plant-with-600m-investment-plan.html)

Researchers from the Center for Strategic and International Studies (CSIS) have urged the government to pursue strategic diversification to shield Indonesia from risks stemming from heightened global uncertainty.

“We view strategic diversification as a win-win option, as it neither forces our country to weaponize its foreign economic policies nor to isolate itself from the international community,” said Dandy Rafitrandi, an economic expert at CSIS Indonesia, during a panel discussion on Tuesday.

Muhammad Habib Abiyan Dzakwan, an international relations researcher at CSIS Indonesia, added that being strategic meant being “well-calibrated, with clear objectives and alignment among goals, methods, and resources,” while diversification meant “reducing asymmetric dependence on any single partner, product, or platform.”

This approach is particularly relevant in responding to external crises, including the impact of the United States–Israeli war on Iran, which has disrupted global systems and affected Indonesia’s trade policies, domestic industries, and attractiveness to foreign investment. CSIS recommends implementing diversification strategically across the energy, food, manufacturing, and technology sectors.

Indonesia’s export structure remains heavily concentrated among a limited number of trading partners, posing risks amid rising global tensions and a weakening multilateral trade system. CSIS executive director Yose Rizal Damuri warned that dependence on specific markets increases vulnerability to external shocks. He also cautioned against extreme inward-looking self-sufficiency policies, which could undermine competitiveness. Instead, the government should move beyond merely expanding export markets and pursue targeted diversification by comprehensively assessing risks and aligning long-term goals.

At the same event, Ditya Agung Nurdianto, the Foreign Ministry’s director for international trade, revealed that 84.5 percent of Indonesia’s exports over the past decade went to just 19 countries, highlighting heavy reliance on key partners. Such concentration is increasingly problematic amid global fragmentation and protectionism, as the rules-based trading system continues to erode.

Ditya noted that institutions such as the World Trade Organization are facing mounting challenges, with the latest ministerial conference in March failing to produce substantial agreements due to a lack of consensus. He also highlighted structural shifts, including the “weaponization of interdependence,” where economic and technological networks are increasingly used as geopolitical tools.

Additionally, industrial policies in developed economies such as tariffs, “friendshoring,” and “nearshoring” have created an uneven playing field for global trade and investment. Meanwhile, the escalating Middle East conflict has exposed vulnerabilities in the global energy system, with high oil prices straining Indonesia’s state budget and posing risks to domestic stability.

CSIS researchers found that while Jakarta recognizes global conflict as a key threat and the need for flexible responses, ministerial silos have hindered the development of a coherent national strategy. Crisis responses remain slow, fragmented, and overly focused on domestic stability, underscoring the need for a more integrated approach. They also urged stronger coordination across ministries to expand access to global markets. Although Indonesia has established multiple free trade agreements, including the Regional Comprehensive Economic Partnership (RCEP) and various Comprehensive Economic Partnership Agreements (CEPAs), fragmented policymaking often leads to inconsistent regulations that hinder business efficiency.

April 9, 2026, The Jakarta Post

(https://www.thejakartapost.com/business/2026/04/09/ri-needs-strategic-diversification-to-mitigate-global-crises-csis.html)

The Tourism Ministry is preparing measures to anticipate a potential loss of up to 60,000 inbound tourists as the United States–Israeli war on Iran disrupts the global travel industry. The closure of Iranian airspace since the initial wave of attacks on Feb. 28 has affected flights across six major aviation hubs, including Abu Dhabi and Dubai in the United Arab Emirates, Jeddah and Madinah in Saudi Arabia, and Muscat in Oman.

These disruptions have led to the cancellation of around 770 flights to Jakarta, Bali’s capital Denpasar, and North Sumatra’s capital Medan, according to the ministry. As a result, Indonesia could lose up to 60,000 international visitors, along with an estimated IDR 2.04 trillion (US$120.6 million) in potential foreign exchange earnings.

“Global geopolitical dynamics are putting pressure on the tourism sector. However, we will continue to take mitigation steps to maintain our national tourism targets,” Tourism Minister Widiyanti Putri Wardhana said in a statement on Wednesday.

