AGP Executive Report

US Sanctions Hit Cuba Tourism: Indonesian hotel operator Archipelago International confirmed it is exiting Cuba, citing US sanctions and a Trump deadline tied to GAESA, following similar pullouts by other chains. Public Opinion on Israel: A Pew Research Center survey across 36 countries found negative views of Israel and Netanyahu have surged, with Indonesia among the highest anti-Israel sentiment levels. Nickel Market Policy Shift: Analysis says Indonesia is moving toward “value over volume,” using quotas and smelter rules to act more like an OPEC-style manager as a “green premium” reshapes demand. Digital Media Links: A new open-source review claims technical overlap between Viory and Ruptly via shared Yandex infrastructure and related traffic patterns. Indonesia Governance & Services: Jakarta pushes HR development for its “global city” bid; Papua’s Jayapura–Wamena road work continues; the Hajj ministry tracks returning pilgrims and reiterates flight-document rules. Trade Logistics: Finance Minister Purbaya Yudhi Sadewa urged tighter port storage rules at Tanjung Priok to cut congestion and dwelling time.

Rupiah Rescue Talks: Bank Indonesia and the Finance Ministry agreed to boost the attractiveness of Indonesian asset yields to pull back portfolio inflows after a sharp market selloff and the rupiah hitting record lows. Anti-Graft Push: KPK opened a graft probe into alleged bribery tied to BRI-Telkom banking notification services, with suspected state losses reported at nearly Rp2 trillion. Fiscal-Monetary Coordination: BI and the Finance Ministry said they will keep tightening coordination to stabilize the rupiah and support growth, including steps to manage liquidity and returns for foreign investors. Climate Justice Drive: The Environment Ministry launched the ASRI Movement and a “national ecological repentance” push to cut waste, as Indonesia’s waste crisis and landfill overload remain central policy targets. Waste-to-Energy Acceleration: Indonesia is speeding up waste-to-energy (PSEL) projects, with three sites set for groundbreaking soon and more in partner selection, targeting operations in 2028. Trade Pressure Watch: Indonesia expects its final US tariff rate under the Section 301 forced-labor probe to reach about 18% after talks and the US legal process. Digital Finance Security: OJK urged banks and fintechs to harden transaction security as AI-enabled fraud and ransomware threats rise. Defense Diplomacy: Japan and Indonesia agreed to start working-level talks on exporting Asagiri-class destroyers, including training, maintenance, and operational aspects.

Indonesia–China Policy: A senior DPR lawmaker said Indonesia remains committed to the one-China principle, pointing to a 2024 joint statement tied to President Prabowo’s China visit. US Trade Pressure: The US proposed forced-labor-related duties covering 60 countries, with Cambodia and several ASEAN states named, raising pressure on regional supply chains. Immigration & Corruption: Indonesia has ended fast-track processing for foreign limited and permanent stay permits, after reforms aimed at stopping extortion-style “special payments.” Finance Minister Rumors: Finance Minister Purbaya Yudhi Sadewa dismissed resignation rumors, stressing fiscal continuity and presenting budget figures to reassure markets. Human Rights Case: An acid-attack trial involving military-linked suspects continues, with lawyers describing the process as a “sham.” Public Health Regulation: Indonesia is drafting standardized, plain packaging rules for cigarettes and e-cigarettes to curb youth smoking, with a transition period for industry. Trade & Markets: Indonesia’s illegal fishing crackdown since 2021 is said to have prevented Rp16.6 trillion in losses, while palm oil prices react to Indonesia’s new centralized export control system. Defense Diplomacy: Japan and Indonesia are set to begin talks on exporting Japan’s Asagiri-class destroyer to Indonesia.

