AGP Executive Report

Energy and Trade: Indonesia has begun cutting pipeline gas exports to Singapore by 31 billion British thermal units a day, redirecting supply to domestic users including Batam. Singapore says the reduction is manageable but has urged both sides to honour contracts. Haze and Accountability: Forest fires have triggered student protests and a wider regional haze probe. Indonesia has named 11 companies as suspects, suspended permits and vowed to revoke licences of firms linked to fires; Singapore is also investigating local companies. Markets and Investment: Jakarta is pledging reforms to restore investor confidence after MSCI warned of a possible downgrade, while Bank Indonesia says the rupiah remains manageable. Food Security: The government is extending rice aid to 33.2 million low-income households through December and accelerating new paddy fields in South Papua, though farmers say roads and fertiliser remain pressing needs. Digital Economy: Indonesia is promoting digital growth and protection, but its free-university plan to attract AI talent could add to fiscal strain.

Wildfire Emergency: El Niño-fuelled fires are Indonesia’s worst since 2015, bringing toxic haze, student protests and new aid for affected areas. In South Sulawesi, flames came within 800 metres of caves holding some of the world’s oldest known paintings. Energy and Trade: Indonesia has cut pipeline gas exports to Singapore by 31 million cubic feet a day, redirecting supplies to domestic power needs. Singapore says the shortfall is small but expects contracts to be honoured; Indonesia is also seeking more gas from the Maha field. Market Confidence: Tensions over a possible MSCI downgrade have put Indonesia’s capital market in the spotlight. President Prabowo has accused MSCI of intimidation, while Bank Indonesia says the rupiah remains manageable. Growth: The economy grew 5.45 percent, and Indonesia reported US$216 billion in investment during Prabowo’s first two years in office.

Energy and Trade: Indonesia began cutting natural-gas exports to Singapore by a planned 31 billion British thermal units a day from Oct. 24, citing domestic needs. Singapore says the actual reduction is 17 billion BTU a day, less than 2% of its demand. Investment and Jobs: State fund Danantara will host a Jakarta technology investment forum on Oct. 26–28, targeting global capital for sectors including semiconductors, energy and AI. The government is also promoting animation as a source of digital jobs and eco-friendly products from small businesses for export. Markets and Growth: Indonesia’s reported 5.45% economic growth contrasts with investor concern over a possible MSCI market downgrade; Bank Indonesia says the rupiah remains manageable. Wildfires: Fires and toxic haze have triggered protests and corporate investigations, while threatening Sulawesi’s ancient cave art and the survival of the Tapanuli orangutan. Regional Ties: Indonesia joined Türkiye, Qatar and Pakistan in a defence-industry cooperation pact focused on joint production and technology sharing.

Forest Fires and Haze: Indonesia says it will prosecute people and companies responsible for deliberate forest burning, as fires threaten ancient cave art and worsen regional pollution. Singapore has widened its haze investigation to 10 locally based firms, while Indonesian authorities have named companies as suspects. Energy Policy: Indonesia began cutting gas exports to Singapore by 31 billion British thermal units a day on Oct. 24, prioritising domestic supply. The move raises questions about revenue and the country’s plans for downstream industry. Political Pressure: Allies of President Prabowo are distancing themselves from his flagship free-meals programme amid food-poisoning cases, logistical problems and corruption allegations. Economy and Markets: Indonesia’s economy grew 5.45 percent, while investment reached US$216 billion in Prabowo’s first two years. But market concerns persist after an MSCI downgrade warning, prompting calls for stronger capital-market reforms.

Haze Crisis: Students across Indonesia are demanding a national emergency declaration as toxic smoke from severe forest fires blankets cities and spreads across Southeast Asia. Jakarta says it will prosecute people and companies linked to the fires; Singapore has sought information from 10 locally based firms. Economic Outlook: Indonesia’s economy grew 5.45% in the first half of 2026, the government says, driven by investment and productive sectors. Officials also aim to raise fishers’ terms of trade to 120 next year, from 108. Major Drug Seizures: Police seized 1.2 tonnes of liquid methamphetamine in Aceh and intercepted 1.16 tonnes of ketamine off Sumatra, arresting 11 people in the Aceh operation. Defence Cooperation: Indonesia joined Turkey, Qatar and Pakistan in a pact to develop defence manufacturing, research and training. The agreement does not establish a mutual-defence commitment. Disaster Recovery: A government task force says homes and essential services are being restored in North Sumatra communities hit by landslides.