The ministry also highlighted mounting pressure from rising global energy prices. Crude oil prices have surged by more than 50 percent, from around $67 per barrel before the conflict to over $100 per barrel within its first month. Consequently, fuel surcharges imposed by several global airlines are expected to increase, driving up overall transportation costs.

On April 1, state-owned oil and gas company Pertamina raised aviation turbine fuel (avtur) prices by around 70 percent for domestic flights and 80 percent for international flights compared with the previous month. This move has prompted the Indonesia National Air Carriers Association (INACA) to renew its call for adjustments to both fuel surcharges and airfare price ceilings. The association initially proposed a 15 percent increase but has since called for further adjustments in response to the sharper-than-expected rise in jet fuel prices.

Despite these challenges, the Tourism Ministry remains committed to achieving this year’s target of 16–17.6 million foreign visitors. To navigate the growing pressures on international travel, the ministry is pursuing a “market pivot” toward Southeast Asia, East Asia, and other medium-haul destinations. Its mitigation strategies include strengthening digital campaigns in international markets and optimizing partnerships with airlines operating direct routes to Europe and the United States. The government also plans to host international events in border regions and intensify travel promotions to sustain occupancy rates in domestic tourist destinations.

“Amid global pressures, we need to be more adaptable. Market diversification, stronger promotion, and optimizing domestic tourism are key to ensuring the sector remains a driving force of the national economy,” Widiyanti said.

She added that collaboration among ministries, institutions, and the House of Representatives will be essential to maintaining the sector’s resilience and contribution to national economic growth. The government is also pursuing several strategic measures, including flight incentives, visa-free policies, increased flight capacity, and expanded budgets for tourism promotion.

April 2, 2026, The Jakarta Post(https://www.thejakartapost.com/business/2026/04/02/ri-to-lose-60000-foreign-visitors-to-mideast-crisis-tourism-ministry.html)  

Indonesia’s trade surplus slightly increased to US$1.27 billion in February, up from US$954 million in the previous month, despite rising imports of capital goods. However, the figure remained lower than the May–December period last year, when the surplus consistently exceeded US$2 billion.

Total imports rose 10.85 percent year-on-year (yoy) to US$20.89 billion, driven mainly by capital goods imports, which surged 33.68 percent yoy to US$4.61 billion. Consumer goods imports increased 19.84 percent to US$1.76 billion, while raw material imports rose 4.25 percent to US$14.52 billion.

Among specific categories, precious metals and jewelry recorded the highest annual import growth, rising 63 percent, followed by mechanical appliances and electrical machinery, which increased 51.6 percent and 19.6 percent, respectively. Overall imports in January–February totaled US$42.09 billion, reflecting a 14.44 percent annual increase. The Permata Institute for Economic Research (PIER) noted that this figure was slightly above its 8.74 percent forecast, though it moderated from 18.21 percent growth in January.

Despite the slowdown, import growth continued to outpace exports, reflecting a weaker global economic outlook alongside Indonesia’s pro-growth policies that have sustained domestic demand, the Jakarta-based research institute said. It added that all import categories consumer goods, raw materials, and capital goods recorded growth. However, raw materials and capital goods growth moderated amid rising trade uncertainty in February, while consumer goods imports accelerated in line with seasonal Ramadan demand.

Exports rose only 1.01 percent yoy. According to Statistics Indonesia (BPS), key export drivers included animal and vegetable fats and oils, nickel and its derivatives, and electrical machinery and equipment. Exports of animal and vegetable fats, including crude palm oil (CPO), rose 16.19 percent yoy to US$3.1 billion in February, followed by iron and steel, which increased 3.3 percent. In contrast, mineral fuels exports, including coal, fell 15.65 percent from a year earlier.

Indonesia’s cumulative trade surplus for January–February stood at US$2.23 billion, significantly lower than US$6.59 billion in the same period last year. Trade with China remained the largest source of deficit, widening from US$3.3 billion to US$4.99 billion. Statistics Indonesia deputy for distribution and services statistics Ateng Hartono said the deficit was driven mainly by imports of mechanical appliances, electrical machinery, and vehicles.

Beyond China, Australia and Singapore also contributed to larger trade deficits. The deficit with Australia rose to US$1.69 billion, driven by precious metals, cereals, and coal, while the deficit with Singapore reached US$1.48 billion, led by mechanical appliances and precious metals.

