RESTORING ASN, RESTORING THE INTEGRITY OF INDONESIA’S CIVIL SERVICE

By KUSNANDAR & CO., Attorneys at Law – Jakarta, INDONESIA

The Constitutional Court’s (MK) decision to grant the judicial review of Law No. 20 of 2023 on the State Civil Apparatus (ASN) marks an important step in safeguarding the independence and professionalism of Indonesia’s bureaucracy. By approving case No. 121/PUU-XXII/2024, the Court reaffirmed the necessity of an independent oversight body—the Civil Service Commission (Aparatur Sipil Negara, or ASN)—to ensure the merit system functions properly and to protect civil servants from political interference.

 

In its consideration, the Court highlighted a long-standing issue: throughout Indonesia’s bureaucratic history, civil servants have too often been caught in the tug of war of political interests. Changes in political leadership, power dynamics, and vested interests have frequently influenced appointments, transfers, and promotions within the civil service. As a result, the bureaucracy—supposed to be the backbone of public service—has sometimes been reduced to an instrument of political power.

 

This ruling deserves recognition because it seeks to realign the balance of authority within Indonesia’s personnel management system. The Court clearly emphasized the need for a separation of functions between policy-makers, policy implementers, and policy overseers. Without such separation, overlapping authority and conflicts of interest are inevitable, jeopardizing objectivity and accountability in governance.

 

Under the new ASN Law, oversight functions had been transferred to the National Civil Service Agency (BKN) and the Ministry of Administrative and Bureaucratic Reform (PANRB). However, the Court found this problematic—how can an institution act as both the executor and the supervisor of its own policies? Here lies the importance of ASN as an independent checks-and-balances mechanism operating outside the executive structure, ensuring that the merit system is genuinely implemented.

 

Historically, ASN has played a crucial role in guaranteeing that every civil servant is recruited, promoted, and transferred based on competence rather than political affiliation or personal connections. The abolition of ASN raised legitimate concerns about the regression of meritocracy in Indonesia’s bureaucracy. The merit system is, after all, the foundation of a professional, accountable, and politically neutral civil service.

 

With ASN’s reinstatement, civil servants should be able to work with a greater sense of security and career clarity. They would no longer have to fear that their career trajectories could be threatened by shifts in political leadership or administrative favoritism. Protecting the professionalism of the civil service is essential to ensuring that bureaucracy serves the public interest—not the interests of power.

 

Nevertheless, this Constitutional Court decision also poses a challenge to both the government and the House of Representatives. The revision of the ASN Law must not be a mere formal restoration of ASN, but a genuine effort to strengthen its effectiveness, independence, and oversight powers. ASN must not be revived as a symbolic institution with limited authority; it should be empowered to enforce accountability and uphold the principles of meritocracy.

 

Ultimately, this ruling reminds us that bureaucratic reform is not only about administrative efficiency but also about institutional integrity and moral responsibility. A neutral, merit-based bureaucracy is essential to building a clean, professional, and service-oriented government. Restoring ASN means restoring the dignity and integrity of Indonesia’s civil service—ensuring it serves the people, not political power.

K&Co - October 17, 2025

DEBT WITHOUT DEPENDENCY : DANANTARA’S PATH TO SUSTAINABLE INFRASTRUCTURE FINANCING

 By KUSNANDAR & CO., Attorneys at Law – Jakarta, INDONESIA

The initiative taken by Rosan P. Roeslani, Head of the State Investment Management Agency (Danantara), to comprehensively evaluate the debt repayment plan for the Jakarta–Bandung High-Speed Rail (Whoosh) project is a strategic and commendable move. From the beginning, this ambitious project has stood as a symbol of Indonesia’s drive toward modern, high-technology infrastructure. However, it has also raised persistent questions about financial feasibility, governance, and the long-term sustainability of large-scale investments.

 

Rosan’s statement that three repayment schemes are being developed and will be discussed with the Ministry of Finance and the Ministry of Transportation demonstrates a prudent, data-driven approach to decision-making. It signals that the government is learning from past experiences, moving away from reactive financial management toward more structured and transparent evaluation. The Whoosh project is not merely about building a train line—it reflects Indonesia’s credibility in handling complex, multinational infrastructure collaborations, particularly with China, whose financing and technology have been integral to the project’s realization.