Rupiah Shock & Central Bank Overhaul: Indonesia’s rupiah broke past Rp18,000 per US$ for the first time as markets reacted to surging energy costs and investor worries after parliament passed a sweeping bill expanding Bank Indonesia’s mandate to include “real sector growth” and job creation, with lawmakers also gaining evaluation powers. Free Meals Under Pressure: The Free Nutritious Meals (MBG) program is being pushed toward “efficiency” and tighter governance after corruption probes and the sacking of the program’s former head; BGN says new kitchen construction is paused while standards and targeting are tightened, with a renewed focus on pregnant women, breastfeeding mothers, and children under five. Volcano Disruptions: Mount Lewotobi Laki-Laki erupted in Flores, sending ash high into the sky and forcing the closure of the nearby Maumere airport, disrupting several domestic flights. Nickel Policy Ripples: Chinese firms behind Indonesia’s nickel boom are scouting longer-term alternatives abroad as policy pressure and export-centralization plans reshape the investment model. Trade & Digital Rules: Indonesia finalized new e-commerce/PMSE rules to strengthen SMEs and consumer protection, including bringing ride-hailing and online travel agents under the framework. OECD Push: Switzerland pledged €3 million to support Indonesia’s OECD accession, while Indonesia aims to finish the technical review phase by 2030. Regional Tech Cooperation: Indonesia is set to contribute to ASEAN industrial AI application demands, including power dispatch and energy management priorities. Business & Tech Funding: JumpStart secured Series C funding to expand AI-powered, cashless smart vending machines across Indonesia.

Digital Identity & Fraud Prevention: Indonesia will require face biometrics for new mobile number registrations starting July 1, with data encrypted and stored only by Dukcapil, as the government expands SIM-related anti-fraud controls. Financial Oversight & Cybersecurity: OJK urged banks and fintechs to harden digital transaction security amid rising ransomware and AI-enabled fraud, citing a surge in risky cyber incidents and rapid growth in digital payments. Anti-Corruption & Social Assistance: Indonesia’s free meals program remains in the spotlight after leadership shake-ups and graft probes, with officials pushing for tighter governance and a refocus toward more remote areas. Regional Diplomacy: Indonesia’s MoFA held preparatory talks with Qatar ahead of the Qatar-Indonesia Strategic Dialogue, aiming to deepen cooperation across regional and international issues. Cross-Border Security Context: A Pew survey found unfavorable views of Israel and low confidence in Netanyahu across multiple countries including Indonesia, adding to the political backdrop for regional public opinion. Trade & Exchange-Rate Workarounds: Indonesia’s Trade Ministry discussed a barter scheme with the Philippines to ease currency pressure, with contract talks set for June 12.

Free Meals Crackdown: Indonesia’s anti-graft drive escalated as KPK detained Deputy Immigration Minister Silmy Karim over alleged extortion in immigration document processing, hours after the AGO arrested Dadan Hindayana, the former head of Prabowo’s free-meals programme, alongside two former deputies tied to corruption and food-poisoning fallout. Currency Shock: The rupiah slid to a record low near IDR18,000 per US dollar as foreign investors sold Indonesian bonds and shares, prompting renewed talk of market intervention. BRIN on AI Integrity: BRIN chief Arif Satria warned that AI must not be used to fabricate research, calling for tighter safeguards for scientific integrity. Tourism Push: DPR lawmakers urged tourism development to become a cross-sector national programme, not just a Ministry of Tourism task, as Indonesia seeks stronger visitor growth. Food Security Threat: UN and regional reporting point to El Niño returning, with hotter, drier conditions already disrupting crop planting across Asia, raising pressure on food supplies and prices. Regional Cooperation: Indonesia and Malaysia reaffirmed JCBC plans to deepen economic resilience and citizen-protection cooperation.

Military Justice Under Fire: UN experts condemned Indonesia’s use of military court proceedings in the acid attack case against human rights defender Andrie Yunus, urging a public civilian trial and warning of impunity risks in the “dual justice” system. US Tariff Pressure on Forced-Labor Goods: The Trump administration proposed Section 301 tariffs of 10–12.5% on imports from 60 economies, including Indonesia, after USTR said they failed to enforce bans on forced-labor-linked products—sparking pushback from trading partners and adding uncertainty for exporters. Rupiah Watch: Indonesia’s finance minister said the government will coordinate with the financial stability committee to support rupiah stability, while stressing Bank Indonesia remains the exchange-rate authority as the currency slid to around Rp17,966 per US dollar. Free Meals Program Crackdown: Indonesia’s nutrition agency leadership was shaken by raids and sacking tied to corruption allegations, with officials arrested over procurement and program-linked issues. Climate Risk Alert: The World Meteorological Organization warned of an 80% chance El Niño conditions between June–August, raising odds of drought, heavy rain, and heatwaves. Indonesia–Madagascar Ties: Foreign ministers agreed visa exemptions for diplomatic/official passport holders and discussed deeper cooperation on minerals, energy, finance, and creative industries. BRICS Disaster Resilience: BRICS DRR working group meetings in Puri focused on early warning systems and climate-smart infrastructure, with Indonesia among participants.

