AGP Executive Report

Digital Economy Push: Coordinating Minister Airlangga targets Rp40 trillion in transactions for Harbolnas 2026, up ~10% from last year, betting on video commerce and broader digital growth. AI & Infrastructure: The government says AI and data centers are key pillars for Indonesia’s digital economy, aiming to support 8% growth and create jobs for 600,000+ professionals. Investment & Decarbonization: BKPM says carbon capture and storage (CCS) can cut emissions in hard-to-abate sectors and boost Indonesia’s investment appeal, citing large CO2 storage potential. Critical Minerals Value: Indonesia’s nickel and cobalt reserves are valued at about US$800 billion (DEN), as downstreaming policies expand domestic processing. Forest Fire Response: The Forestry Ministry launches an online portal for public reporting to speed early detection and mitigation of forest and land fires. Labor Law Update: The manpower ministry says a new Manpower Law is aimed for completion by October 2026 to strengthen worker protection. Corporate/State Firms: Lawmakers warn PT Pos Indonesia must secure Rp158 billion in unpaid receivables to pay salaries on time. Trade & Markets: Nickel and cobalt headlines also come alongside broader market focus on AI-driven demand and global commodity volatility. Public Order & Politics: Thousands protest in Jakarta demanding stronger anti-corruption measures, including asset forfeiture.

Banking & Rates: Bank Indonesia governor nominee Destry Damayanti signaled policy continuity, telling lawmakers she would “keep carrying on the good policies” while pushing growth if confirmed. Digital Trade & Payments: ASEAN’s Digital Economy Framework Agreement (DEFA) is moving toward implementation, aiming for interoperable digital identity and trusted cross-border services. Social Media Regulation: Meta agreed to pay up to $16.68bn in a US settlement over claims it designed platforms to addict children, with mandated product changes for teen accounts. Indonesia Tourism & Aviation: Garuda Indonesia announced 170,845 free domestic seats to 33 destinations for international travelers, as Bali tackles overtourism pressures. Capital Markets & Macro Spillovers: Higher US yields are expected to lift Asian borrowing costs and pressure currencies, keeping central banks watchful. Energy & Industry: Geo Dipa and PTPN I will study using geothermal power for tea drying, targeting productivity gains and reduced fossil fuel/wood dependence. Environment & Risk: Indonesia is facing worsening haze from wildfires, with authorities tightening enforcement and sanctions on firms linked to fires.

Central Banking & Payments: Bank Indonesia’s Destry Damayanti, sole candidate for governor, told lawmakers she’ll boost cooperation without weakening BI independence, as investors watch autonomy and market transparency. Payments Tech: BI also explained the new KKI credit-card-like instrument as a payment deferral tool (not debt expansion) to complement wallets and cards. Energy & Infrastructure: President Prabowo launched Indonesia’s 100 GW solar program, aiming for 17 GW in the first phase and adding storage, with a 305 MW Bali project plus 1 GWh BESS starting construction. Food Security: The government said national rice reserves (CBP/Bulog) are at 5.1 million tons, enough to handle El Niño impacts and keep prices stable. FX & Commodities: The rupiah strengthened as oil prices fell on Middle East peace hopes. Trade & Industry: Indonesia tightened nickel rules and quotas, reshaping ties with China-based processors amid investment pushback. Business Expansion: FORTÉ acquired Vega Global to expand APAC pro AV reach, including Indonesia. Public Health & Environment: El Niño-linked haze from Borneo and Sumatra wildfires is putting 3.4 million people at respiratory risk, disrupting schooling and driving mask use. Law & Crime: Police uncovered an illegal gold smuggling network to Hong Kong and are hunting a suspected drug supplier to actor Revaldo.

Indonesia Wildfires Crackdown: Indonesia has charged 72 people over alleged forest and peatland fires across Borneo and Sumatra, as haze worsened and visibility reportedly fell to near-zero in parts of the region. Energy & Power: Prabowo kicked off a major solar push, launching 100 GW capacity targets and related projects, while Pertamina and PLN signed an LOI for 45 MW of geothermal power. Forest-Fire Policy: The government moved to revoke permits tied to companies linked to land burning and fires, signaling tougher enforcement. Indonesia–China Trade & Tech: Indonesia and China agreed to deepen bilateral cooperation, including more ambitious trade targets and expanded AI collaboration. Capital Markets: Advasa Holdings completed a direct listing on Nasdaq under ticker ADBT, adding another Indonesia-linked fintech story to regional deal flow. Regional Business Context: Copper prices neared record highs as tariff fears pushed traders to move metal into U.S. warehouses, tightening supplies elsewhere—an input-cost watch for Indonesia’s manufacturing and infrastructure pipeline.

