AGP Executive Report

Cultural Repatriation: The FBI returned Indonesian cultural artefacts to President Prabowo, with Culture Minister Fadli Zon saying the items—linked to Papua’s Dani and Asmat communities and Lake Sentani—were smuggled illegally and are being restored to Indonesia’s cultural sovereignty. Biometric SIM Registration: The Communications Ministry urged mobile operators to make biometric SIM registration accessible and inclusive, including for people with disabilities, while stressing operators must not store biometric data and should keep on-the-ground compliance monitoring. Sovereign Finance: Indonesia plans about US$1 billion in renminbi Panda Bonds to diversify funding away from the US dollar, using local-currency settlement links with China’s central bank frameworks to reduce rupiah pressure. Public Health & Vaping: President Prabowo signaled a possible total vape ban if a joint review finds higher risks and continued links to new narcotics, ordering tighter supervision across import and distribution channels. Education Access: Indonesia’s tuition-free Sekolah Rakyat program targets about 45,000 students in 2026, expanding quotas to reach children out of school due to economic hardship. ASEAN Diplomacy: Indonesia and Australia pushed for stronger economic resilience and maritime security at an ASEAN-Australia ministerial meeting in Manila. Maritime Innovation: The Ocean Institute of Indonesia is set to drive marine research, vocational talent, and innovation nationwide. Scam Warning: A UN report says Southeast Asia’s scam networks have evolved into a transnational “service” economy, costing victims up to $114.1B in 2025.

ASEAN Security Watch: Top diplomats gathered in Manila for the ASEAN Regional Forum as the Iran war and the Strait of Hormuz blockade threaten energy and food supply chains, with US Secretary of State Marco Rubio and China’s officials among the key voices. Rupiah & Banking: Bank Indonesia held its benchmark rate at 5.75%, leaning on inflow support to stabilize the rupiah after recent currency pressure. Indonesia’s Financial Push: Indonesia is set to issue its first panda bonds (up to 7 billion yuan) and is also moving ahead with plans for an Indonesian International Financial Center, aiming to turn policy into investor-ready execution. Energy Transition & Power Resilience: A new Ember report argues distributed solar, wind and storage can better withstand extreme climate shocks than fossil-heavy grids across ASEAN. Coconut Downstreaming: Indonesia is targeting major growth in coconut-based exports, backed by a long-term downstreaming roadmap and financing, research and incentives. Trade & Diplomacy: Indonesia and China agreed to accelerate the Twin Parks scheme, prioritizing projects around Batang Industropolis SEZ. Human Rights: An ASEAN group condemned Indonesia’s move to label “LGBTQ culture” as a non-military threat, warning it could legitimize discrimination. Business & Travel: Saudia and Garuda Indonesia signed an MoU to expand connectivity, including single-ticket options and stronger Umrah/Hajj support. Commodities: Malaysian palm oil edged up on El Niño worries and expectations of tighter Indonesian supplies under the B50 biodiesel mandate.

Coconut Downstream Push: Indonesia targets 151,554 hectares for coconut downstream development in 2026, backed by about Rp427 billion, with seed, fertilizer and land-prep support across 28 provinces to raise value-added output. Digital Connectivity Boost: The Nongsa–Changi undersea cable is now set to strengthen the Indonesia–Singapore digital corridor for data centers, cloud and AI, with officials highlighting faster, low-latency regional connectivity. Aviation Upgrade: Indonesia is moving Kertajati International Airport toward an MRO hub, with asset transfers to the central government underway and operations targeted to start this year. AI Tightrope: Indonesia’s decision to join China-led WAICO as a founding member is drawing questions about balancing China and US tech rivalry, though Jakarta says the initiatives serve different goals. Marine Conservation: The Forestry Ministry is partnering with OceanX to improve management of seven marine national parks using stronger scientific mapping, biodiversity inventories and restoration work. Energy Survey: Indonesia is drafting a legal framework to survey “white hydrogen” potential in Central Sulawesi after earlier research pointed to promising sites. Premium Banking: UOB and Visa are rolling out new Visa Infinite Privilege and Private tiers across ASEAN, upgrading 300,000+ UOB cardholders without downgrades. Free Meals Turmoil: Indonesia’s free-meal program faces further disruption as the head of the troubled agency resigns on health grounds amid budget cuts. ASEAN Diplomacy: ASEAN granted Turkey full Dialogue Partner status, expanding cooperation across political-security, economic and socio-cultural areas.

