AGP Executive Report

US Tariff Pressure: The USTR has proposed extra duties of 10% or 12.5% on imports from 60 economies, including Indonesia, after forced-labour findings under Section 301—an escalation that could complicate ongoing trade talks. Rupiah Watch: Bank Indonesia says it will keep tightening coordination with the government, regulators, banks and market players as the rupiah weakens to around Rp17,900 per USD, using policy tools to restore stability. Energy Restructuring: PLN targets cutting its group entities from 44 to 23 by 2028 to boost efficiency and reliability, with progress on the 2025–2034 power plan and post-disruption strengthening. Food Security & Kids: Indonesia’s child protection watchdog urges the National Nutrition Agency to prioritize the most vulnerable regions in the Free Nutritious Meals rollout and tighten food safety and governance. Wildlife Crackdown: Indonesia’s forestry ministry dismantled an illegal elephant ivory network in Bali, filing a case ready for trial after cyber patrols flagged contraband carvings. Tourism Push: The tourism ministry promotes Indonesia to China via sales missions in Shanghai and Guangzhou, aiming to grow arrivals and tourism-linked business ties. Climate Alert: WMO warns El Niño is likely to develop soon, raising risks of extreme heat, drought and heavy rainfall—another stress test for Indonesia’s air quality and economy.

Pancasila Economy Push: President Prabowo framed his economic “transformation” as a Pancasila mission, promising welfare-first growth and pointing to free nutritious meals and rural cooperatives—while the program continues to face scrutiny over costs and execution. Free Meals Overseas Expansion: Indonesia’s National Nutrition Agency is weighing a pilot to send the free-meals program to Saudi Arabia’s Indonesian School in Jeddah, even as critics question food safety and procurement issues at home. Papua WWII Blast: Five people were killed and three are missing after a suspected World War II ordnance explosion in Biak, with authorities pausing searches until bomb disposal teams secure the area. Trade & Rupiah Pressure: Indonesia posted its smallest trade surplus in over six years in April as the rupiah weakened, imports rose, and higher costs linked to the Iran war and chip prices weighed on the numbers. Palm Oil Skills Boost: Indonesia will fund 5,000 palm-oil scholarships this year via BPDP, aiming to build skilled, innovation-ready plantation talent. Climate Warning for Indonesia: The UN’s WMO says El Niño is likely to intensify this year, raising the risk of drought and extreme weather across Indonesia and the wider region. EV Competition in Asia: Asia’s EV race is accelerating, with China’s domestic champions and industrial policy shaping the market beyond Tesla’s influence.

Climate & Disaster Watch: The UN weather body and the World Meteorological Organization warn a likely El Niño event in June–August 2026 (about 80% now, rising to 90% through at least November) could bring extreme heat, drought and heavier rainfall risks across many regions, including Indonesia. Inflation & Trade: Indonesia’s annual inflation hit 3.08% in May as food and transport prices rose, while exports grew 5.48% in Jan–Apr and the country posted a trade surplus. Waste-to-Fuel Tech: BRIN says it has developed second-generation pyrolysis tech to convert plastic waste into industrial fuel, aiming to scale capacity from 1.25 tons/day and eventually up to 5 tons/day. Business & Startups: SG Enviro closed a Series A to expand across Southeast Asia; Return Helper raised USD 4 million to grow cross-border returns and build AI agents for return decisions. Education & Youth: Indonesia plans to revitalize 3,865 early childhood education schools for the 13-year compulsory program and will offer certification for MagangHub interns in 15 competency areas. Health & Culture: BPOM says jamu could reach Rp1.2 trillion, pushing for standardized herbal medicines and stronger research and downstream processing. Legal & Governance: Former Gojek founder Nadiem Makarim denies corruption allegations in a laptop procurement case as investors worry about legal risks. Digital Safety: Malaysia begins enforcing an under-16 social media ban with age verification, adding pressure on the region to tighten child online protections.