Energy & Resources: DPR and East Kalimantan authorities plan to maximize Mahakam Block oil and gas output, focusing on continued exploration and higher lifting capacity to boost regional welfare. Haze & Wildfires: Indonesia is battling severe smoke from South Sumatra and other hotspots, with authorities deploying firefighting and cloud seeding, while Malaysia is allowed to use Indonesian airspace for haze mitigation. Forest Governance: The Forestry Ministry urges forest permit holders to upgrade wildfire safeguards, warning of negligence findings, as Indonesia targets companies linked to fires and seeks major restoration claims. Payments & Banking: Bank Indonesia launches Kartu Kredit Indonesia (KKI), shrinking credit card numbers but pushing domestic QRIS-based credit payments through participating banks. Digital Infrastructure: Asia-Pacific data centre values are forecast to top $950bn by 2030, with Indonesia among key capex markets as AI demand accelerates buildouts. AI Supply Chain: Taiwan indicts nine, including Nvidia and Super Micro staff, over alleged illegal AI server exports to China—another reminder of export-control pressure on the region’s tech trade. SME Finance: A new brief highlights how SMEs remain central to growth and jobs across BRICS economies, with financing access as a key lever. Business & Markets: Forbes Asia’s 100 to Watch list spotlights startups across APAC, including eight Indonesian entries, as investors chase early-stage tech and robotics themes.

Indonesia–China Ties: President Prabowo met China’s Wang Yi and Defense Minister Dong Jun in Jakarta, backing a new five-year action plan and pushing deeper cooperation on trade, AI, fishing, maritime work, and energy/minerals. Jakarta–Bali Finance Push: Indonesia is moving ahead with $28bn plans for international financial centers in Jakarta and Bali, with investors still asking for legal certainty. Battery Supply Chain: Malaysia and Indonesia launched lithium-ion battery cell collaboration at an ASEAN battery conference, aiming to tighten regional value chains. Wildfire & Haze Response: Indonesia arrested 72 suspects over forest and peatland fires as haze worsened into Malaysia; Prabowo ordered tougher action, while Malaysia discussed cloud seeding using Indonesian airspace. Aviation Firefighting Capacity: The transport ministry issued 35 permits for foreign-registered helicopters to speed aerial firefighting and disaster response. Energy & Gas Investment: NuEnergy started construction for its Tanjung Enim early gas sales initiative, targeting ramp-up toward commercial production. AI Hardware Trade Risks: Taiwan indicted Nvidia and Supermicro-linked figures over alleged illegal export of high-end AI servers to China, with Indonesia flagged as a possible pass-through market. El Niño Watch: Record ocean warming is already underway, raising risks for agriculture and food supplies across the region.

Commodity Market Infrastructure: Indonesia’s planned minerals and strategic commodity exchange will launch on Jan 1, with OJK chief supervisor nominee Sarjito saying the priority is “trusted” infrastructure—deep, liquid, orderly and integrity-backed trading—so traders actually rely on the market. Forest Fire Crackdown: President Prabowo ordered authorities to revoke permits of corporations linked to forest and land fires, warning no firm will be exempt and urging communities to clear land via government-supported channels instead of burning. Wildfire Response in Central Papua: Central Papua stepped up early detection and integrated patrols as El Niño dries conditions, with officials stressing prevention, hotspot mapping and public education to curb slash-and-burn practices. Haze and Enforcement: Indonesia named 72 suspects across nine regions in forest-fire probes as haze spreads to Malaysia, while authorities continue arrests and investigations. EV Funding Pulse: A report says Southeast Asia’s EV startups have raised US$622m since 2016, with Singapore leading both company count and capital share. Banking Reshuffle: Woori Bank cut 20 overseas branches in H1, including closures in Indonesia and Cambodia, pointing to profitability and asset-quality management over expansion. Health Policy Research: A new review highlights that low- and middle-income countries drive most cervical cancer deaths, urging system-level fixes like screening access, radiotherapy capacity and workforce training.