US Trade Pressure: The Trump administration proposed new Section 301 tariffs on 60 economies over alleged failures to curb imports made with forced labour, with Indonesia named among those facing a 10% duty—raising new uncertainty for trade talks and regional exporters. Domestic Legal Sovereignty: Indonesia’s DPR is pushing a Private International Law Bill to strengthen jurisdiction and choice-of-law rules, aiming to prevent foreign firms from locking Indonesian deals into home-country law. Free Meals Under Scrutiny: Investigators searched the National Nutrition Agency after President Prabowo sacked the head of the troubled free meals program, as officials cite governance and food-quality discipline issues. Military-Justice Clash: Prosecutors sought prison terms for soldiers over an acid attack on an activist critical of the military’s expanding role in government, spotlighting tensions between security institutions and civil society. Digital Governance: Indonesia’s under-16 social media ban is forcing rapid platform compliance, including account deactivations and child-tier app redesigns. Regional Diplomacy & Defence: Prabowo met Turkey’s FM Hakan Fidan on Middle East stability and cooperation, while Indonesia and Qatar advanced defence industry ties through new agreements. BRICS DRR in Puri: A BRICS Disaster Risk Reduction working group meeting in Odisha, with Indonesia participating, focuses on resilient infrastructure, early warning, and disaster financing.

Pancasila Economy Push: President Prabowo framed his agenda for “economic transformation” around Pancasila at the Pancasila Day ceremony, tying welfare and justice to flagship programs like free nutritious school meals—while the policy still faces scrutiny over costs and execution. Free Meals Overseas: Indonesia’s National Nutrition Agency is weighing a pilot expansion of the free-meals program to Saudi Arabia (Jeddah), even as critics question food safety and procurement practices at home. Al-Aqsa Diplomacy: Foreign ministers from Indonesia and seven other Muslim-majority countries issued a joint condemnation of Israeli settler incursions into Al-Aqsa Mosque, calling them violations of international law and urging an immediate halt. Defense Cooperation: Qatar’s deputy PM and defence minister met Indonesia’s defence chief in Jakarta, with both sides discussing security coordination and signing defence-related agreements. Papua WWII Bomb Fallout: A WWII-era explosive ordnance blast in Papua’s Biak area killed five and left three missing, with authorities pausing rescue until bomb disposal clears the site. Gojek Graft Case: Ex-education minister Nadiem Makarim said prosecutors’ 27-year prison demand stems from a “blunder” and a forced link between Chromebook procurement and Google investment in Gojek. El Niño Warning: The WMO says El Niño is developing with high odds for June–August and beyond, raising the stakes for Indonesia’s disaster and climate preparedness. Online Age Limits: Indonesia’s new social media age restrictions are driving platforms to purge accounts and roll out youth-focused versions, intensifying the debate over enforceability and child protection.