Foreign Policy Debate: A new commentary argues Indonesia risks weakening its foreign-policy institutions by letting presidential activism replace the process that should make diplomacy durable. Anti-Corruption & Governance: Pressure is mounting around the AGO’s graft takeover linked to Febrie Adriansyah, with allegations tied to major state losses and energy-sector scandals. Nutrition Program Fallout: Indonesia is probing the Blora free-meals poisoning after 19 students fell ill; the food supplier unit was temporarily shut while health officials join the investigation. Public Procurement Scrutiny: The BGN denies electric motorcycles for a nutrition unit were bought with corruption funds, saying payments used state budgets and focusing on suspected markup. Regional Business Links: Singapore launched a Professional Services Centre network to help firms expand across Asia, with Jakarta expected to join later this year. Energy Transition: Indonesia says it has 93 hydrogen ecosystem projects worth about US$2.05b, aimed at accelerating “dedieselization.” Finance Law: Parliament passed the Indonesia International Financial Centre (PFII) bill into law, moving fast but leaving key questions unanswered. Digital Safety: France approved an under-15 social media ban (and phone limits in high schools), adding to a growing regional trend on youth online protection.

Free Meals Budget Cut: Indonesia has trimmed President Prabowo’s signature free school meals programme budget again to 229 trillion rupiah (about US$12.81b), with officials warning more efficiency cuts may follow as the target shifts from fixed recipient numbers to better quality and fewer cases of food poisoning. Energy Policy: The government says the B50 biodiesel programme is already cutting oil imports by 250,000–300,000 barrels per day, pushing imports down to about 700,000–750,000 bpd as diesel import phasing continues. Food Security & Fisheries: Coordinating Minister Zulkifli Hasan is pushing protein self-sufficiency with plans for 40,000 thematic fish-farming villages, aiming to boost domestic supply and fisheries exports. Education Reform: The Ministry of Primary and Secondary Education is preparing Integrated National Schools to blend the national curriculum with locally tailored content, including foreign languages and digital skills. Digital & Finance: Indonesia will issue a US$1b debut renminbi Panda Bond on July 23 to test demand in China’s onshore debt market, while Indonesia also moves ahead with a law to establish international financial centres. Tourism & Trade: Seychelles is exploring cooperation with Indonesia on developing the Pemapak hot springs in East Kalimantan, while a small tempeh-chip maker in Tanjungpinang has expanded into Singapore via Batam. Governance & Compliance: Indonesia’s Law Ministry says higher fees for renouncing citizenship and naturalisation will take effect Aug. 1, urging the public not to worry about the impact.

Financial Hub Push: Indonesia’s parliament panel has given the go-ahead to a bill to create an international financial centre, with lawmakers debating key rules and expected tax incentives aimed at attracting Rp 300t–Rp 500t in investment, potentially with Bali in the spotlight. Jobs & Industry: Layoffs hit 32,389 in the first half, with West Java the biggest contributor, though officials warn the real impact may be higher than official Job Loss Insurance figures. Food Security & Energy: President Prabowo ordered faster sugarcane rejuvenation—targeting 100,000 hectares per year in two years—and linked the plan to ethanol expansion for E20 ambitions. Rural Economy Under Scrutiny: Questions are growing over KDMP cooperative procurement run by PT Agrinas, after reports of Rp 1.8t–Rp 2.56t fan spending that lawmakers say needs clearer pricing and vendor selection. Corruption Watch: Prabowo reiterated zero tolerance as the Attorney General’s Office continues investigating former top prosecutor Febrie Adriansyah without detaining him, drawing public concern. Public Services & Daily Life: Police guarded gas stations in North Sumatra amid fuel scarcity, while commuters complained about major congestion from ongoing Jakarta–Tangerang toll road repairs. Digital Rules for AI: Indonesia’s copyright draft bill would recognize AI-assisted works with human input, ban imitation of distinctive styles, require AI disclosure, and may force tech platforms to compensate content used for training.

