AGP Executive Report

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.

Haze Emergency: Indonesia deployed 2.4 tonnes of dry ice over South Sumatra in a bid to clear smoke, but officials say more research is needed to confirm it worked. The regional weather centre has issued its highest haze alert as fires disrupt daily life across Southeast Asia. Bali Fuel: Long queues have prompted temporary odd-even rules for subsidised fuel purchases, while Pertamina works to restore supplies. Market Shock: Indonesian shares plunged about 11% after MSCI warned it may downgrade the market, fuelling concern about investor confidence and potential capital outflows. Trade Push: Indonesia’s Kadin and Senegal’s business chamber signed a pact covering trade, investment, shipping and banking, as Jakarta seeks stronger links with West Africa. Food Supply: The government says eight staple commodities have reached self-sufficiency, while garlic, soybeans and beef remain targets. Whoosh: The Jakarta-Bandung high-speed railway has carried more than 18 million passenger trips in three years.

Market Shock: Jakarta stocks plunged 11%—their steepest one-day fall since 1998—after MSCI proposed downgrading Indonesia from emerging-market status, raising fears of capital outflows. Officials say market reforms are needed, while Danantara has pledged $5 billion to support domestic companies. Forest Fires: Wildfires have killed four people battling blazes as haze spreads across Southeast Asia. Singapore has issued notices to seven Indonesian firms over suspected fire links, adding diplomatic pressure on Jakarta. Bali Fuel: Pertamina is targeting 48 million liters of fuel at two terminals and has added tankers and round-the-clock stations. An odd-even plate rule and purchase limits are in place through Monday to ease shortages. Military Justice: The Constitutional Court ruled that soldiers accused of ordinary crimes must face civilian courts, prompting calls to revise the military tribunal law. Transport Links: Ferry operator ASDP and Malaysia’s Parameswara terminal will study the feasibility of a Dumai-Melaka route.

Market Shock: MSCI’s proposal to move Indonesia from emerging- to standalone-market status sent the Jakarta Composite Index down 11.57% on Friday, its steepest one-day fall since 1998. The rupiah weakened to around Rp18,070 per US dollar, while regulators announced sanctions over alleged share-trading violations and officials urged calm. Danantara says it plans to invest $5 billion in Indonesian businesses over the next six to nine months. Haze Crisis: Fires in Sumatra and Kalimantan are sending toxic smoke across the region. Singapore will warn seven Indonesian companies it links to fires and is weighing fines or charges; smoke has also been detected high above Jakarta. Indonesia is stepping up firefighting as neighboring countries call for stronger ASEAN cooperation. Trade and Local Business: Indonesia secured US$50 million in durian trade deals with China, while new Red and White Cooperative outlets in South Jakarta aim to give local MSMEs more space to sell their products.

Market Shock: Indonesian stocks plunged as much as 11% after MSCI proposed reclassifying the country as a standalone market, citing persistent concerns over shareholding transparency, suspected coordinated trading and weak enforcement. The consultation runs until April 2027; OJK says it respects the review and is weighing the feedback. Wildfire Haze: Fires are darkening skies across Southeast Asia and disrupting daily life, while Indonesia faces scrutiny over its response. The Forestry Ministry has restricted access to key forest and fire maps, drawing criticism from researchers and environmental groups who rely on the data to track fires and deforestation. Household Support: The government plans to use village cooperatives to distribute subsidised rice, fertilizer, LPG and aid, including rice assistance for 33.2 million households. Officials say beneficiary checks will be needed to ensure support reaches eligible families. Food and Trade: A newly appointed deputy agriculture minister wants universities’ research and technology applied to food self-sufficiency and agricultural processing. Separately, Indonesia is seeking to expand manufactured exports to India and attract investment in sectors including automotive, furniture and strategic minerals.