Corruption Trial Watch: Indonesia’s former education minister and Gojek founder Nadiem Makarim pleaded not guilty in a corruption case over alleged Chromebook procurement losses, arguing the state suffered no losses and that the case is an “investigative mistake,” as prosecutors seek an 18-year sentence and huge restitution. Defence Diplomacy: Indonesia and Qatar moved to deepen defence cooperation, signing an MoU and discussing joint training, education, and defence-industry collaboration amid wider regional tensions. Online Child Safety: Malaysia began enforcing a ban on social media accounts for children under 16, requiring age verification and threatening platform fines—while Indonesia is also tightening rules on children’s exposure to harmful content online. Public Health Policy: Indonesia plans earlier liver-disease detection at puskesmas by training general practitioners, alongside hepatitis prevention and screening measures. Economy & Markets: Inflation in Indonesia quickened to 3.08% in May, with Bank Indonesia raising rates to keep prices within target as the rupiah weakens. Energy & Climate Risk: Scientists warn a “Super El Niño” is likely this summer, raising the odds of extreme heat and heavier climate swings—while Indonesia also pushes climate and food resilience planning. Maritime Readiness: The Indonesian navy conducted an amphibious landing drill in Palu to strengthen readiness and uphold maritime security in strategic corridors. Agriculture Politics: Oil palm farmers face renewed pressure after export-rule changes, while officials signal prices may stabilize as regulations settle.

Malaysia Under-16 Social Media Crackdown: Malaysia has started enforcing its nationwide ban on social media accounts for children under 16, requiring platforms with at least 8 million users to use government ID-based age verification; existing underage users get a one-month grace period to back up data, while non-compliance can bring fines up to 10 million ringgit (about $2.5 million). Indonesia Free Meals Oversight: Indonesia’s National Nutrition Agency (BGN) reminded Free Nutritious Meals (MBG) kitchen operators (SPPGs) that they must meet hygiene, wastewater, supplier, and workflow standards or face suspension—aimed at keeping the program running and protecting beneficiaries. Digital Public Infrastructure Push: Indonesia and Papua New Guinea have joined the 50-in-5 campaign to expand digital public infrastructure, linking digital identity, payments, and data exchange to improve government services. Riau Fire Preparedness: Riau Province declared forest-and-land-fire emergency alerts across 11 regions ahead of the dry season to tighten coordination and speed response. Papua WWII Bomb Fallout: A suspected WWII-era bomb exploded in Papua, killing five and injuring at least 20, prompting renewed security and disaster response attention.

Pancasila Economy Push: President Prabowo used Pancasila Day to argue Indonesia’s economic transformation must be rooted in Pancasila values—religiosity, humanity, unity, people-centered growth, and social justice—while warning he’ll face resistance from groups benefiting from corruption, smuggling, and illegal practices. Export Data Crackdown: Finance Minister Purbaya said the planned Danantara state export firm (DSI) will centralize export reporting via CEISA 4.0 to curb under-invoicing and keep export proceeds from leaking abroad, aiming to boost transparency and investor confidence. Social Media Age Rules (Malaysia): Malaysia began enforcing under-16 social media account bans with age verification for major platforms, citing child protection; Indonesia is referenced as already having similar rules. Food Security (El Niño): Indonesia is accelerating rice planting in Lamongan, East Java, expanding planted areas and ensuring irrigation, seeds, fertilizer, and machinery ahead of El Niño impacts. Security Incident (Papua): A suspected WWII shell exploded in Papua, killing five and injuring nearly 20, destroying homes and prompting an investigation. Regional Security Context: At Shangri-La Dialogue, Indo-Pacific defense leaders discussed faster rearmament and deeper partnerships amid uncertainty over US focus and China’s rising military power.

Indo-Pacific Security: Shangri-La Dialogue wrapped in Singapore with China repeatedly in the spotlight, as Chinese delegates faced pointed questions and US Defense Secretary Pete Hegseth’s remarks kept regional tensions front and center. Defense Cooperation: Indo-Pacific ministers and partners pushed for deeper defense ties amid rising China-linked security concerns, reinforcing the “hedge” trend across the region. Trade & Fisheries Rules: A WTO fisheries subsidies deal is moving forward, but the next phase (“Fish 2”) could stall if key countries—including Indonesia—don’t keep negotiations on track. Indonesia–China Market Access: Indonesia expanded fishery export access to China, with more processing units approved and exports to China topping $1B in 2025. Hajj Planning: Indonesia began designing 2027 Hajj plans, citing aviation fuel (avtur) cost risk and currency swings as major cost drivers. Environment & Conservation: A decade-long study highlights Indonesia as a whale shark stronghold, supporting plans for a whale-shark-focused marine protected area in Saleh Bay. Public Life & Unity: Vesak Day messages from Indonesia’s leaders emphasized tolerance, dialogue, and national unity. Disaster Response: In Laos, heavy rain threatens cave rescue operations as teams race to find two remaining miners.

