AGP Executive Report

Indonesia’s Food Security Watch: India’s government says edible oil, fertiliser and foodgrain supplies are stable despite West Asia risks, citing regular imports (including palm oil from Indonesia and Malaysia) and adequate central stocks. ASEAN Investment Outlook: A Malaysian economist calls Indonesia a “scale and commodities” magnet for long-term ASEAN capital, while flagging Vietnam’s manufacturing pull and Malaysia’s LNG/semiconductors strengths. Livestock Feed Trade: The U.S. Grains & BioProducts Council sent a delegation to Indonesia to assess dairy and feedlot demand for U.S. corn co-products like DDGS, aiming to boost feed efficiency. Inflation Pressure: Foreign banks warn inflation may overshoot central bank targets as price freezes fade and food costs feed through, with Indonesia among markets flagged. Digital Travel Identity: Indonesia’s Digi Yatra moves toward cross-border deployment after an IATA trial validated interoperable digital identity and biometric checks. Solar Manufacturing Push: SEG Solar plans a third U.S. module assembly plant in Texas (10.6GW total capacity) and is planning upstream ingot/wafer work in Indonesia. Forest Fire Readiness: Riau puts 11 regions on forest-and-land fire emergency alert ahead of the dry season to speed coordination and response. Wealth Management Expansion: DBS will open 18 new wealth centers across Asia, including Indonesia, as affluent demand grows. Bigger Supply Chain Signals: OECD says China’s industrial sectors got far more state support than competitors, shaping global market share gains.

Pancasila-Driven Economic Overhaul: President Prabowo warned that Indonesia’s economic transformation will face resistance from groups benefiting from corruption, smuggling, and illegal practices, urging tougher decisions that protect long-term public welfare. Centralised Commodity Exports: Indonesia began a transition to a single state-led export system for coal, palm oil, and ferroalloys, with Danantara Sumberdaya Indonesia pledging transparency and price benchmarking to curb under-invoicing and keep proceeds onshore. Solar Push: Indonesia plans a 100 GW solar expansion worth about $71bn, signaling a major scale-up in renewables investment. Digital Infrastructure & AI: ZTE says it’s targeting overseas growth by helping build an “open digital rainforest,” citing data center demand and stricter data security rules; DBS also plans to expand its wealth centres across Asia, including Indonesia. Trade & Manufacturing Pressure: Indonesia’s textile and apparel sector is bracing for tougher global conditions and is pushing export diversification and new trade partnerships. Regional Business Links: Indonesia expands fishery export access to China, while Mastercard rolls out an ASEAN travel campaign across Indonesia and neighbors.

Defense & Trade: India’s Defence Secretary Rajesh Kumar Singh says the BrahMos supersonic cruise missile deal is signed with Vietnam and Indonesia talks are in the “final stages,” signaling a new phase for India’s defense exports in Southeast Asia. Fisheries Exports: Indonesia expands access to China’s market after GACC approved eight more fish processing units, bringing approved facilities to 638; Indonesia ships 1,080 fishery product types and logged $1.04bn in 2025 exports to China. Capital Markets: The IDX lists PT Transcoal Pacific Tbk under the High Shareholding Concentration category after 94.1% of shares are held by certain shareholders, while the exchange notes this doesn’t automatically mean a rule breach. Tourism & SMEs: Indonesia accelerates halal certification for MSME products in 1,500 tourism villages, reporting 31,548 certificates across 1,116 villages. Energy Policy: Finance Minister Purbaya Yudhi Sadewa offers up to 0% income tax incentives for exporters that comply with placing natural-resource export foreign exchange proceeds domestically. Industry & Food: Indonesia’s coconut oil exports show value growth despite lower volumes, driven by price rises amid raw-material limits and El Niño impacts.

Port & Trade Connectivity: Indonesia’s Belawan New Container Terminal (BNCT) will link with Penang Port and Perlis Inland Port via a new MoC, aiming to speed cross-border cargo flows and create an alternative ASEAN–East Asia corridor for Indonesian commodities like palm oil, coffee, cocoa and tea. Defence Exports: India’s Defence Secretary Rajesh Kumar Singh says a BrahMos missile deal with Vietnam is already signed, while Indonesia’s pact is in the final stages—another step in India’s push to sell advanced systems to ASEAN partners. Regional Security Drills: Multinational Exercise PRAGATI 2026 wrapped up in Meghalaya, with 400+ troops from 13 countries (including Indonesia) running counter-terrorism and interoperability drills. Industrial Chemicals: BASF started up a new 2-ethylhexyl acrylate (2-EHA) storage tank in Merak to improve supply reliability and shorten lead times for downstream paints, coatings and adhesives. Aquaculture Industrialisation: Indonesia’s BUBK shrimp farming model in Kebumen expands into a technology-backed, wastewater-managed industrial ecosystem to reduce environmental harm and improve yields.

