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)