 

Finance Minister Purbaya Yudhi Sadewa’s assurance that Danantara can settle the Whoosh debt without relying on the state budget (APBN) is equally noteworthy. His statement underscores the government’s commitment to maintaining fiscal discipline at a time when global and domestic economic pressures remain high. By leveraging dividends and profits from state-owned enterprises (SOEs), Danantara aims to find a solution within the ecosystem of national assets—an approach that aligns with Indonesia’s broader goal of achieving financial self-reliance and reducing fiscal risk exposure.

 

The proposed options—transforming PT Kereta Cepat Indonesia China (KCIC) into an asset-light operator and providing additional capital injection to PT Kereta Api Indonesia (KAI) through Danantara’s internal funds—represent a new philosophy in managing national strategic projects. The asset-light structure would allow KCIC to concentrate on operations, service quality, and commercial growth, while infrastructure ownership and debt management would be handled by more financially resilient entities. This separation of roles could improve efficiency, enhance accountability, and make the project more appealing to future investors.

 

Nevertheless, these steps must be accompanied by strong transparency and public communication. The government must explain how the debt restructuring will be implemented, what fiscal implications it may have in the medium term, and how projected revenues—estimated at around Rp 1.5 trillion per year—will contribute to repayment. Without open disclosure, skepticism could grow, particularly given past controversies surrounding project cost overruns and shifting financial responsibilities.

 

The broader implication of this effort extends beyond the Whoosh project itself. If successful, Danantara’s model could serve as a blueprint for managing other large-scale national projects—such as renewable energy initiatives, toll road expansions, and new capital city development—without heavy dependence on public funding. It reflects a maturing financial ecosystem in which the state plays the role of enabler rather than sole financier.

 

Ultimately, Rosan’s initiative and Danantara’s evaluation process signify a new chapter in Indonesia’s infrastructure policy: one rooted in sustainability, independence, and accountability. The Whoosh project, once seen as a financial burden, could transform into a benchmark for smarter, more disciplined investment management. If executed with transparency, sound governance, and consistent oversight, this approach can strengthen Indonesia’s fiscal resilience while ensuring that ambitious infrastructure projects truly serve the public interest.

K&Co - October 17, 2025

LEGAL PRUDENCE IN PRACTICE : THE JAKARTA GOVERNOR’S CONSULTATION WITH THE KPK

By KUSNANDAR & CO., Attorneys at Law – Jakarta, INDONESIA

The visit of Jakarta Governor Pramono Anung to the Corruption Eradication Commission (KPK) on October 16, 2025, deserves recognition from a legal and governance standpoint. Rather than being seen as a political move, the meeting between the governor and the KPK leadership reflects a form of administrative prudence and a genuine commitment to uphold good governance. The discussion reportedly revolved around two major issues that have long burdened Jakarta’s development agenda: the dismantling of the abandoned monorail pillars along Rasuna Said Street and the future utilization of the Sumber Waras Hospital land.

 

From a legal perspective, the governor’s initiative is firmly grounded in Indonesia’s administrative and anti-corruption framework. The KPK Law (Law No. 19 of 2019) mandates the Commission to coordinate and supervise government institutions in efforts to prevent corruption. Consulting the KPK, therefore, is not an act of interference but a legitimate preventive measure that ensures future public projects are implemented transparently and within the bounds of the law. It demonstrates an understanding that prevention is far more effective and responsible than waiting for legal violations to occur.

 

The issue of the monorail project is a clear example of the need for legal due diligence. The pillars, remnants of a failed project, are not only physical obstructions but also represent unresolved legal and asset management questions. Under Government Regulation No. 27 of 2014 on the Management of State and Regional Property, such assets must be reviewed, audited, and officially written off or repurposed before any physical dismantling can take place. By coordinating with both the Jakarta High Prosecutor’s Office and the KPK, the governor ensures that the dismantling will not constitute an unlawful act under Articles 2 and 3 of the Anti-Corruption Law (Law No. 31 of 1999 jo. Law No. 20 of 2001), which prohibit actions causing financial loss to the state. This approach reflects a strong commitment to avoid administrative negligence or potential corruption allegations that often arise in asset disposal processes.