Indonesia–France Deals: President Prabowo’s Paris visit delivered four commercial pacts worth US$3.5bn, spanning energy security, trade and defense, alongside a new France-Indonesia High-Level Business Council to deepen investment and research ties. Fuel Subsidy Watch: Indonesia will keep subsidized fuel prices unchanged through year-end despite a rupiah slump, with officials citing safe stockpile levels. Defense & Security: At the Shangri-La Dialogue, US Defense Secretary Pete Hegseth urged Indo-Pacific allies to lift defense spending to 3.5% of GDP, warning China against regional hegemony and praising Indonesia’s growing cooperation. Data Center Risk: A Sumatra blackout is raising alarms for Indonesia’s data center push, with industry calling for PLN transparency, grid upgrades, and stronger reliability commitments. Food & Trade: Bulog says rice exports to Malaysia will be priced above Indonesia’s domestic ceiling to protect farmers and state revenue. Halal & Regional Trade: Malaysia again topped the Global Islamic Economy ranking, while Indonesia’s halal trade ecosystem keeps expanding through cross-border business platforms. Energy Transition: Indonesia is moving ahead with wind energy groundwork, including key facilities for its first wind project.

Renewables & Industrial Buildout: Indonesia inaugurated key facilities in Batam for its first wind-to-electricity project, supporting the Tennet 2GW HVDC plan and targeting thousands of local jobs during construction. Circular Economy for SMEs: Aceba and EABC launched an ASEAN circular economy partnership, rolling out a “circular business check” tool in Indonesia, Philippines and Thailand with EU Switch-Asia backing. Energy Transition Planning: Indonesia is preparing 24,000 hectares on Java for the 100 GW solar program, with early focus on 17 GW plus large-scale battery storage. Defense & Maritime Industry: PT PAL began preproduction for the Scorpene Evolved submarine project with Naval Group, aiming to boost Indonesia’s submarine-building capability. Palm Oil Policy Clarity: Indonesia’s government said PT Danantara Sumberdaya Indonesia won’t profit from the centralized CPO export policy, easing concerns during a June–Aug transition. Currency Pressure: Indonesia and India intervened to stabilize currencies amid oil-price shocks tied to the Iran war. ASEAN Fraud Response: The Global Signal Exchange took centre stage at an ASEAN fraud summit, bringing governments and major platforms together to disrupt online scams faster. SME/Water Tech Funding: Singapore’s SG Enviro closed Series A to scale water treatment and recycling across Singapore, Malaysia and Indonesia. Geopolitics & Trade Talks: Putin said EAEU-India trade liberalisation talks have intensified, with Indonesia cited as a recent EAEU trade agreement partner. Prediction Markets Crackdown: Kalshi sued Minnesota over a law criminalizing prediction markets, as Indonesia and other countries continue bans. Rescue Update: Laos rescuers freed one of seven men trapped in a flooded cave, with others still unaccounted for.

Energy Transition Pressure: Iran-war-linked LNG worries are pushing parts of Asia back toward coal, with Taiwan resuming coal-fired electricity purchases and Japan/South Korea easing coal limits to protect power supply. Gold & Capital Markets: UBS trimmed its end-2026 gold forecast to $5,500/oz as rate-cut hopes fade, but investors still expect bullion upside. Indonesia Bonds: Foreigners returned to Asia bond markets in April, buying about $3.1b of Indonesian bonds, mainly short-term IDR instruments after Bank Indonesia lifted yields. Education & Tourism: President Prabowo ordered French language learning at all school levels with France; VP Gibran said the government will keep upgrading tourism quality on sustainability, safety, comfort, and authentic experiences. Palm Oil Export Rules: Indonesia’s palm oil firms are waiting for implementing details after a new natural resource export governance policy named a sole exporter. Labour Rights: A landmark ICJ advisory opinion backs the right to strike under UN and ILO conventions, relevant to Indonesia and 158 ratifying countries. Mining & Finance: Merdeka Gold plans a Hong Kong IPO to raise $500m. Halal Food Expansion: Paris Baguette secured official halal certification in Indonesia, supporting broader Southeast Asia retail growth.