Despite the Agreement on Reciprocal Trade (ART) aimed at reducing Indonesia’s trade surplus with the United States, the surplus with the US continued to widen. It increased from US$2.63 billion to US$3.11 billion in the first two months of the year, supported by exports of electrical machinery, apparel, and crude palm oil.

April 1, 2026, The Jakarta Post(https://www.thejakartapost.com/business/2026/04/01/ri-posts-1-27b-trade-surplus-despite-surge-in-capital-goods-imports.html)

Japan is seeking closer cooperation with Indonesia on energy security, Prime Minister Sanae Takaichi said, as global concerns over supply disruptions intensify amid rising geopolitical tensions.

“In light of the Iran situation, the strategic importance of resources and energy security is once again being recognized globally. Indonesia is a major resource-rich nation,” Takaichi said alongside President Prabowo Subianto after bilateral talks in Tokyo on Tuesday, according to Reuters.

Her remarks followed the signing of 10 memoranda of understanding (MoUs) and strategic business deals worth US$23.63 billion during Prabowo’s visit. The agreements were announced at the Indonesia–Japan Business Forum at the Imperial Hotel Tokyo on Monday, covering clean energy downstream projects, oil and gas exploration, geothermal development, and financial inclusion.

The visit took place amid heightened tensions in the Middle East that have disrupted oil and gas flows through the Strait of Hormuz. Japan has responded by strengthening energy security through increased coal use, tapping strategic oil reserves, and diversifying supply sources. Indonesia remains a key partner as the world’s largest thermal coal exporter and a major LNG supplier, with around a quarter of its exports going to Japan.

Both countries also pledged support for de-escalation efforts in the Middle East. Prabowo said they would “make their best efforts to convince all parties to de-escalate,” while encouraging greater Japanese involvement in Indonesia’s economy, including critical minerals, rare earths, industrialization, and nuclear energy.

“If there’s a real partnership between the Japanese economy, Japanese industry, and Indonesia, both our peoples will benefit. When both our peoples benefit, this will be a pillar of peace and stability,” Prabowo said.

A major portion of the agreements focuses on energy cooperation involving Japan’s INPEX. These include a partnership between Pertamina and INPEX to develop the Abadi Gas Field in the Masela Block, and an MoU between Pertamina Hulu Energi and INPEX for upstream oil and gas exploration in Indonesia and Southeast Asia.

Another deal between Supreme Energy Rajabasa and INPEX will advance studies for a geothermal project, supporting Indonesia’s renewable energy expansion. Energy Minister Bahlil Lahadalia said he had been instructed to accelerate the Masela Block project, valued at around US$20 billion plus US$1 billion for carbon capture and storage. He noted rising geopolitical risks could increase costs.

Beyond fossil fuels, Indonesia is pushing energy diversification. “Whether geothermal, hydropower, solar, or wind—if it is cost-efficient, we will promote it,” Bahlil said.

Other agreements include a methanol project with Sojitz, cooperation between KADIN and the Japan Chamber of Commerce and Industry, semiconductor and AI collaboration between PT Eblo Teknologi Indonesia and Hayashi Kinzoku, and financial sector deals involving Pegadaian, SMBC Indonesia, Danantara, and SMBC Aviation Capital. Additional cooperation covers JETRO with Danantara Investment Management, a geothermal project in Hululais supported by JICA, and a tourism partnership between Indonesia and Japan focusing on promotion, training, and industry collaboration.

March 31, 2026, The Jakarta Post

(https://www.thejakartapost.com/business/2026/03/31/ri-japan-seek-deeper-energy-ties-after-23-6b-in-deals.html)  

Over the past few decades, Indonesia’s economic growth has relied on three main pillars: domestic consumption, commodity exports, and conventional infrastructure development. While this model has maintained stability, it is increasingly constrained by global structural changes driven by climate change, technological disruption, and shifting energy geopolitics.

In a rapidly decarbonizing global economy, countries that position the energy transition as a growth strategy will gain a strong competitive advantage. In this context, large-scale solar energy development should be viewed not only as an energy transition program, but also as a new engine of economic growth.