Digital Public Infrastructure Push: Indonesia and Papua New Guinea have joined the 50-in-5 campaign, linking digital identity, payments and data exchange to speed trusted, interoperable public services. Food Program Oversight: Indonesia’s nutrition agency is tightening standards for Free Nutritious Meals kitchens, warning of suspensions over hygiene, supplier counts and food-poisoning incidents. Social Media Rules: Malaysia is enforcing a ban on under-16s creating social media accounts, requiring ID-based age checks for major platforms and setting steep fines for non-compliance. Indonesia Banking/Inflation Watch: Foreign banks warn inflation could overshoot official targets as price freezes fade and food costs feed through, with Indonesia flagged alongside the Philippines. Defense & Security Dialogue: At the Shangri-La Dialogue, regional leaders debated bloc-based security risks while China promoted its security vision, as Japan’s military shift drew scrutiny. BRICS Disaster Resilience: Delegates from 11 countries will meet in Puri, Odisha (June 3–5) to discuss disaster risk reduction financing and resilient infrastructure. Indonesia Business & Finance: DBS plans to open 18 new wealth centers across Asia (including Indonesia) by end-2027, betting on continued demand for adviser-led wealth management. Sports Spotlight: Satwik-Chirag won the Singapore Open men’s doubles, crediting long-term trust and communication with their “four eyes” strategy.

Pancasila Push: President Prabowo used Pancasila Day in Jakarta to argue Indonesia’s economy must be rooted in religious values, humanity, unity, and social justice, warning that growth must translate into better living standards for all. Resource Export Overhaul: He also defended a “single-channel” export policy for strategic commodities via PT Danantara Sumberdaya Indonesia, saying profits have too often flowed abroad instead of benefiting Indonesians. Coastal Risk Watch: BRIN warned Java’s northern coast faces rising sea levels and land subsidence up to 4.3 mm/year, driven by groundwater extraction and aquaculture—raising flood and inundation risks. Health Security Research: BRIN is mapping wildlife virus genomes in North Sulawesi to strengthen early detection of zoonotic disease threats. WWII Ordnance Tragedy: A suspected WWII shell exploded under a stilt house in Papua, killing five, injuring nearly 20, and destroying nine homes. EV & Charging Plans: VinFast is expanding in India with ChargeZone to build a nationwide charging network, starting with co-branded stations. AI Infrastructure Investing: Indonesia’s sovereign wealth fund INA says it has deployed about Rp74.5 trillion so far, with roughly 30% into digital infrastructure and AI data-centre bets. Online Safety Trend: Malaysia began enforcing age verification and blocking social media accounts for under-16s, aligning with similar moves across the region.

Indonesia–China trade: Indonesia expanded fishery export access to China after China approved eight more processing units, bringing the total to 638; exports to China hit 491,528 tons worth US$1.04b in 2025. DSI reporting push: Indonesia is moving ahead with mandatory DSI reporting for natural resource exporters starting June 1, with Danantara also set to name its DSI management team next week. Rupiah & tourism: Indonesia’s tourism ministry says rupiah weakness could make the country more affordable for foreign visitors, boosting arrivals and longer stays. Shangri-La Dialogue fallout: At Singapore’s Shangri-La Dialogue, US Defense Secretary Pete Hegseth’s remarks kept “China” at the center, while Japan’s defence chief rejected “new militarism” accusations and pointed to China’s own military buildup. Hajj planning: Indonesia’s Hajj ministry is designing 2027 and reviewing 2028 plans, focusing on how rising avtur fuel costs could affect pilgrimage costs. Wildlife milestone: Taman Safari Indonesia in Bogor unveiled Rio, a giant panda cub born in Indonesia, marking a new conservation collaboration milestone. Sports (Jakarta readers): Satwik-Chirag ended a two-year BWF title drought by winning the Singapore Open men’s doubles, beating Indonesia’s Alfian-Fikri in three games.