Forest-Fire Crackdown: Indonesia arrested 72 people suspected of starting forest and peatland fires as haze worsened across Borneo and Sumatra, with investigators tracing financial records that could implicate companies; suspects face up to 15 years in prison. Cross-Border Haze Diplomacy: The State Secretary said Jakarta is in contact with neighboring countries over transboundary haze impacts, while BNPB coordinates firefighting and monitoring as hotspots remain high. Firefighting Logistics Under Strain: BNPB flagged practical hurdles in Kalimantan, including dwindling water sources, difficult access roads, and strong winds that complicate helicopter water-bombing and ground operations. Regional Disaster Readiness: APEC officials met in Dalian to strengthen disaster preparedness, focusing on early warning, risk financing, anticipatory action, and community preparedness—relevant as climate-linked hazards intensify. Transport Tech Upgrade: Hitachi Rail won a contract to modernize MRT Jakarta fare collection at 13 Phase 1 stations, enabling contactless cards, QR e-wallets, and mobile QR tickets. Business Cash-Flow Stress: Atradius reported banking delays are a key driver of late payments for Indonesian firms, with 9 in 10 companies receiving overdue bills. People-First Health Push: Indonesian advocates urged community-led HIV and TB responses, arguing treatment alone won’t end stigma and access barriers. Trade & Connectivity Angle: Indonesia is also exploring cross-border maritime connectivity via a proposed Tiblawan Port in the Philippines’ BIMP-EAGA network.

Indonesia’s Subsidy Reform: Indonesia is considering restricting Pertalite purchases using vehicle types tied to socioeconomic “deciles,” aiming to curb fuel-subsidy costs and improve targeting. Energy & Security Diplomacy: China and Indonesia held the first China-Indonesia Comprehensive Strategic Dialogue Mechanism and the second ministerial “2+2” foreign and defense dialogue in Jakarta, pledging deeper cooperation on security, energy, and regional stability. Forest Fires Crackdown: Indonesia deployed 12,880 personnel to tackle Kalimantan and Sumatra fires amid El Niño, while authorities investigate four firms over West Kalimantan fire-linked violations. Drought Response: Public Works says drought mitigation reached 1,229 locations as of Aug 21, protecting rice fields and clean-water access for hundreds of thousands. Markets & Trading Rules: The Indonesia Stock Exchange will scrap the IDR50 minimum trading price floor after MSCI pressure, with the change targeted for Sept 7—an effort to restore liquidity for stuck stocks. Rail Tourism Uptick: KAI recorded 405,814 international tourist passengers Jan–July 2026, up 3.86% year-on-year. Indonesia–China Trade/Industry Signals: Indonesia plans a strategic mineral and commodities exchange, while Indonesia and China also discussed defense and energy cooperation.

Forest-Fire Crackdown: Indonesian President Prabowo ordered more troops, helicopters, firefighting gear and water-drilling equipment to Kalimantan as wildfires worsen, while the government investigates four companies in West Kalimantan and warns of permit revocation if wrongdoing is proven. Fire Footprint: Environment Minister Jumhur Hidayat said about 85,000 hectares of company concession areas are affected across Sumatra and Kalimantan, with 335 concession-holding firms flagged after hotspots were detected. Indonesia–China Strategy: Prabowo hosted China’s foreign and defense ministers in Jakarta, calling for deeper cooperation across politics, economy, science and technology, and welcoming more Chinese investment as both sides push broader defense and energy ties. ASEAN Records Expansion: Malaysia-based ASEAN Records and ASIA Records announced new offices in Jakarta and Hong Kong, with verification services expanding across Bangkok, Beijing and India. Digital Security (APAC): A Kaspersky survey found APAC consumers are more active online than global peers and show rising concern about cybercrime, with Indonesia among the more worried markets. Sustainability in Sports: Maybank Marathon sustainability efforts in Bali include waste management and plogging, using reusable cups and eco-friendly materials ahead of the race.

