AGP Executive Report

Cuba Exit: Indonesian hotel operator Archipelago International confirmed it is ending its Aston-brand management arrangement for six hotels in Cuba, citing US sanctions and saying it could return if conditions improve. Public Opinion: A Pew Research Center survey across 36 countries found negative views of Israel and PM Benjamin Netanyahu have surged, with Indonesia among the highest at 86% unfavorable. Waste & Air Quality: A new study links China’s 2018 plastic waste import ban to a shift of waste to Indonesia, where researchers found higher fine-particle pollution near open dump sites. Nickel Market: Analysis says Indonesia is moving toward “value over volume,” using quotas and tighter smelter rules to support prices and a possible “green premium” for low-carbon nickel. Port Congestion: Finance Minister Purbaya Yudhi Sadewa wants tighter rules on how long cargo can sit at Tanjung Priok, after reports of thousands of documents and containers awaiting processing. Jakarta Global City: Jakarta’s planning office says human resources and knowledge management are central to the capital’s push to become a global city. Local Infrastructure: Papua’s Jayapura–Wamena road construction is still ongoing, with about 50 km being developed under a long-running PPP-funded plan. Sports: Gilas Pilipinas girls beat Indonesia 88-62 to sweep SEABA qualifiers for the FIBA U18 Women’s Asia Cup.

Rupiah & Markets: Indonesia’s finance minister Purbaya Yudhi Sadewa pushed back on fears of a 1997-98-style crisis, saying the fiscal and economy are solid while the rupiah slide is driven by negative sentiment; Central Bank Coordination: Bank Indonesia and the Finance Ministry agreed to boost the attractiveness of yields on Indonesian assets and keep liquidity in money and banking markets to pull portfolio inflows and stabilize the currency; KPK Anti-Graft: The Corruption Eradication Commission launched a probe into alleged bribery tied to banking notification services at BRI and Telkom, with possible state losses reported near Rp2 trillion; Tourism Growth: The Tourism Ministry said foreign arrivals rose to 1.25 million in April and 4.68 million in the first four months, supporting a positive trajectory; Waste & Climate Action: Government accelerated waste-to-energy projects in priority areas and launched the ASRI Movement for climate justice, alongside calls for “ecological repentance” and household waste separation; Energy & Industry: Indonesia also expects customs and excise revenue to keep recovering, reaching Rp123.8 trillion by end-May.

Forced-Labor Tariffs: The US has proposed new duties on goods from 60 countries, including Cambodia and several ASEAN states, after a USTR probe found many exporters fail to effectively ban forced-labor imports. Indonesia Wheat Push: USW signed a deal with Indonesia’s flour millers (APTINDO) to lift purchases of US milling wheat through 2030, aiming to expand market access via technical and trade programs. Rupiah & Cabinet Rumors: Finance Minister Purbaya Yudhi Sadewa dismissed resignation rumors, saying fiscal policy will stay on course as investors watch budget updates. Market Jitters: Wall Street slid sharply Friday as tech and semiconductor stocks tumbled amid rate worries. Palm Oil Export Overhaul: Palm futures fell as traders reacted to Indonesia’s centralised export control rules for strategic commodities, with the transition starting June 1. Health Policy: Indonesia is drafting plain packaging rules for cigarettes and e-cigarettes to curb youth smoking, with graphic warnings retained. Sports & Tourism: Indonesia Open badminton set up semis for Sze Fei-Nur Izzuddin; Bali will host the 2026 Asian Open Water Swimming Championship. Energy Deal: Empyrean shares jumped after a binding rig contract was secured for the Mako gas field development.