SOE Overhaul: President Prabowo says Danantara has restructured 250 state-owned entities in 18 months, cutting overhead costs by Rp50 trillion and targeting a further reduction to cap SOEs at 350 by end-2026. Indonesia–Chile Deal: Foreign ministers Sugiono and Chile’s Francisco Pérez Mackenna discussed deeper cooperation in critical minerals, science/tech, agriculture and health, while highlighting IC-CEPA tariff-free access for thousands of Indonesian products. Digital Connectivity: Singapore and Indonesia marked the arrival of the Batam–Changi undersea cable, aimed at faster, more efficient links for data centres and broader ASEAN digital integration. AI Push: Indonesia is betting on AI to power its digital economy, with officials pointing to a potential jump to about US$600 billion regionally under ASEAN’s digital framework. Cyber Crime Probe: Jambi police hunt a Bulgarian suspect behind a Bank Jambi cyber theft involving 6,609 accounts and Rp144 billion losses. Energy & Commodities: Nickel ore supply is flagged as vital for downstream smelters as Indonesia adjusts quotas, while oil prices ease after Iran says US contacts continue via mediators. MSME Support: The MSME ministry reiterates policy backing for MSMEs and ride-hailing drivers, tying welfare goals to tangible cabinet delivery. Regional Aviation: AirBorneo plans ASEAN expansion, starting with Kuching–Singapore on July 22 and a Jakarta route within two months.

Indonesia–AI Diplomacy: Indonesia has joined the China-initiated World Artificial Intelligence Cooperation Organisation (WAICO) as a founding member, with Coordinating Minister Airlangga Hartarto saying it will help the country keep pace on AI development and shape global governance. Digital Transformation Talks: During a Shanghai visit, Airlangga met Chinese tech firms to discuss AI, cloud infrastructure, cybersecurity, digital talent, and greener data-centre energy, tying cooperation to Indonesia’s broader digital agenda. Blue Economy Showcase: Indonesia highlighted Banyuwangi’s sustainable marine economy model at the ASEAN-ID Blue Forum, pitching it as a replicable approach across ASEAN. Aviation & Tourism: TransNusa will launch direct Bali–Phuket flights from 9 September, starting with four weekly services and ramping up to daily in October through peak season. Education Policy: The Education Ministry is drafting policies with local governments to address low-enrolment schools, using Dapodik data and focusing on learning quality, teacher capacity, and facilities. Public Safety: A bomb threat sent via WhatsApp to a Jakarta-area school led to a police bomb-squad response; the suspect was arrested and no device was found. Regional Humanitarian Update: Survivors from a boat sinking off South Sulawesi were rescued after days at sea, including a seven-year-old girl.

Indonesia’s Economy Watch: Bank Indonesia survey shows employment growth cooled in Q2 2026, with manufacturing the biggest drag as hiring absorption fell. Energy Policy: President Prabowo says diesel imports have stopped since July 2026 after B50 biodiesel rollout, aiming to keep fuel spending circulating domestically. Downstream Push: NEXT Indonesia Center urges faster downstream processing and export diversification to build a more resilient, higher-value trade base. LNG Milestone: The long-delayed Abadi Masela LNG project is moving ahead, framed as a catalyst for eastern Indonesia’s growth and energy security. Digital & AI Partnerships: Coordinating Minister Airlangga invites Huawei and ByteDance to back Indonesia’s digital transformation, including AI, cloud, talent, and cybersecurity. Governance & Oversight: Academics and civil society launch Indonesia’s first citizen-led shadow cabinet, citing weak checks and balances under Prabowo. Trade & Food Security: Indonesia explores poultry exports to China and the Middle East to absorb oversupply and improve farmer welfare. Regional Diplomacy: US Secretary of State Marco Rubio heads to Manila for ASEAN-related meetings, spotlighting a “free and open Indo-Pacific.” Wildlife Conservation: Experts warn Indonesia’s caged songbird trade is booming, threatening forests and bird populations.