 

The same prudence is evident in the handling of the Sumber Waras land issue. The controversy, which dates back to 2014, once drew scrutiny from the Audit Board of Indonesia (BPK) over irregularities in land pricing. A decade later, the property’s market value has nearly doubled, making its resale impractical and financially disadvantageous for the province. Instead of ignoring the past findings, Governor Pramono has chosen to consult the KPK and ensure that all recommendations from BPK are properly followed, in accordance with Article 20(2) of Law No. 15 of 2004 on the Accountability of State Finances. Repurposing the land for public health facilities not only serves the city’s social needs but also aligns with the principle of economic and social benefit embedded in public asset management law.

 

Beyond these two issues, the governor’s call for broader cooperation with the KPK in anti-corruption education and prevention programs deserves equal praise. Article 13(c) of the KPK Law provides the legal foundation for such educational efforts, emphasizing that the fight against corruption must begin with awareness and institutional integrity. By promoting ethics training and transparency initiatives within Jakarta’s bureaucracy, the governor is strengthening the city’s administrative culture in a way that goes beyond compliance — toward genuine public accountability.

 

In the realm of administrative law, the principle of prudence requires public officials to act carefully and lawfully in every decision that involves public resources. The governor’s visit to the KPK exemplifies this principle in practice. It is an act of due diligence, not defensiveness; a proactive measure to close legal gaps before they become liabilities. Such behavior reflects a maturing understanding of governance — one that recognizes oversight not as a threat, but as an integral part of democratic accountability.

 

Seen in this light, Governor Pramono Anung’s initiative is not only legally sound but also symbolically powerful. It demonstrates that consultation and coordination with law enforcement bodies should be a normal part of governance, not a sign of political vulnerability. If other regional leaders adopt similar practices, Indonesia could move closer to the ideal of clean, transparent, and integrity-based governance where legality and public interest are at the heart of every policy decision.

K&Co - October 16, 2025

SOYBEANS AND THE TENSION BETWEEN TWO GIANTS

By KUSNANDAR & CO., Attorneys at Law – Jakarta, INDONESIA

China has set a new record in soybean imports, reaching 12.9 million tons throughout September 2025. Yet, this milestone represents more than just a number in trade statistics. Behind it lies a strategic decision: Beijing has completely halted soybean purchases from the United States.

 

This move sends a clear signal from President Xi Jinping’s administration amid renewed tensions between the world’s two largest economies. As the trade war flares up once again, Chinese imports from the U.S. face steep tariffs. In response, Beijing has shut its doors to American soybeans while expanding supplies from other nations, such as Brazil, Argentina, and even several African countries.

 

This is not merely an economic adjustment—it is a political maneuver. China is demonstrating that its dependence on the U.S. can be severed at will. In today’s geopolitical landscape, trade no longer stands apart from diplomacy; it has become one of its most powerful tools.

 

The repercussions are immediate across the Pacific. American soybean farmers, in the midst of their harvest season, have lost one of their biggest buyers. Prices in the Chicago Board of Trade have fallen in recent weeks, underscoring the pressure on U.S. agriculture. Ironically, the protectionist policies championed by President Donald Trump have come back to hurt the very farmers who form his political base.

 

In contrast, Beijing’s move to diversify soybean imports reinforces China’s image as an adaptable economic powerhouse. By securing alternative suppliers, China not only safeguards its domestic needs but also sends a message that American dominance in global trade can be challenged through careful, calculated policy.

 

The tension escalated further when China imposed new restrictions on the export of rare earth metals—resources vital to global high-tech industries. In retaliation, Trump threatened to cancel his scheduled meeting with President Xi and raise tariffs by up to 100 percent on Chinese goods. Although the White House later softened its tone and expressed openness to negotiation, the relationship between the two powers has clearly entered a new phase of strain.

 

Once again, the world is reminded that in any trade war, there are no true winners. On one hand, the United States strives to preserve its global economic leadership. On the other, China asserts its autonomy and growing influence. Both, however, suffer from the resulting instability, economically and politically alike.