Indonesia-France Strategic Push: President Prabowo’s Paris visit ends with plans to upgrade ties into a Comprehensive Strategic Partnership, with defense, renewables, education and research highlighted as Jakarta seeks deeper security cooperation. BrahMos Missile Momentum: India’s Defence Secretary Rajesh Kumar Singh says Vietnam’s BrahMos deal is already signed (not yet publicly announced) and Indonesia’s pact is in the final stages—another step for India’s defense exports into ASEAN. Regional Trade Connectivity: Indonesia’s Consulate in Penang backs a logistics MoC linking BNCT, Penang Port and Perlis Inland Port, aiming to speed cross-border cargo flows and connect digital systems for an ASEAN–East Asia corridor. Rupiah-Era Caution for Indonesia: With global energy and supply pressures continuing, Indonesia’s policy focus remains on stabilizing costs and keeping key prices in check as regional markets feel the squeeze. Public Safety Abroad: Penang DOSH ordered work halted after an Indonesian worker was killed in a demolition accident, pending investigation. AI’s Energy Reality: A new look at ChatGPT usage shows AI demand rising fast in emerging markets including Indonesia—alongside growing power needs.

Indonesia–France Deals: President Prabowo’s Paris visit delivered four commercial pacts worth US$3.5 billion, alongside a new France-Indonesia High-Level Business Council to push investment and trade in energy, defense, and downstream sectors. Tourism Investment Beyond Bali: Indonesia renewed efforts to spread tourism investment across the archipelago, with Bali still dominating arrivals and the government pushing special destinations to reduce regional imbalance. Palm Oil Downstreaming: The government doubled down on palm oil value-add, urging tech-and-research driven downstream products and coordinating institutions to make the policy deliver wider public benefits. Fuel Subsidy Shield: Indonesia will keep subsidized fuel prices unchanged through year-end despite rupiah pressure, citing secure stockpiles. Rupiah, Inflation, and Vigilance: Finance officials warned consumption may face headwinds and urged vigilance as external shocks filter into domestic conditions. Data Center Power Alarm: A Sumatra blackout is raising alarms for Indonesia’s data center push, with investors demanding clearer recovery plans and grid reliability. ASEAN Security Corridors: ASEAN defense ministers at Shangri-La stressed UNCLOS transit passage and the need to keep trade routes open through key straits. Rice Export to Malaysia: Bulog says rice exports will be priced above Indonesia’s domestic cap to protect farmers and state revenue. Palm Oil Export Probe: Wilmar says it received no official notice as Indonesia investigates suspected export under-invoicing.

Renewables in Batam: Indonesia inaugurated key facilities for its first wind-to-electricity conversion project, supporting the Tennet 2GW HVDC plan and targeting thousands of local jobs during construction. Defense & industry: PT PAL began preproduction for the Scorpene Evolved submarine program with Naval Group, while the TNI said it will only support police in Jakarta’s anti-street-robbery push. Energy & infrastructure: Indonesia also prepares 24,000 hectares in Java for a 100 GW solar project, as electricity demand rises. Trade & diplomacy: Indonesia and Tajikistan signed steps to deepen cooperation, including a bilateral consultation committee and a roadmap across economy, trade, education, downstreaming and digital transformation. Regional integration: EAEU leaders in Astana pushed digitisation and AI to boost intra-bloc trade, with turnover projected to top $100B this year. Public order & society: Police dismantled an online gambling operation in Batam with about Rp 10 billion monthly turnover. Religious freedom concerns: A church service in Yogyakarta was disrupted by an extremist-linked mob, reigniting debate over interfaith tolerance. Business & finance: JBIC and Hyakujushi Bank financed an Indonesian auto-parts equipment expansion, while Indonesia’s palm oil export policy was clarified as not generating profits for the managing entity.