EV Supply Chain Push: Indonesia is pulling automotive component SMEs into the electric vehicle ecosystem, with the Industry Ministry and Investment Ministry mapping EV component demand and partnerships in Cikarang, West Java. Renewables Manufacturing: Indonesia backs its first wind energy conversion project in Batam, aiming to turn the city into a fabrication hub for offshore wind components. Energy Distribution Ahead of Eid: Pertamina Patra Niaga adds nine million subsidized 3-kg LPG cylinders nationwide to keep supplies stable during the extended Eid al-Adha period. Digital Economy vs Water: Indonesia warns that AI, data centres and digital infrastructure could strain water resources as demand for computing and mineral inputs for devices keeps rising. Trade, Finance & Growth Capital: The ADB approved at least $50 million into a Southeast Asia-focused private equity fund targeting mid-sized firms across Indonesia and the region. Tourism Dealmaking: Indonesia Travel Fair 2026 targets Rp60 billion in transactions, bringing together airlines, hospitals and travel partners to boost tourism and health tourism. Disaster Recovery: Indonesia says Sumatra’s post-flood and landslide recovery is now in the permanent phase, with rehabilitation and reconstruction planned through 2028.

Tourism & Retail: Zus Coffee has opened its first Indonesia store in Jakarta’s Puri Indah Mall via Kapal Api Group, betting on app-led ordering and localized drinks as it scales across Southeast Asia. Livestock & Food Demand: Idul Adha livestock farmers in Indonesia report sales down sharply—one goat farmer in East Jakarta said orders fell up to 60% year-on-year as purchasing power weakens. Digital Economy & Skills: Indonesia’s Transmigration Ministry says it’s ready to supply job-ready talent for Batam’s Rp88 trillion AI data center investment, linking growth to community welfare and workforce integrity. Energy & Finance Spillovers: Indonesia’s rupiah has hit record lows as the US-Iran conflict pushes investors toward short-term debt; Bank Indonesia has expanded SRBI issuance to attract inflows, while Thailand leans on short-term notes too. Commodities & Industrial Policy: Indonesia’s export-centralization push is set to reshape global supply chains for coal, crude palm oil and minerals, with regulators targeting suspected under-invoicing and offshore trading. Environment & Wildlife: Two elephants and a tiger were found dead in Bengkulu’s production forest, raising alarms about habitat loss and ongoing threats to Sumatran wildlife. Media & Business Services: Publicis Groupe Indonesia acquired Inter Pariwara Global and iLab Indonesia, adding about 150 media professionals under Spark Foundry to deepen local capabilities.

Eid al-Adha Oversight: Indonesia’s Agriculture Ministry deployed 8,633 veterinary officers nationwide to monitor animal health, halal compliance and slaughter standards ahead of the holiday, as officials cite a livestock surplus (3.2 million available vs 2.4 million demand). Telecom-Fraud Shift to Indonesia: Chinese authorities say telecom-fraud networks displaced by crackdowns in Cambodia and Myanmar are expanding into Indonesia, with a Batam raid detaining 210 foreign suspects after police seized computers. Palm Oil Diplomacy: Indonesia and Malaysia held a joint palm oil engagement programme in Serbia to address consumer concerns tied to new warning labels, aiming for balanced, science-based messaging. Tourism Boost: South Korea will start a temporary visa-free entry for Indonesian group tourists (3+ people) for up to 15 days, targeting higher inbound spending. Energy & Trade Context: Indonesia’s foreign minister stressed adherence to international law and multilateralism in UN debate on Palestine, including respect for maritime shipping lanes. Wellness Travel: WITT expanded in Asia, with Indonesia’s Bali resorts earning certification as wellness-focused tourism demand accelerates.

Indonesia Commodity Export Push: Danantara’s new critical-resources export arm, DSI, is set up as a profit-first SOE and will start as an appraiser/intermediary from June 1, then move toward trading in 2027—while the minister insists no country is excluded from the policy. Energy & Cost Controls: Indonesia’s one-day-a-week work-from-home rule is already cutting subsidized Pertalite fuel use by nearly 9% (April–May), and the government plans to extend it through end-July. MENA Pharma Expansion: Recce Pharmaceuticals is advancing a proposed 10-year exclusive licensing deal for its R327G gel to treat diabetic foot infections across Saudi Arabia, the GCC, Egypt, Algeria and Morocco, with potential payments up to US$3.5m. Global Macro Shockwatch: Markets stay jittery on US–Iran deal hopes and Strait of Hormuz risk, keeping oil and regional currencies— including Indonesia’s—sensitive. Regional Diplomacy: China’s Wang Yi met Indonesia’s Sugiono at the UN, agreeing to deepen maritime cooperation and high-level exchanges.

MOU for cross-border M&A: Generational Group signed an alliance MOU with Japan’s Nihon M&A Center Holdings to expand M&A advisory across Japan, Southeast Asia and the US, aiming to add scale and global reach. Local currency push: Indonesia’s Industry Ministry urged firms to pay more raw-material imports in rupiah to cut dollar exposure and stabilize costs as 24% of inputs still come from abroad. Trade crackdown: Finance Minister Purbaya said sanctions are being considered for 10 companies suspected of trade misinvoicing, with investigations focused on crude palm oil players using Singapore trading channels. Sumatra recovery plan: Government targets full northern Sumatra recovery by 2028 with a multi-year, infrastructure-heavy rehabilitation and reconstruction push after last year’s floods and landslides. Standards drive: Indonesia is accelerating Indonesian National Standards to boost competitiveness and trust in locally made goods. Coral warning: A new study says scuba tourism in the Philippines and Indonesia is causing frequent, often hidden coral damage. Defense industry: PT PAL moved Indonesia’s Scorpene submarine program into pre-production, preparing for domestic build-out.