Indonesia–China Strategic Push: President Prabowo met Chinese FM Wang Yi and Defense Minister Dong Jun in Jakarta, praising the 2+2 and Comprehensive Strategic Dialogue and welcoming more Chinese investment while promising a business-friendly environment. Trade & Security Agenda: Indonesia and China agreed to deepen trade beyond $167bn, expand manufacturing and local-currency financial cooperation, and accelerate talks on an East Sea Code of Conduct, alongside stepped-up defence ties. EU Trade Deal Momentum: Coordinating Minister Airlangga called the EU-CEPA a “game changer,” aiming for faster tariff cuts (about 90% to zero on effect) and more European investment. Capital Markets Watch: The IDX’s IHSG rose 1.93% to 6,525 for the week, with higher trading activity and foreign buying on Friday. Creative Economy Jobs: Indonesia’s creative economy is framed as a jobs engine for Gen Z and millennials, with 82% of the unemployed in that group and 1–1.5m entering the sector annually. MSME Identity & Tech: Bank Indonesia urged young MSME players to innovate with technology without abandoning cultural roots. Disaster Logistics: BNPB airlifted nearly 778 tons of quake relief to East Nusa Tenggara, using both military and commercial transport. Geopolitics in the Region: A coalition of Arab and Islamic states, including Indonesia, condemned Israel’s E1 settlement plan and urged sanctions.

Indonesia–EU Trade: Indonesia’s IEU-CEPA is set to deliver the country’s highest tariff commitments, with 98% of tariff lines liberalized and zero tariffs for key exports like palm oil derivatives, textiles, footwear and rubber, while Indonesia cuts duties on major EU goods including wood pulp, aircraft components and fertilizers. Central Banking & Payments: Bank Indonesia launched the domestic Indonesian Credit Card (KKI) for retail QRIS-linked use, but Jakartans appear lukewarm due to its domestic-only limitation and lack of overseas transaction convenience. Bilateral Security & Maritime: China and Indonesia reaffirmed plans to finalize the South China Sea Code of Conduct under ASEAN centrality, while also expanding defense and law-enforcement cooperation through more regular TNI–PLA engagement. Gold Market Finance: Indonesia’s “gold bank” ecosystem is turning idle bullion into productive banking assets, managing about 153–180 tons valued around Rp360 trillion, with gold ETFs and derivatives seen as catalysts for further growth. Tech & Skills Gap: A new look at Southeast Asia’s digital boom flags a widening mismatch between fast tech adoption and slower progress on skills, affordability, infrastructure and trust. Global Markets: Wall Street closed the week higher as Treasury yields stabilized, lifting the Dow and S&P 500 while Nasdaq also gained. Regional Politics: A coalition of Muslim-majority countries, including Indonesia, condemned Israel’s E1 settlement plan as a threat to Palestinian contiguity and a dangerous escalation.

NTT Earthquake Response: Vice President Gibran pledged continued aid delivery for East Nusa Tenggara quake victims, including those outside evacuation centers, while urging residents to register for housing assistance and checking medical tents and shelter conditions. Illegal Fishing Crackdown: Pacific island authorities detained Chinese and Indonesian boats in a regional operation targeting illegal fishing, warning the activity threatens tuna stocks and island economies. Wildfire Management in Kalimantan: Indonesia said it is treating Kalimantan wildfires as a priority after hotspots rose, deploying helicopters, water-bombing, and thousands of personnel across key provinces while also pushing drilled wells to speed firefighting water access. Air Quality Crisis: Palangka Raya’s air quality hit hazardous levels as haze from peatland fires spread, with officials urging businesses and communities to report fires early. Indonesia–EU Trade Push: Indonesia targets an October signing for the IEU-CEPA, aiming to bridge the gap as EU tariff preferences expire, with talks also highlighting EU investor interest in renewables, digital, agriculture, and EV downstreaming. Indonesia–China Strategic Pivot: Indonesia and China launched a new Comprehensive Strategic Dialogue in Jakarta, agreeing to expand trade beyond $167bn, deepen defense cooperation, and coordinate on minerals, energy, AI, satellites, and fisheries. EV Policy Watch: The electric motorcycle industry warned that cutting purchase incentives from Rp7m to Rp3m could slow adoption, stressing the need for regulatory certainty and faster disbursement. Trade Advantage for Seaweed: Indonesia said seaweed and agar-agar gained US market access after exemption from an extra Section 301 tariff, improving competitiveness versus other exporters. Corporate Deal: Chandra Asri agreed to buy Cycle & Carriage’s auto businesses in Singapore and Malaysia, signaling further regional expansion.