Forest Fires and Haze: President Prabowo says foreign firms linked to recurring fires could lose their permits, while police have named 11 corporations as suspects. El Niño-driven drought is worsening the crisis and keeping pressure on Indonesia to curb smoke crossing borders. Drought Preparations: BNPB is preparing for a delayed rainy season that could stretch into early 2027, with firefighting, weather modification and clean-water deliveries underway. Markets and Growth: Fitch says Indonesia is unlikely to reach 8% growth soon, as officials face investor concern over a possible MSCI market downgrade. Energy and Trade: Jakarta is weighing gas export curbs as it prioritizes domestic supply. Indonesia Eximbank is also urging more small businesses to export; just 15.7% of the country’s 65.5 million MSMEs currently do so. Defence Industry: Indonesia has joined Türkiye, Qatar and Pakistan in a pact to expand defence production, research and training.

Forest-Fire Crackdown: President Prabowo vowed to revoke licenses of foreign-owned firms repeatedly linked to fires, with company names expected later. The government has allocated Rp1.235 trillion (US$68 million) for firefighting and health care as 71,000 personnel tackle blazes and haze. Public Unrest: Protests over living costs, fires and alleged corruption turned violent in Jakarta and other cities, with police vehicles set alight and thousands of officers deployed. Market Confidence: An MSCI downgrade warning has shaken Indonesian stocks; authorities have promised capital-market reforms as regulators issue record fines for violations. Trade and Investment: The Indonesia-Canada trade deal is set to take effect on Dec. 1, while Jakarta is seeking approval to begin CPTPP accession talks in November. Household Support: Prabowo is targeting Rp400 trillion in loans for 28 million families in 2027, including farmers, fishers and small businesses.

Market Confidence: OJK imposed record fines of Rp2.1 trillion ($116.7 million) for violations involving three listed companies as Indonesia works to head off an MSCI downgrade. CIMB denied plans to privatise its Indonesian banking unit, CIMB Niaga. Haze Crisis: Police have named 11 companies as suspects in fires driving regional haze. Acute respiratory infection cases in seven affected provinces exceeded 314,000, including more than 70,000 among children under five. Indonesia and Malaysia are discussing joint fire monitoring and prevention. Economy and Politics: Student protests have challenged rising living costs and the government’s response to fires. President Prabowo’s administration touts self-sufficiency in eight food commodities, while Energy Minister Bahlil Lahadalia says gas exports may be halted to prioritize domestic needs. Regional Ties: Indonesia signed a defence-industry cooperation pact with Qatar, Türkiye and Pakistan, covering joint production, research and training.

Market Turmoil: President Prabowo accused MSCI of trying to intimidate Indonesia after its warning that the country could lose emerging-market status. The Jakarta Composite Index rose 0.94% on Wednesday but remains down more than 40% this year. Regulators are promising reforms to improve transparency. Forest Fires: Indonesia’s fires have burned nearly 2 million hectares, worsening haze across Southeast Asia. Authorities are investigating companies suspected of involvement and coordinating firefighting assistance as health concerns and regional pressure mount. Defence Industry: Indonesia, Qatar, Pakistan and Türkiye signed the Badr pact in Doha to expand joint defence production, training and research. Rupiah Support: Bank Indonesia held its benchmark rate at 5.75% and said foreign-exchange hedging incentives had attracted US$9.9 billion in inflows since June.

Protests: Students rallied across Indonesia as Prabowo marked two years in office, demanding action on wildfires, living costs and corruption, and better access to education and healthcare. Haze Crisis: Fires have burned nearly 2 million hectares, exposing more than 10 million people to unhealthy air. Health officials recorded over 314,000 respiratory illness cases, including many among children. Singapore is widening scrutiny of companies linked to the fires, while Malaysia has offered firefighting aircraft and helicopters. Market Turmoil: Indonesian shares rebounded with regional markets on Wednesday after a historic selloff, but investor nerves remain over MSCI’s proposal to downgrade Indonesia from emerging-market status. The proposal is not final; a decision is expected by June 2027. Regulators have pledged market reforms. Economic Outlook: The protests underscore public concern that economic gains have yet to ease pressure on households, even as the government reports progress on poverty and investment.