Lusi Mud Volcano Anniversary: East Java residents marked the 20th anniversary of the 2006 Lusi mud volcano eruption in Porong, Sidoarjo, praying at the mud lake as the disaster displaced tens of thousands and killed at least 14 people, with experts pointing to gas drilling as the likely trigger. Health & Aging: Indonesia’s Health Ministry said life expectancy is 74.15 years, but Health-Adjusted Life Expectancy is only about 60.7, with mobility limits affecting 64.6% of older adults in 2025 screenings. Digital ID for SIMs: The Communications Ministry will make facial-biometric SIM registration mandatory nationwide starting July 1, after trials with Telkomsel, Indosat and XL showed reliable results. Inflation Watch: A Reuters poll expects May inflation to rise to 2.97%, near the upper end of Bank Indonesia’s target range, as fuel, airfares and cooking oil costs stay pressured. Palm Oil Prices: The government met palm oil farmers to address falling fresh fruit bunch prices tied to plans to route exports through a state agency, urging local monitoring and compliance on FFB pricing. Climate & Heat Poverty: A new study warns nearly 600 million people face “systemic cooling poverty,” with heat risk driven by more than just climate or income—especially weak infrastructure and health access. AI Research Links: UI and South Korea’s Kyungpook National University agreed to push AI and multidisciplinary research, including an “AI plus X” program spanning engineering, health, industry and agriculture. Wind Power in Batam: Indonesia inaugurated key facilities in Batam for its first wind-to-electrical conversion project, supporting the Tennet 2GW HVDC effort.

Indonesia–France Ties: President Prabowo welcomed the France-Indonesia High-Level Business Council in Paris, aiming to deepen investment and cooperation across defense, clean energy, education and research. Middle East Diplomacy: Prabowo and Macron also backed a two-state solution, saying peace requires justice for Palestinians and stability for global energy. Mining Controversy: Indonesia’s environment ministry issued a fresh approval for a disputed zinc-lead mine in North Sumatra after a Supreme Court setback, but critics say the risk plan is essentially unchanged. Digital Economy & Water: Indonesia warned that AI infrastructure, data centres and device mineral extraction could strain water resources as demand for digital services surges. Finance & Markets: Indonesia’s OJK shut down 951 lenders and warned of digital fraud, while BI moves to tighten foreign-currency purchases to protect the rupiah. Trade & Sovereignty Debate: A new Indonesia–US Reciprocal Trade (ART) agreement is sparking debate over whether it strengthens partnership or shifts sovereignty toward U.S. priorities. Tourism Boost: South Korea will allow Indonesian tour groups visa-free for up to 15 days, starting Thursday, with roster screening to prevent abuse.

Indonesia-France Diplomacy: President Prabowo begins a state visit to France to deepen ties and push cooperation in defense, renewable energy, critical minerals, and education, with talks aimed at upgrading relations to a Comprehensive Strategic Partnership. Education Equity: Indonesia’s education ministry launches school renovations in Southwest Papua, targeting 39 schools with Rp20.1bn to improve facilities and expand learning access through distance and community-based models. Digital Economy & Water: Indonesia warns that AI infrastructure, data centers, and digital industries are driving soaring water demand, calling for stronger UN focus on future water crises. Trade & Industry Protection: Indonesia tightens import controls via stricter licensing, brand-new requirements, and more digital monitoring through the Single Submission system to shield domestic industries. Fertility Care: Indonesia stresses humane advanced fertility services to support its fertility rate, citing rising IVF demand and the need for integrated, accessible care. Energy Finance: IEEFA says restructuring PLN’s transmission business financing could lower financing costs by separating transmission risk from PLN’s higher-risk activities. Regional Security Watch: IISS highlights how chokepoints like Hormuz and Malacca shape Asia-Pacific security debates amid Iran-linked tensions and strategic competition.