Industry Standard Push: Indonesia’s Ministry of Industry is accelerating SNI standardization to lift trust and competitiveness for local products, with 2026 targets tied to monitoring, green industry, and Industry 4.0. Security in Papua: The military evacuated 44 gold miners from Papua Highlands after separatist-linked fears drove residents to flee, then tightened nearby security. Food Price Relief for Eid: Coordinating Minister Zulkifli Hasan inspected “cheap markets” in East Java, where subsidized 5-kg rice packs are sold at Rp50,000 ahead of Eid al-Adha. EV Manufacturing Leap: XPENG took 90.1% control of Indonesia’s EIDO plant in West Java, shifting to fully self-operated localized production. Digital & Data-Centre Boom: Indonesia’s sovereign wealth fund INA has deployed about Rp74.5tn, with ~30% going into digital infrastructure tied to AI growth. Halal Cooperation: Indonesia and Peru are exploring mutual recognition for halal certificates under an MRA framework. Regional Spotlight: Indonesia takes over APO chairmanship for 2026–27 as the group advances APO Vision 2030. West Papua Tensions: Independence leader Benny Wenda renewed calls to remove Indonesia from Pacific regional bodies amid escalating violence claims.

Coal & Energy Markets: Asia’s thermal coal imports are set for their strongest May in months, with prices edging up even as Iran-war crude and LNG shocks stay front and center—China’s weaker domestic output is a key driver. Oil & Stocks: Oil slipped and Asian equities rose on hopes of a US-Iran deal to reopen the Strait of Hormuz, though negotiators are still “not to rush.” Indonesia Enforcement: Indonesia arrested a suspect over a 3-ton pangolin-scale smuggling attempt to Cambodia via Tanjung Priok, using fake export paperwork. Digital Governance: Indonesia blocked Polymarket, calling it illegal online gambling after bets tied to Prabowo’s presidency drew attention. Power & Infrastructure: Batang Toru hydropower in North Sumatra is still operating while tower relocation permits are processed after late-2025 floods. E-commerce Rulemaking: Indonesia is finalising revisions to e-commerce regulations to tighten oversight of marketplaces and fees. Hydropower Push: Construction has started on a 300-MW hydropower plant in East Kalimantan to boost energy self-sufficiency.

Hajj Under Tension: The annual Hajj has kicked off in Mecca with 1.5M+ pilgrims arriving as Iran-war worries and regional uncertainty hang over the pilgrimage. Digital Governance: Indonesia’s deputy communications minister Nezar Patria warns algorithm dominance could fuel “digital colonialism,” misinformation, and polarization—urging stronger digital literacy for youth. Banking Deal: SMBC Indonesia is selling a pensioner and pre-pensioner retail loan portfolio worth IDR19.93T (~$1.13B) to BTN, reshaping liquidity and mortgage exposure. Commodity Export Overhaul: Indonesia’s new centralized export agency, Danantara Sumberdaya, is moving from setup to rollout—officials say market updates are coming in weeks as palm oil, thermal coal, and some nickel exports shift under tighter control. AI in Agri-Tech: Malaysia’s VentureTECH backs Pacton’s FishSpeak platform to scale AI/IoT aquaculture management across ASEAN, including Indonesia. Markets Watch: Oil slid to two-week lows on hopes for US-Iran Hormuz talks, lifting Asian stocks.

Commodity Control Shock: Indonesia’s Prabowo is pushing centralized control of key commodity exports under Danantara, a move that could ripple into regional energy security—especially for coal-dependent grids like the Philippines—just as Middle East tensions keep oil and gas markets jumpy. Energy Stress Test: Sumatra’s mass blackout is under police and PLN review, with officials pointing to weather-linked transmission failures and ordering faster upgrades to 500kV/275kV lines. Nickel Split Intensifies: The nickel market is bifurcating into “Class 1 vs Class 2” supply, with low-grade availability and “green” premium claims becoming the new battleground for miners and investors. Cyber as Real-World Harm: A fresh warning reframes hospital ransomware as coercion that can delay care and cost lives, not just “data incidents.” Digital Governance Pushback: Indonesia’s plan to fold ride-hailing into marketplace-style regulation is drawing industry resistance over one-size-fits-all rules. SOE Talent Pipeline: Indonesia launches a Presidential Future Leaders Program to train the next SOE managers, starting with 400 participants.