 

Indonesia should pay close attention to this unfolding situation. As a country heavily reliant on soybean imports—particularly for staple foods like tofu and tempeh—fluctuations in global soybean prices will be felt directly by its people. When prices swing sharply, the impact is immediate at home. Diversifying import sources and strengthening local soybean production must therefore become national priorities, not mere rhetoric.

 

The soybean story between China and the United States illustrates a deeper reality: globalization is entering a new phase—more political, more fragile, and increasingly driven by power dynamics. A nation’s economic sovereignty today is not defined solely by its natural wealth or production capacity, but by its resilience amid global geopolitical turbulence.

 

Ultimately, the humble soybean carries a profound lesson: in an interconnected world, the decision of one nation can affect farms, kitchens, and food policies across the globe. When two giants clash, the tremors reach even the smallest dining tables.

K&Co - October 14, 2025

FINANCE MINISTER PURBAYA IS RIGHT TO REJECT USING THE STATE BUDGET FOR THE HIGH-SPEED RAIL DEBT

 By KUSNANDAR & CO., Attorneys at Law – Jakarta, INDONESIA

The controversy surrounding the Jakarta–Bandung High-Speed Rail (KCJB) project resurfaced after Danantara’s Chief Operating Officer, Dony Oskaria, proposed that the government help resolve the project’s mounting debt. He offered two options: the government could inject additional state capital into PT Kereta Api Indonesia (KAI), or take over ownership of the KCJB infrastructure, leaving the operator to focus solely on operations.

 

Finance Minister Purbaya Yudhi Sadewa firmly rejected the proposal, emphasizing that the high-speed rail project was structured under a business-to-business (B2B) scheme, not as a state-funded initiative. Consequently, the government has no legal obligation to assume the project’s debt. From a legal and fiscal governance standpoint, the Finance Minister’s stance is correct.

 

From the beginning, the project’s legal foundation was clear. Presidential Regulation No. 107 of 2015 explicitly states that the project’s financing does not involve state or regional budgets but is entirely carried out by a consortium of business entities. This means the government is not a party to the loan agreement or any debt guarantees. The legal and financial responsibility rests fully on the consortium—comprising Indonesian state-owned enterprises (KAI, Wijaya Karya, Jasa Marga, and PTPN VIII) and their Chinese partners.

 

Any attempt to shift the project’s financial burden to the state budget would contradict key legal principles under Law No. 17 of 2003 on State Finance and Law No. 19 of 2003 on State-Owned Enterprises (SOEs). The state may only assume obligations that are explicitly approved and allocated within the national budget, not debts arising from independent corporate decisions.

 

The Finance Minister’s refusal also reflects a commitment to fiscal discipline and to preventing moral hazard. If every SOE facing financial loss could rely on state funds to cover its business risks, the distinction between corporate responsibility and government intervention would blur. Upholding the “no bailout” principle is crucial to maintaining public trust in how public funds are managed and ensuring that taxpayers are not forced to underwrite commercial missteps.

 

This decision, however, does not mean there are no viable solutions. Internal restructuring among SOEs remains possible. Danantara, as the investment management entity for state-owned enterprises, is mandated to optimize the use of BUMN assets and dividends. With annual dividend receipts reportedly reaching tens of trillions of rupiah, it would be reasonable for Danantara to support KAI or KCIC’s capital position without drawing on public funds. Debt restructuring negotiations with the China Development Bank can also be pursued—adjusting terms, tenure, or interest rates—without shifting any liability to the government.

 

Meanwhile, the idea of transferring the KCJB infrastructure to government ownership can only be justified if supported by a clear legal basis and transparent process. Such a transfer would require proper asset valuation, political approval, and regulatory backing to avoid being perceived as a hidden bailout.

 

Legally, the government bears no responsibility for KCJB’s debt. Fiscally, the Finance Minister’s rejection demonstrates a sound commitment to maintaining budgetary discipline. From a governance perspective, it reinforces the need for SOEs to act prudently, independently, and professionally in managing their commercial risks.