Rupiah Under Pressure: Indonesia’s rupiah slid past the key 18,000 per US dollar mark as surging energy costs hit sentiment, while lawmakers approved a bill expanding Bank Indonesia’s mandate toward economic growth—raising fresh independence concerns. Central Bank Overhaul: Bank Indonesia says it will issue technical rules to reflect the wider growth-focused mandate after parliament passed the sweeping financial system law. Export “One-Door” Policy: Indonesia reaffirmed business certainty under its one-door export policy for strategic commodities, saying signed contracts stay valid if they meet reporting rules and avoid under-invoicing. Nickel Policy Shock: Chinese investors behind Indonesia’s nickel boom are scouting longer-term alternatives in Africa as policy pressure and centralised export plans reshape the investment model. Digital Infrastructure Funding: Singapore-headquartered DayOne Data Centers secured a final US$4.5b Series C, with Indonesia’s sovereign wealth fund among new investors, to expand capacity in Indonesia and the region. AI Retail Push: JumpStart raised Series C funding to scale AI-powered vending machines across Indonesia, targeting wider partnerships and new product formats. Climate Warning: NASA flagged a broad Pacific warm-water swell as a sign a Super El Niño may be imminent, with potential knock-on effects for regional rainfall and heat. Forced-Labour Tariffs: The US proposed up to 12.5% tariffs on imports from 60 countries over forced-labour claims, with trading partners pushing back.

Digital Security Push: Indonesia’s OJK urged banks to harden digital transaction security as cybercrime and AI-enabled fraud rise, citing a surge in digital payments and high-risk malware incidents. Biometrics for SIMs: From July 1, Indonesia will require face biometrics for new mobile number registrations, with data encrypted and stored only with Dukcapil. Market Pressure: The rupiah slid to record lows near Rp18,000 per US dollar, prompting firms to cut costs and freeze hiring while BI ramps up market intervention. Free Meals Under Scrutiny: Indonesia’s free meal programme faces graft fallout, with arrests and leadership changes raising questions about continuity and governance. Energy & ESG: Malaysia’s TNB highlighted how ESG reporting and digitalised ESG indicators helped secure an MSCI “AA” upgrade, reflecting the region’s push for cleaner, more accountable energy transitions. Indonesia Open Sports: Malaysia’s Soon Huat-Shevon and Pearly-Thinaah advanced in Jakarta, setting up quarter-final matchups.

Rupiah Shock: Indonesia’s rupiah slid to a historic low, breaking the IDR18,000 per US dollar level as foreign investors sold off stocks and bonds, while lawmakers passed a bill expanding Bank Indonesia’s mandate and oversight—raising fresh independence concerns. Central Bank Overhaul: The new regulation broadens BI’s role to include economic growth and lets parliament evaluate BI, with spillover attention on other financial watchdogs like OJK and LPS. Strategic Minerals Push: Parliament approved giving OJK authority to regulate and supervise Indonesia’s strategic minerals and commodities exchange, aiming to boost strategic industries and state revenues. LNG Supply Update: BP told lawmakers it expects Tangguh LNG domestic deliveries to rise to 89 cargoes in 2026, as Indonesia manages tighter LNG availability. Food Risks From El Niño: Hot, dry weather is disrupting crop planting across Asia, with an expected severe El Niño threatening food supplies—hitting places including Indonesia’s palm oil areas. OJK vs. Markets: Finance Minister Purbaya said there will be no IHSG intervention despite a sharp selloff, pointing to fundamentals like inflation staying near target. Tourism Policy: A DPR lawmaker urged tourism development to become a cross-sector national program, not just a Ministry of Tourism job. Research Integrity: BRIN chief Arif Satria warned AI must not be used to fabricate research, calling for stronger safeguards. Plasma Downstreaming: Health Minister Budi Gunadi Sadikin backed partnerships to commercialize Indonesia’s first plasma fractionation factory to strengthen health resilience.

Forced-Labor Tariff Shock: The U.S. proposed Section 301 tariffs of 10% to 12.5% on imports from 60 economies, including Indonesia, after finding failures to curb forced-labor-linked goods—sparking pushback from trading partners and adding uncertainty for supply chains ahead of a July 7 comment hearing. Rupiah Watch: Indonesia’s rupiah slid to about Rp17,966 per US dollar as Finance Minister Purbaya said market rumors drove the move, while stressing Bank Indonesia remains the exchange-rate authority. Human Rights in Focus: 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. El Niño Ahead: The WMO says there’s an 80% chance El Niño will form between June and August, raising risks of drought, heavy rain, and heatwaves. Indonesia-Africa Links: Foreign Minister Sugiono pitched Madagascar as a strategic gateway to Africa’s minerals and agreed visa-exemption steps to boost business ties. BRICS Disaster Resilience: BRICS DRR talks began in Puri, Odisha, with sessions on early warning systems and climate-smart infrastructure.

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.