Indonesia Earthquake Response: Grocery stores and gas stations reopened in Flores after the 7.7 quake killed at least 70 and injured nearly 1,200; over 40,000 people remain in tents and shelters, while local governments resumed operations to speed recovery. Creative Economy Push: Indonesia’s Creative Economy Ministry is partnering with Indonesia Open Network (ION) to expand global digital market access for creators, covering cross-border trade, financing, IP protection and AI integration. ASEAN Trade & Investment: Indonesia’s investment minister said ties with Singapore will boost ASEAN resilience, citing Singapore as Indonesia’s biggest FDI source across finance and human capital. El Niño & Food Risks: A record-strong El Niño is on track to intensify extreme weather and raise global food-price pressure, with Indonesia already facing dry-season wildfire impacts. Global Trade Shock: Black Sea grain disruptions from Russia-Ukraine attacks are tightening wheat supplies and pushing Asian buyers to seek costlier alternatives. US-Iran Pressure Watch: Trump’s “Economic D-Day” campaign could disrupt oil and trade flows tied to Iran, with China highlighted as a key buyer facing added pressure. Regulation for AI Startups: A Southeast Asia policy scan says Indonesia is still mixing national guidance with sector rules, while Singapore is seen as the closest benchmark for AI readiness.

Indonesia–Australia/New Zealand Diplomacy: Foreign Minister Sugiono will visit Australia and New Zealand next week, starting in Melbourne for the 10th Indonesia-Australia 2+2 on Aug 26, then heading to Auckland for the Indonesia–New Zealand JMC on Aug 28, with talks spanning defense, maritime security, supply-chain continuity and regional security. Food & Drug Supervision Talent: BPOM is partnering with the University of the Republic of Indonesia to build AI-focused vocational training and decision-simulation labs to strengthen drug and food oversight as threats and tech evolve. Bond Market Liquidity: Finance Minister Purbaya said the US Treasury’s expanded government bond buybacks validate Indonesia’s earlier yield-containment approach, aiming to preserve market liquidity and stability. Energy Subsidy Targeting: Indonesia is considering restricting subsidized fuel purchases for households in income deciles 9–10, with potential savings of about 10% of the energy subsidy budget. Solar Push for Industry: Coordinating Minister Airlangga flagged solar as a priority for greener industrial development, including de-dieselization on small islands and a push toward large-scale solar capacity. Payments Infrastructure: Bank Indonesia launched a domestic credit card for retail use, linking it to QRIS and rolling out with major banks as “first movers.” Disaster & Relief: A 7.7 quake in East Nusa Tenggara has left over 80,000 people homeless and nearly 29,000 homes damaged, with government aid allocations announced. Corporate Moves: Sefas Group agreed to take full ownership of Shell’s Indonesia fuel retail business, while Apexindo won a two-year Pertamina rig contract worth about $74.3m. Business & Trade Links: Indonesia is exploring a Batam–Johor truck-and-cargo ferry by mid-2027, but Malaysia says details still need finalization.

El Niño & Commodities: Malaysia’s palm oil futures hit a 4.5-month high as traders price in possible El Niño-linked supply disruption in 2027, keeping the market in contango and supporting firmer forward prices. Indonesia Policy & Energy: Finance Minister Purbaya signals the electric motorcycle subsidy will restart in September, pending the issuance of the legal regulation. Central Banking: Bank Indonesia’s interim governor Destry Damayanti kept the BI Rate at 5.75%, warning of “higher for longer” global rates and the impact of US Treasury yields on Indonesia. Trade & Agriculture: The government allowed 108,000MT of sugar exports (from imported stocks), a move that could lift local prices. Digital Payments: China expands its Authorized Economic Operator (AEO) coverage and mutual recognition to streamline cross-border trade for more firms, including smaller businesses. Regional Business & Mobility: South Korea will test Arctic shipping to Europe, a route that could reshape logistics but may raise diplomatic friction due to Russia permits.