Indonesia–Global Diplomacy: Indonesia pushes UN reform amid rising global tensions, while China and Indonesia agree to intensify high-level exchanges and deepen multilateral collaboration. Trade & Finance: Indonesia expands creative economy infrastructure, and the country’s rupiah weakness keeps business and education plans under strain; meanwhile, Indonesia probes major palm oil producers over alleged export under-invoicing and tightens FX rules to curb rupiah speculation. Energy & Commodities: Indonesia’s Scorpène submarine program advances to pre-production, and Sumatra’s grid upgrade is flagged as key to power resilience; separate coverage also highlights how the Iran war and Hormuz risks are reshaping global oil prices and costs. Digital Policy & Governance: Indonesia targets algorithm dominance in AI development and pushes public protection in AI, as global regulators warn AI pricing tools can trigger antitrust liability. Regional Security & Shipping: Singapore and China reiterate commitment to keep the Strait of Malacca open, with Hormuz closure fears still echoing across Asia. Sports (Indonesia-linked): HS Prannoy stuns Indonesia’s Jonatan Christie at the Singapore Open, while Indonesia’s Eid al-Adha livestock surplus is reported by the ministry.

Palm Oil Crackdown: Indonesia has launched a sweeping probe into major palm oil exporters, alleging under-invoicing and transfer pricing that could cut reported values by about half, with Wilmar and Musim Mas named and AI being used to flag more suspects. Flood Response: Central Java’s Pati district is still reeling after days of heavy rain, with eight villages submerged and residents reporting worsening conditions, including skin irritation for children. Trade Diplomacy: Russia has ratified an Indonesia–EAEU free trade deal, aiming to expand access for roughly 90% of commodities. Tourism Boost: Korea will allow Indonesian tour groups of three-plus to enter visa-free for up to 15 days starting Thursday, with roster checks to prevent abuse. Markets & Energy: The Iran war is keeping oil and currencies jittery, while Indonesia’s finance minister says the state budget doesn’t need recalculation despite rupiah weakness. Sports: PV Sindhu and Satwik-Chirag advanced at the Singapore Open, setting up more matches next.

Polymarket Crackdown: Indonesia has blocked prediction market Polymarket, calling it online gambling after bets tied to Prabowo Subianto’s exit sparked scrutiny—joining a widening global clampdown that already hit Spain and India. Eid al-Adha Rush: Eid al-Adha begins across the Islamic world, with Gaza casting a shadow and governments juggling security and heat as pilgrimage crowds move. Coral Damage Study: A new dive study says “good intentions” still harm reefs—researchers tracked thousands of coral contacts in Indonesia and the Philippines, with about 41% causing visible damage. Climate Warning: A new report warns lethal humidity could make Indonesia the region’s most at-risk country, as heat overwhelms the body’s cooling systems. Indonesia Trade Enforcement: Authorities seized mercury hidden in carpets bound for the Philippines, underscoring how illegal mining and gold prices keep fueling toxic smuggling. Sports & Culture: India’s Unity Cup return to England after 24 years sets up a Jamaica semi-final, while Singapore Open badminton starts with PV Sindhu and Satwik-Chirag advancing.

Indonesia Energy & Work Policy: Indonesia says its one-day-a-week WFH trial cut subsidized Pertalite fuel use by about 9%, and the government will extend the policy for two more months while private firms get guidance via a new circular. Food Security Push: Ahead of Eid al-Adha, officials are running “cheap market” operations in East Java, selling 5kg rice packs for Rp50,000 to blunt holiday price spikes. Digital Trade Boost: Bank Indonesia says QRIS is being linked with Japan’s JPQR, aiming to make Indonesia–Japan merchant payments easier from Aug. 17, 2025. Global Shock to Energy Markets: Asian stocks wobbled as fresh US strikes on Iran dented hopes for reopening the Strait of Hormuz, keeping oil volatility in focus. Regulation Watch: Spain has temporarily blocked Polymarket and Kalshi over missing gambling licences, adding to a growing crackdown on prediction-market betting. Health Alert: Indonesia’s health policy group urges stronger Ebola preparedness after WHO flagged the outbreak as a global emergency.