Markets: Indonesia’s stock index rebounded 5.65% on Tuesday after hitting a yearly low, but analysts warned the recovery may be short-lived as MSCI weighs downgrading the market from emerging to standalone status. OJK says it is pressing ahead with reforms, including stricter shareholding disclosures and higher free-float requirements. Wildfires: Fires have burned nearly two million hectares, worsening regional haze and drawing protests over climate policy and living costs. The government says it is stepping up firefighting and pursuing companies suspected of starting fires. Energy: Indonesia will revive its oil and gas industry forum on Oct. 28–29 after an eight-year break, as it seeks investment and ways to meet its 2026 production target of 610,000 barrels a day. Regional Cooperation: Indonesia and Malaysia agreed to strengthen agency-level cooperation on online child safety, with plans to involve Singapore in a trilateral effort.

Market Turmoil: Indonesian stocks rebounded 3% Tuesday after a record two-day rout, but MSCI’s threat to shift the market out of emerging-market indexes continues to rattle investors. The exchange has halved its daily price-drop limit as officials promise reforms to improve transparency and curb coordinated trading. Forest Fires: Hotspots jumped to 1,104, while fires have burned nearly two million hectares and sent haze across the region. South Kalimantan police have advanced cases against four companies; nationally, 98 fire reports have reached the investigation stage. Prabowo’s Second Anniversary: About 9,500 police were assigned to Jakarta as students planned protests over the fires and market slide, amid declining approval for the president. Investment: Indonesia recorded Rp1,539.2 trillion in investment through September, creating 2.19 million jobs; downstream industries accounted for a growing share as the government seeks higher-quality investment.

Market Rout: Indonesia’s stocks hit a six-year low on Monday after MSCI warned it could demote the country from emerging-market status, citing concerns over ownership transparency and trading practices. The rupiah weakened past 18,000 to the dollar, prompting Bank Indonesia to step up market intervention. Wildfire Crisis: Fires burned more than 1.9 million hectares through September, according to satellite monitoring. Jakarta says it has accepted firefighting help from Malaysia and Singapore; police are investigating 98 company-linked cases, while Singapore is expanding preventive notices to Indonesian firms. Research and Business: BRIN says 16 of its scientists made the 2026 global Top 2% list, up from 12 last year. The government also extended halal certification deadlines for several sectors to 2028, giving businesses more time to comply.

Markets: Indonesian stocks hit a six-year low after MSCI warned it may shift the country from emerging-market to standalone status. The exchange cut the daily share-price fall limit to 7% as regulators faced pressure to address investor concerns. Haze and Fires: Smoke from wildfires pushed Southeast Asia’s haze alert to its highest level. A dry-ice trial in South Sumatra showed mixed results, with visibility improving at times before worsening again. Food Costs: El Niño-driven drought and delayed rains have sent rice prices to record highs, squeezing households as the UN warns food inflation could persist into 2027. Trade: Trade Expo Indonesia 2026 booked US$22.94 billion in transactions, more than double its target; small businesses contributed US$510.8 million. Livelihoods: Poverty fell to 8.07% in March, but many fishers remain financially vulnerable, with limited cold storage leaving them little choice but to sell their catch cheaply.

Haze Crisis: Indonesian wildfires have pushed Southeast Asia’s haze alert to its highest level, closing schools and worsening respiratory problems across the region. Jakarta is testing dry-ice cloud seeding, while Singapore has put seven Indonesian firms on notice and is weighing legal action. Market Shock: Indonesian shares suffered their steepest one-day fall in nearly three decades after MSCI warned it could reclassify the market as standalone, risking foreign investment. Investors sold Rp3.34 trillion in shares on Friday, amid concerns over market transparency and governance. Growth Push: The government is targeting 6% growth in 2027, looking to digital investment and higher-value exports; the digital economy’s gross merchandise value approached US$100 billion last year. Industry and Food: Officials say 26 downstreaming projects worth Rp225 trillion are in preparation, while Indonesia reported no rice imports for domestic consumption in 2025 after a record harvest.

Market Turmoil: Indonesia’s stocks suffered their steepest single-day fall in nearly three decades, as an MSCI downgrade threat raised the risk of billions in outflows. The rupiah also broke 18,000 to the US dollar, prompting Bank Indonesia to pledge intervention. Haze Crisis: Singapore has issued notices to seven Indonesian firms over fires linked to toxic haze, while Indonesia tested 2.4 tonnes of dry ice over South Sumatra. Visibility improved, but officials say it is unclear whether the treatment was responsible. Military Justice: The Constitutional Court has ordered lawmakers to revise the Military Justice Law within two years. Presidential adviser Bambang Soesatyo urged the government and parliament not to rush the changes.