Prabowo Asserts More Sovereignty Over Metals
JAKARTA, Aug 14 (Reuters) – Mover over London Metals Exchange. Indonesian President Prabowo Subianto announced a plan on Friday to create a new exchange that will set prices for the country’s strategic commodities by the start of next year, in a fresh gambit to leverage the country’s vast natural resources to boost growth. Since taking office in 2024, Prabowo has pushed policies that expand state influence over critical minerals in the resource-rich nation, a major global supplier of palm oil, nickel products and thermal coal, as well as copper, bauxite and natural gas. The announcement, made during Prabowo’s speech on his 2027 budget proposal, followed remarks to reassure markets over the role of a new state export firm, Danantara Sumberdaya Indonesia, which will monitor key commodity shipments, but would not take control of exports. “We do not only want to be a producer of the world’s commodities, but also a price setter. We want Indonesia to become a place where commodities are traded. If they don’t want to pay the prices we set, then don’t buy them,” Prabowo said in a fiery speech in parliament. “Better to keep those commodities, nickel, tin, gold in the ground for our children, grandchildren,” he added. “Our coal, our gas, our oil… Let them remain in the ground. We drink the coffee ourselves.”
New Sharia Gold EFT
Jakarta (ANTARA) – Indonesia’s Financial Services Authority (OJK) and stock exchange operators launched a Sharia-compliant Gold Exchange-Traded Fund (ETF) on Monday, aiming to expand the nation’s bullion market and deepen capital sector liquidity. “This marks the expansion of the bullion market as a quick win within our eight action plans,” said Friderica Widyasari Dewi, Chairwoman of the OJK Board of Commissioners, during the launch in Jakarta. The newly introduced Gold ETF allows investors to gain exposure to gold price movements on the Indonesia Stock Exchange (IDX) without physically storing the precious metal. The instrument adheres to Islamic financial principles under a fatwa issued by the National Sharia Council of the Indonesian Ulema Council (DSN-MUI). Indonesian Central Securities Depository (KSEI) President Director Samsul Hidayat said the product integrates physical gold as an underlying asset, records digital ownership via Electronic Gold Receipts (EGR) at KSEI, and facilitates participation unit trading on the IDX. “Today’s launch of the Gold ETF symbolizes our hope that the capital market will thrive and contribute to Golden Indonesia 2045,” Hidayat said, adding that the initiative bridges physical commodities with traditional capital markets to diversify local investment options.
Kitchen Operators Haven’t Been Paid
The liquidity crisis that led to the resignation of Indonesia’s central bank governor can be found in the government’s Free Meals Program. A prime example is a kitchen built in a remote location in Sulawesi for $100,000) under a government plan to incentivize investors to help provide the massive infrastructure needed for President Prabowo Subianto ‘s flagship initiative to deliver free meals to 83 million Indonesians, including school children and pregnant and breastfeeding women. “My reputation has been badly damaged, and the losses are enormous,” Sigit Buludawa, a 34-year-old lawyer who built the kitchen in November using all his money and loans from unlicensed lenders, told Reuters during a recent visit to his low-income village. Sigit is one of at least 400 investors who borrowed money to build more than 1,500 kitchens in remote areas on reimbursement terms that have now been delayed or changed as the government seeks to reduce costs for the free meals program, according to multiple interviews with kitchen owners, public documents and confidential government contracts reviewed by Reuters. Mounting debts are the latest blow for an initiative that has struggled with governance issues, supply chains problems, mass food poisoning cases and financial cutbacks since it was launched last year, leaving kitchens idle, children unfed and investors owing tens of millions of dollars.
Poverty Rate Lowers, But…
Indonesia’s poverty rate has fallen further, according to data recently released by Statistics Indonesia (BPS), but economists say widening inequality suggests the poverty line is too low, so the statistical improvement may not fully reflect households’ actual welfare. BPS reported that the national poverty rate declined to 8.07 percent in March 2026, down from 8.25 percent in September 2025 and 8.47 percent a year earlier. The number of people living below the poverty line fell to 22.93 million, a decrease of 430,000 from September and 920,000 from March 2025. The decline was driven largely by urban areas, where the poverty rate dropped to 6.34 percent from 6.6 percent six months earlier. Rural poverty edged down to 10.67 percent from 10.72 percent, leaving a gap of more than four percentage points between urban and rural regions. Center of Economic and Law Studies (CELIOS) executive director Bhima Yudhistira called for a swift overhaul of Indonesia’s poverty line methodology, arguing that the current benchmark no longer reflected actual living standards. He said the falling poverty rate alone painted an incomplete picture, as many middle-income households had become increasingly vulnerable amid rising living costs and shrinking job opportunities. “If we only look at the declining number of people living in poverty, the picture is incomplete. The middle class is facing higher living costs, does Read on The Weekender not receive government subsidies or social assistance, and formal employment opportunities are becoming increasingly limited,” he told The Jakarta Post on Friday. “Meanwhile, the wealthiest groups continue to receive various incentives, and CELIOS data on the assets of the rich show an extraordinary increase in wealth. As a result, inequality has widened. (Jakarta Post)
Economic Fundamentals Resilient But…..
Indonesia has recorded resilient economic fundamentals in the first six months of this year, but many households still grapple with weak spending power and depleted savings, according to the Jakarta-based think tank Centre for Strategic and International Studies (CSIS). CSIS researcher Deni Friawan said in a media briefing on Thursday that the country’s economic growth remained above expectations, even as the gross domestic product recorded in the second quarter deteriorated to 5.29 percent year-on-year (yoy) from 5.61 percent in Q1. However, Deni said the expansion was not broad-based. High domestic consumption was coupled with declining household savings and rising debt amid widening wealth inequality. Deni pointed to increasingly polarized deposits, noting that balances in small accounts holding less than Rp 100 million (US$5,595) kept shrinking, while those above Rp 50 billion grew by roughly 40 percent. “Spending among upper-income consumers is increasing while spending among the middle class is slowing down, indicating that [overall] people’s spending power is not keeping up with GDP growth,” he explained. In the manufacturing sector, expansion was concentrated in sectors such as trade, hotels, transportation and telecommunications, while labor-intensive industry lagged. Indonesia has experienced an increase in investment supported by foreign direct investment, which offset weaker domestic investment. “We are increasingly relying on foreign investment, and this investment is not spread across all sectors. If we look at the figures by sectors, it turns out that the sectors experiencing growth are those that are more capital-intensive, particularly the metals and infrastructure-related sectors,” he said. (Jakarta Post)