Haze Emergency: Indonesia says it will accept foreign firefighting help as forest fires intensify, with smoke darkening skies and disrupting schools across the region. Singapore is examining companies potentially responsible for fires, while Malaysian lawmakers are calling for a permanent ASEAN response team. Bali Fuel Crunch: Hundreds protested after a tanker delay triggered hours-long queues at petrol stations; officials say the shipment should cover the island’s needs for about a week. Trade and Jobs: Trade Expo Indonesia is targeting US$17.5 billion in deals, as the country seeks new export markets and a better-balanced trade relationship with Tanzania. Indonesia recorded a US$7.25 billion trade surplus in January-August, but faces a stark graduate jobs gap: 1.3 million university graduates were unemployed in May. Food Research: Jakarta welcomed China’s proposal for a joint rice research centre in South Papua, aimed at improving yields and supporting local economic development.

Wildfire Emergency: Indonesia has deployed nearly 17,000 people to fight fires in South Sumatra and Central Kalimantan, where hazardous haze and poor visibility are hampering aerial operations. Hotspots across priority provinces nearly doubled to 294; officials plan a dry-ice trial in Palembang and cloud-seeding flights from Banjarmasin. Bali Fuel Disruption: The province has ordered three days of work from home, Oct. 15–17, to ease fuel queues after bad weather and a delayed tanker disrupted deliveries. Disaster Oversight: The KPK has arrested five people, including the disaster agency chief’s brother, over suspected corruption in emergency procurement. Separately, police named nine individuals as corporate suspects in fire investigations. Energy Investment: Seadrill won a contract worth about $420 million to deploy a drillship for an unnamed Indonesian operator, with work expected to start in 2027.

Wildfire Haze: Indonesia says it aims to put out forest fires within a month, as Singapore considers possible legal action and residents in fire-hit West Kalimantan sue for clean air. Jakarta has ruled out declaring a national disaster for now. Investment & Budget: The government is courting private capital and touting fiscal discipline, including a pledge to keep the budget deficit below 3% of GDP. Its 2027 budget targets 6% growth; China has praised Indonesia’s investment climate after US$10.2 billion in industrial projects were inaugurated in Central Halmahera. Bali Fuel: Long queues followed delivery delays caused by bad weather and a tanker problem. Officials say supplies are being replenished and describe the disruption as a distribution issue, not a fuel shortage. Digital Trade: Bank Indonesia recorded 200 cross-border QRIS payments during the Mandalika MotoGP, while an Indonesian company has secured a US$15 million deal to help build a cassava-processing plant in Cameroon.

Forest Fires: Indonesia aims to extinguish fires within a month and is assessing foreign firefighting offers as haze spreads across the region. In West Kalimantan, residents have sued President Prabowo and 26 officials, alleging government failures violated their right to clean air; the fires have also affected hundreds of wild animals. Public Mood: A new SMRC survey found confidence that Indonesia is moving in the right direction has fallen to 47.7%, from 83% when Prabowo took office in 2024. Growth Target: Nobel laureate James Robinson says the government’s 8% annual growth goal is possible but unusually difficult, requiring strong institutions. Trade and Jobs: Indonesia is exploring Chinese partnerships to process mungbeans and seaweed locally; companies presented trade contracts worth about US$19.6 million, while investment and technology-transfer opportunities remain under discussion.

Wildfires and Haze: Smoke from fires has spread across much of Indonesia and into Malaysia, Singapore and Papua New Guinea. The government aims to put out the blazes within a month and plans to remove a rule allowing small-scale land clearing by fire. Komnas HAM is calling for public disclosure of investigations and enforcement against suspected offenders. Fiscal Policy: Indonesia says it will keep the budget deficit below 3% of GDP; the deficit stood at 1.24% at the end of September. Startups and Research: The government is targeting Rp1 trillion in startup funding this year, while BPOM has teamed up with 187 universities to build a domestic advanced-therapy medicine ecosystem. Disaster Readiness: Indonesia is testing mosque loudspeakers as earthquake-warning alarms, adding a new use for community infrastructure.