Food & Prices: Indonesia’s free nutritious meal program is back nationwide, with nearly 30,000 kitchens reopening as students return—pushing up prices for rice, vegetables, spices, eggs and broiler chicken, including a 4% jump in chicken prices in a week. Investment & Finance: Danantara’s investment chief says the sovereign wealth fund must “outlast presidencies” to build long-term investor confidence, pointing to Jakarta’s stock market demutualisation and Bali’s push as a financial hub. Corruption & Enforcement: Police uncovered 74kg of gold bars hidden in a secret safe at a Bogor home, after a locksmith cut through a manual lock in about 15 minutes; authorities link the find to an ongoing corruption probe. Anti-Fraud Probe: Malaysia’s MACC opened an investigation into KWAP’s RM200 million loss tied to Indonesia’s eFishery, after claims of manipulated financial reports. AI & Indonesia-China Ties: Indonesian officials at WAIC in Shanghai urged faster progress in AI and robotics, while China’s foreign minister highlighted Indonesia’s role in a new World AI Cooperation Organization and invited more investment. Connectivity & Aviation: InJourney Airports promoted six regional airports to boost ASEAN-China air links, seeking more international flight collaborations. Energy & Commodities: Nickel prices are rising on Indonesia’s tighter nickel ore quota plans and sulfuric acid shortages, signaling a more volatile 2026 outlook. Maritime Safety: Four Indonesian seafarers held by Somali pirates for over two months remain in limbo as the government awaits responses and coordinates with the shipowner.

AI Diplomacy: Indonesia backs the China-led World AI Cooperation Organization (WAICO) while Airlangga Hartarto says AI should stay neutral and non-political, with cooperation balancing China and the US. Global Governance: Xi Jinping frames AI as a “symphony of global collaboration” at WAIC 2026 in Shanghai as 29 countries sign WAICO’s creation. Digital Economy: Airlangga invites Huawei and ByteDance to deepen Indonesia’s AI, cloud, cybersecurity, and digital government/SME services, including data-center green energy. Finance & Trade: Bank Indonesia pushes Indonesia’s coffee exports via JCFF in Surabaya, aiming to strengthen the country’s position as a top global producer. Energy Transition: Prabowo targets up to 50 ethanol plants for the E20 program and Indonesia eyes 100 GW solar projects with Chinese partners. Business & Mobility: VinFast opens 20 e-motorcycle dealerships nationwide, expanding its green mobility ecosystem. Legal/Investments: Malaysia’s MACC investigates KWAP’s RM163.4m eFishery loss over alleged fraud and manipulated financial reports. Public Health & Travel: Singapore, Indonesia, and Malaysia brace for severe transboundary haze later this year, with El Niño raising fire risk.

Energy Policy: Indonesia will stop diesel imports starting July 2026 after B50 biodiesel success, with the ESDM Ministry saying the program could save about Rp170 trillion in foreign exchange in 2026 and cut emissions. Food Security & Cooperatives: The government is expanding Red and White Village Cooperatives into “government infrastructure” that buys farm produce when prices slump and channels social aid and subsidized goods through local hubs. AI Governance & Diplomacy: China’s Xi Jinping used the WAIC in Shanghai to push AI as a global “symphony” not dominated by one country, while WAICO was signed by 29 founding members including Cambodia, aiming to narrow the digital divide. Indonesia’s AI Push: A Taiwan-based firm says it has signed deals to build AI computing data center and network infrastructure in West Java, with construction and equipment contracts totaling tens of millions of dollars. Global Markets: U.S. stocks ended the week lower as AI-linked tech dragged sentiment, while Indonesia’s nickel outlook remains shaped by oversupply and new supply pathways. Weather Risk: El Niño early action is being urged as extreme heat, droughts and floods threaten food and safety across multiple regions.