President Prabowo Subianto has set a target to develop up to 100 gigawatts (GW) of solar power capacity within approximately two years. If achieved, this would be among the largest energy projects in Indonesia’s history and globally. Given its scale and short execution period, the program could create a major “investment shock” with significant macroeconomic effects.

Assuming utility-scale solar costs of USD 900,000–1,000,000 per MWp, total investment is estimated at around USD 100 billion. A 320 GWh Battery Energy Storage System (BESS) adds another estimated USD 100 billion. Supporting infrastructure such as transmission networks and electrical component industries could add around 25 percent in additional costs, plus roughly USD 30 billion for industrial development. Total investment could therefore reach about USD 255 billion.

If implemented within two years, annual investment would exceed USD 127.5 billion, or approximately 9.1 percent of GDP, representing a substantial fiscal and economic stimulus. From a development economics perspective, such investment generates strong multiplier effects across construction, manufacturing, logistics, finance, and technology. With a conservative multiplier of 1.7, the total economic impact could reach USD 433.5 billion, or more than 15 percent of GDP per year during implementation. Using Indonesia’s ICOR of 6.33–6.5, direct investment of this scale could contribute around 1.4 percentage points to annual GDP growth. The broader impact, however, extends beyond capital formation.

If around 60 percent of funding comes from foreign investment, inflows could reach USD 150–153 billion, strengthening financial markets and accelerating industrial capacity. At the same time, demand for solar panels, batteries, and related components would stimulate domestic manufacturing, supported by Indonesia’s nickel downstream industry.

The program would also generate large-scale green employment, improve workforce skills, and reduce long-term electricity costs, enhancing industrial competitiveness and export resilience. Overall, the combined 100 GW solar and 320 GWh BESS program could raise economic growth by approximately 1.5–2 percentage points annually, potentially lifting growth to 6.5–7 percent.

However, success depends on strong institutional readiness, particularly in financing, grid integration, and PLN’s capacity. Without financial strengthening and reform, the expansion could strain public utility balance sheets. If managed effectively, this program could become a structural turning point for Indonesia’s economy, driving investment, industrialization, and long-term competitiveness.

March 25, 2026, CNBC Indonesia

(https://www.cnbcindonesia.com/opini/20260325135407-14-721256/percepatan-energi-hijau-sebagai-mesin-baru-pertumbuhan-ekonomi-ri)  

President Prabowo Subianto has asserted that Indonesia’s push for food and energy self-reliance is driven not by ideology but by “common sense,” emphasizing its urgency in an increasingly volatile global landscape. Speaking during a question-and-answer session with senior journalists and experts at his Hambalang residence, aired on Thursday, he framed national resilience as a fundamental necessity.

“I think the school of thought is the school of common sense common sense and reality,” Prabowo said, stressing that basic human needs, particularly food, underpin civilization. Drawing on historical perspectives, he argued that conflict has consistently stemmed from competition over resources. “Without food, there is no civilization,” he added, warning that reliance on globalization to meet domestic needs is increasingly untenable.

He cited the Russia–Ukraine war as an example of how distant conflicts can disrupt global stability, noting that tensions between two major wheat producers triggered a surge in global food prices. “The world is getting smaller; everything is interconnected. Conflict in one place impacts the entire world,” he said, highlighting the risks of import dependency amid geopolitical uncertainty.

When asked whether his policies were intended to prepare Indonesia for direct conflict, Prabowo noted that warfare has been a constant throughout human history, reinforcing the need for national self-sufficiency. Addressing fiscal concerns, he dismissed criticism over the reallocation of funds for the free nutritious meals program. He maintained that “efficiency measures,” aimed at keeping the fiscal deficit below 3 percent, would not undermine essential sectors. “We’re not reducing education or operational costs,” he said, adding that critics were “dramatizing” routine budget adjustments.

Presidential spokesman Prasetyo Hadi said the government is seeking up to IDR 80 trillion (approximately $4.7 billion) in spending cuts to create a fiscal buffer against potential fallout from escalating Middle East tensions, including the United States–Israel conflict involving Iran, though he did not specify where cuts would occur.