Wildfire Emergency: Indonesia has deployed 60,177 personnel to fight fires in six provinces, with Central Kalimantan and South Sumatra the main hotspots. Smoke has spread across the region, while fires threaten peatlands and wildlife habitat. ASEAN foreign ministers plan to discuss the cross-border haze next month. Tax and Business: New ecommerce and influencer taxes, alongside a planned sugary-drink levy, are part of the government’s push to raise revenue. Analysts say delayed refunds are disrupting companies’ cash flow. Banking: South Korea’s Shinhan Financial Group has created an Indonesian holding company, bringing its banking, financing and securities operations under one roof as foreign lenders expand amid industry consolidation.

Global Health: Indonesia has nominated Health Minister Budi Gunadi Sadikin to lead the WHO, saying his bid would advance a fairer global health system for developing nations. Wildfire Crisis: President Prabowo has made Tanjung Puting National Park a firefighting priority as blazes and haze hit Sumatra and Kalimantan. Fifty helicopters remain on standby, though smoke hampers flights, and the government plans to suspend or revoke more companies’ licences. Local Business: The government introduced four measures to widen MSME and cooperative access to energy-sector work, including mining permits and community oil wells. Investment: Indonesia and Egypt plan a joint investment fund and aim to lift bilateral trade to $5 billion by 2030. Separately, Pertamina and Medco are taking stakes in Eni-operated oil and gas assets off East Kalimantan. Jakarta: The city plans to launch TransJakarta boat services in June 2027, with its governor also proposing eventual air transport.

Indonesia–Egypt Ties: President Prabowo Subianto and Egyptian President Abdel Fattah al-Sisi agreed to expand economic, education, defence and maritime cooperation, with a goal of lifting bilateral trade to US$5 billion by 2030. Haze Response: Indonesia briefed Malaysia on efforts to tackle fires in Sumatra and Kalimantan as smoke worsens across the region. Digital Investment: Data-centre firms are urging clearer, coordinated approvals for environmental, building, water and energy permits, saying predictable rules are key to attracting investment. Cost of Living: Chicken prices rose 7.8% in the first nine months of 2026, outpacing workers’ wage growth of 4.9%.

Indonesia–Egypt Ties: President Prabowo and Egypt’s Abdel Fattah el-Sisi agreed to pursue a trade pact and joint investment fund, while expanding education, defence and maritime cooperation. They also condemned Israeli settlements and called for de-escalation in the Middle East. Forest Fires: Indonesia is testing a Brazilian fire-suppressant liquid in South Sumatra and Kalimantan as blazes worsen haze and disrupt livelihoods in Palembang. Mandalika MotoGP: Marco Bezzecchi won the Indonesian Grand Prix as Jorge Martin reclaimed the championship lead; the event also boosted sales for 114 local small businesses. Cultural Repatriation: Indonesia and the Netherlands agreed to return more than 30,000 historical objects, including ancestral remains, with joint research planned on other collections. Technology Investment: Indonesia is positioning Bali’s Kura-Kura special economic zone as a hub for AI and semiconductor research, including projects with China’s Tsinghua University.

Diplomacy: Egyptian President Abdel Fattah al-Sisi arrived in Jakarta ahead of Sunday’s talks with President Prabowo Subianto. The leaders are expected to sign agreements on visas, fisheries and statistics, and a plan to deepen their strategic partnership. Economic Policy: Indonesia is targeting 6% growth in 2027 while cushioning household spending. Fourth-quarter support includes rice aid for 33.24 million people and Rp300,000 monthly wage subsidies for 13.3 million workers; the government is also planning vocational training and wider access to bank accounts. Haze: Fires in Sumatra and Kalimantan sent smoke across the region, pushing Singapore’s air quality into the “very unhealthy” range and prompting warnings ahead of the Formula One Grand Prix. Development: Indonesia has asked the Asian Development Bank for more support for education, social infrastructure and digital infrastructure as it pursues its 2045 development goals. MotoGP: Marc Marquez won the Mandalika sprint to take the championship lead, as Aprilia riders faltered.