AI Governance & Copyright: Indonesia is preparing a copyright overhaul that explicitly recognizes AI in content rules, bans AI from imitating a creator’s distinctive style, and requires disclosure—while Google warns it could hurt local creators and innovation. Global AI Cooperation: China launched the World Artificial Intelligence Cooperation Organization (WAICO) at WAIC in Shanghai, with 29 countries including Indonesia signing to set shared AI governance principles. Central Banking Watch: Bank Indonesia said it is monitoring liquidity distribution across banks to keep interbank rates stable and support growth, after government fund moves affected liquidity. Business Pulse: Bank Indonesia’s survey shows Q2 business activity strengthened, led by agriculture, construction, mining, accommodation and food & beverage, with capacity utilization rising. Energy Security: Indonesia is pushing grid reliability as a national security issue and is also advancing the Masela LNG push, seen as a long-delayed upstream breakthrough for gas supply and energy security. Rural Economy via Cooperatives: The Red and White Village Cooperatives (KDMP) are expanding beyond grocery stores into wider subsidized distribution and social aid, with transactions hitting Rp56.8b in 2026. Public Safety Crackdown: Indonesia says it has blocked 3.7 million illegal gambling websites since 2024, suspending tens of thousands of bank accounts tied to operations.

SEA V.Cup Focus: Josh Ybañez urged first-time men’s national team players to keep fighting as the Philippines face Indonesia in the SEA V.Cup, after he played through an ankle sprain in a loss to Cambodia. Indonesia Economy & Finance: Indonesia’s investment pace in 2026 is still on track but slower than recent years, with Q2 realized investment up 7.1% to Rp 511.8 trillion. AI Push: Indonesia is drafting a national strategy and road map to move from basic AI use to deeper capability across government, healthcare, finance and public services. Energy & Industry: Prabowo-backed Abadi Masela LNG development is set to expand eastern Indonesia’s gas supply, with Indonesia prioritizing domestic market delivery. Health & Policy: Indonesia is considering major fiscal incentives for the planned Indonesia International Financial Center, including a proposed zero tax rate for up to 50 years. Global Trade Watch: Palm oil prices in Malaysia rose on bargain buying, but higher inventories in Indonesia and Malaysia and weaker demand capped gains. Regional Humanitarian: UN agencies warn that more than 500 Rohingya refugees may have died after two boats capsized off Myanmar.

Energy & Industry: President Prabowo Subianto broke ground for the Abadi Masela LNG project, a roughly US$20.9b investment expected to support Indonesia’s industrial push, with officials saying at least 60% of gas will go to domestic use and up to 40% for exports. Domestic Power: PLN is fast-tracking Bali’s energy independence plan, citing 8.02% demand growth and the need for a more reliable grid as the island relies on Java-Bali supply. Food & Trade: Indonesia is looking to capitalize on higher global rice prices and surplus stocks, with talks underway with countries including Malaysia and Singapore. Digital Governance: ANTARA is urging a presidential regulation to strengthen the fight against disinformation, while the communications ministry maps steps to close Indonesia’s AI capability gap beyond basic adoption. Cooperatives: The Ministry of Cooperatives will gather boards of the Red-White Village Cooperatives to fix operational issues and prepare new regulations. Humanitarian: UN agencies fear more than 500 deaths after two boats carrying Rohingya refugees sank off Myanmar. Regional Connectivity: TransNusa will launch a direct Bali–Phuket route starting September 9, 2026.

Indonesia Debt Watch: Finance Minister Purbaya Yudhi Sadewa said Indonesia’s debt is still manageable, pointing to a debt-to-GDP ratio of about 40% and a stable sovereign credit rating despite debt exceeding Rp8,000 trillion. Monetary Policy Impact: Bank Indonesia said its June benchmark rate hikes helped pull in about Rp105 trillion in foreign inflows into government bonds and Bank Indonesia Rupiah Securities by early July. Family Planning Push: The Population and Family Development Ministry is prioritizing family planning for the lowest-income households to cut unmet contraceptive needs and support stunting reduction. Market Oversight: The Indonesia Stock Exchange added 37 firms to its high shareholding concentration watchlist, using a new price impact ratio to flag potential ownership concentration. Digital Finance & Crypto: Bybit officially launched its locally operated Indonesia platform in phases, while Tokocrypto rolled out tokenised stocks. Energy & Food Security: Indonesia’s nickel market outlook for Q3 faces structural headwinds as policy and supply uncertainties interact with oversupply pressures. Regional Dealmaking: BRICS adopted a Labour Declaration in Hyderabad and India launched “BRICS CONNECT” to boost skills and labour cooperation. Tourism & Business: Radisson Hotel Group outlined expansion plans across Southeast Asia, including Indonesia.