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 front and center. BrahMos Missile Track: At the Shangri-La Dialogue, India’s Defence Secretary Rajesh Kumar Singh confirmed Vietnam’s BrahMos deal is already signed (not yet publicly announced) and said Indonesia’s pact is in the final stages, underscoring India’s growing defense-export push in Southeast Asia. ASEAN Defence Cooperation: ASEAN defence ministers reaffirmed ASEAN centrality and deeper defense coordination, including training and information-sharing, with Indonesia set to host Exercise Trident Resolve in September 2026. Public Health Policy: Indonesia expanded its free health checks to include colorectal cancer screening for high-risk people aged 45+, using a questionnaire plus digital rectal exam and fecal occult blood testing. Digital/Market Governance: Polymarket is stepping up anti-VPN controls and identity checks amid bans and legal pressure, while the U.S. tariff-refund process faces an appeal that could slow payouts. Regional Security Drills: Multinational counter-terrorism exercise PRAGATI 2026 wrapped up in Meghalaya with 13 nations and 400+ personnel, including Indonesia.

Indonesia–France Deal Push: President Prabowo returned to Jakarta after a Paris visit that produced four commercial agreements worth US$3.5bn, alongside a new France-Indonesia High-Level Business Council aimed at boosting investment and trade. Defense Diplomacy: At Singapore’s Shangri-La Dialogue, US Defense Secretary Pete Hegseth urged allies to raise defense spending to 3.5% of GDP and warned China against hegemony, while ASEAN defense ministers reaffirmed UNCLOS transit passage and the free flow of trade through key corridors. Maritime Security: Indonesia’s earlier idea of a levy on ships through the Malacca/Singapore straits is back in focus as Indonesia and Malaysia stress no single country can unilaterally control access. Palm Oil Downstreaming: Indonesia is doubling down on palm oil downstreaming with tech and research, even as authorities probe alleged under-invoicing/transfer pricing involving major firms like Wilmar. Fuel Subsidy Stability: Indonesia will keep subsidized fuel prices unchanged through year-end despite rupiah weakness and fiscal pressure. Resource Nationalism Meets Pushback: New export controls and state-linked marketing rules are moving ahead, but talk of exemptions is already stirring uncertainty for exporters. Disaster Response: In Laos, rescuers freed four more men from a flooded cave as the search continues for two missing; in Aceh, uncleared Sumatra flood debris sparked a wildfire threatening survivor areas. Tourism Beyond Bali: Indonesia renewed efforts to attract investment to tourism destinations outside Bali, aiming to spread growth beyond the usual hotspots.

Indonesia-France Diplomacy: President Prabowo met Emmanuel Macron at the Élysée Palace, with defense cooperation and the long-stalled EU-Indonesia trade deal (IEU-CEPA) on the agenda. Defense & Industry: PT PAL began preproduction for the Scorpène Evolved submarine project with Naval Group, while Indonesia also inaugurated key Batam facilities for its first wind-to-electricity conversion push. Public Order & Rights: The TNI said it will only support police in Jakarta’s anti-street-robbery efforts, after criticism over military involvement in civilian law enforcement. Religious Freedom Under Pressure: A Muslim mob in Yogyakarta stopped a church service, raising renewed concerns about interfaith tolerance and local permission rules. Digital Governance & Crime: Police raided a Batam online gambling center with Rp 10 billion monthly turnover, and Indonesia also moved to block Polymarket amid a wider prediction-market crackdown. Housing for Low-Income Families: Indonesia expanded self-help housing assistance in Sulawesi, targeting nearly 9,000 homes. Regional Economic Links: Indonesia and Tajikistan agreed on a cooperation roadmap covering trade, education, downstream industries and digital transformation. Energy & Commodities Policy: The government clarified that PT Danantara Sumberdaya Indonesia won’t profit from the CPO export management system, as a transition toward centralized oversight begins.