Indonesia is also considering fuel-saving measures, such as work-from-home arrangements for public sector employees, as geopolitical tensions push global oil prices higher. Despite these pressures, the government has reiterated that the free meals program, budgeted at $19.7 billion for 2026, will remain intact. Fuel subsidies, which account for around 15 percent of the state budget, have also been firmly defended.

Economist Mohammad Faisal of CORE suggested reallocating funds from lower-priority programs, including reassessing the free meals initiative. He emphasized linking the program with domestic production and involving MSMEs to create a multiplier effect.

Josua Pardede of Bank Permata cautioned that the program must deliver measurable improvements in nutrition, health, and productivity while supporting local agriculture. Otherwise, it risks crowding out more productive investments. He also warned that prolonged cheap energy could become a hidden subsidy unless tied to efficiency gains.

March 23, 2026, The Jakarta Post

(https://www.thejakartapost.com/business/2026/03/23/self-reliance-common-sense-prabowo-says-as-war-tests-global-order.html)  

Italian global energy company Eni has officially issued a Final Investment Decision (FID) for the development of a deepwater gas project in Indonesia, valued at approximately US$15 billion, equivalent to IDR 254 trillion (rate of IDR 16,956 per US dollar). This investment will support the development of two major projects Gendalo-Gandang (South Hub) and Geng North-Gehem (North Hub) located offshore East Kalimantan. The FID was announced just 18 months after the approval of the Plan of Development (POD) in 2024, reflecting the accelerated progress of deepwater gas development in Indonesia.

The project leverages advanced deepwater production technology and existing infrastructure, including the Jangkrik Floating Production Unit (FPU) and the reactivation of Train F at the Bontang LNG Plant. These measures are expected to enhance cost efficiency and accelerate the commercialization timeline.

The Gendalo-Gandang development will be carried out at water depths of 1,000 to 1,800 meters, involving the drilling of seven production wells connected to the Jangkrik facility. Meanwhile, the North Hub project will involve 16 production wells at depths of 1,700 to 2,000 meters, connected to a new Floating Production, Storage, and Offloading (FPSO) facility. This FPSO will have a processing capacity exceeding 1 billion standard cubic feet of gas per day (BSCFD) and 90,000 barrels of condensate per day.

Combined, these projects hold estimated resources of approximately 10 trillion cubic feet (TCF) of gas and 550 million barrels of condensate. Production is expected to commence in 2028 and peak in 2029, reaching around 2 billion cubic feet of gas per day and 90,000 barrels of condensate per day. The produced gas will be transported onshore via pipeline to supply the domestic gas network and support LNG production at the Bontang facility for both domestic use and export markets. Condensate will be processed and stored at the offshore FPSO before being transported by tanker.

This FID marks a significant milestone in Indonesia’s deepwater gas development and strengthens the partnership between Eni and the Indonesian government. The substantial gas and LNG output from this project is expected to contribute to the country’s long-term energy security. The Head of the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas), Djoko Siswanto, welcomed the decision, describing it as a strong signal of global investor confidence in Indonesia’s upstream oil and gas sector.

He added that the project would support increased national gas production while reinforcing energy security. “SKK Migas, together with the government, will continue to accelerate strategic projects like this to maximize benefits for the state and the community, while also driving economic growth,” Djoko stated in a written statement on Wednesday (March 18, 2026).

In parallel with the FID, Eni has initiated procurement tenders and secured Long Lead Items (LLI). Djoko also noted that Eni Indonesia’s Managing Director had reported the FID announcement to the Minister of Energy and Mineral Resources. According to Djoko, the investment is expected to generate a multiplier effect, including job creation. The project will also form part of a broader asset consolidation between Eni and Malaysian energy company Petronas, aimed at establishing a new entity (NewCo) with a production target exceeding 500,000 barrels of oil equivalent per day by 2029. Eni has operated in Indonesia since 2001 and remains a key gas producer in the Kutai Basin, Makassar Strait an area increasingly recognized as a strategic hub for national gas production.

March 18, 2026, CNBC Indonesia

(https://www.cnbcindonesia.com/news/20260318202135-4-720169/tok-perusahaan-minyak-italia-ini-resmi-investasi-di-proyek-rp254-t-ri)