 

The KCJB debt challenge is indeed complex, but the solution must not compromise the integrity of state financial management. The burden of resolving it lies within the corporate sphere, not the national treasury. A strategic national project should stand as a testament to the strength and independence of Indonesia’s state enterprises—not as another strain on public finances.

K&Co - October 13, 2025

PRESIDENT PRABOWO’S MEETING AT KERTANEGARA FOCUSES ON FINANCE AND PEACE DIPLOMACY

By KUSNANDAR & CO., Attorneys at Law – Jakarta, INDONESIA

The routine meeting led by President General (Ret.) Prabowo Subianto at his private residence on Jalan Kertanegara on Sunday evening (October 12, 2025) was far from an ordinary agenda. With the presence of Vice President Gibran Rakabuming and several ministers from the Merah Putih Cabinet, this gathering sent a strong signal about two strategic issues that are currently the government’s main focus: the stability of the national financial system and Indonesia’s role in international peacekeeping missions.

 

Discussions on the financial and banking system reflect the government’s awareness of global challenges impacting the domestic economy. The policy on managing export proceeds (DHE) under review demonstrates efforts to strengthen the management of the country’s financial resources in a more effective and accountable manner. In a global economy rife with uncertainty, the management of foreign exchange reserves is crucial to maintaining monetary stability and Indonesia’s competitiveness.

 

Furthermore, the directive to prepare peacekeeping forces for deployment to Palestine, should a peace agreement be reached at the Egypt Summit, underscores Indonesia’s active diplomatic stance on the international stage. This approach reflects the country’s commitment to contributing to regional and global stability, while enhancing Indonesia’s image as a nation concerned with humanitarian issues and global peace.

 

This routine meeting also highlights President Prabowo’s intensive leadership style, directly overseeing government operations. Frequent meetings like these enable the government to swiftly adjust policies and ensure priority programs remain on track.

 

However, the lack of detailed disclosure regarding specific discussion points raises questions. Are there sensitive issues being deliberated behind closed doors? Or is this a communication strategy to maintain stability and caution amidst complex political and economic dynamics?

 

What is clear from this Kertanegara meeting is the government’s readiness to face significant challenges both domestically and internationally. Strengthening the financial system and preparing for peacekeeping roles are two critical priorities requiring full support from all elements of society.

 

Moving forward, it is important for the public to receive more transparent information to better understand the government’s strategic steps in maintaining economic stability while fulfilling a responsible diplomatic role.

 

Moreover, managing export proceeds is not a simple matter amid a volatile global economy. Trade wars, commodity price fluctuations, and geopolitical tensions directly affect the rupiah’s exchange rate and the country’s foreign reserves. In this context, export proceeds management policies must anticipate such risks while maximizing their potential contribution to monetary stability and financial liquidity.

 

The government must ensure transparency and accountability mechanisms in managing these funds to prevent market distortions or loss of investor confidence. Strengthening oversight institutions and utilizing digital technology for real-time reporting could be progressive steps. This is also essential for aligning export proceeds policies with ongoing structural reforms, such as developing export-oriented manufacturing industries and enhancing domestic product value.

 

On the other hand, Indonesia’s role in international peacekeeping demonstrates commendable courage and diplomatic responsibility. However, deploying troops requires thorough consideration beyond politics, including legal frameworks and operational readiness of the Indonesian National Armed Forces (TNI). Any peacekeeping deployment must follow existing legislative procedures, including parliamentary approval, and be supported by specialized training to ensure professionalism and risk minimization.

 

From a diplomatic perspective, Indonesia’s involvement in peacekeeping missions presents a strategic opportunity to strengthen its position as a key actor in Southeast Asia and on the global stage. It can expand partnerships, open dialogue channels, and reinforce Indonesia’s image as a country prioritizing peace and international justice. However, this effort demands adequate human resources, sufficient budgets, and solid inter-agency coordination for effective and sustainable implementation.

 

President Prabowo’s leadership style, characterized by frequent and intensive meetings, is a valuable asset in maintaining government continuity. This hands-on approach allows for quick, responsive decision-making, especially in a dynamic environment requiring frequent policy adjustments. However, this should be balanced with open communication mechanisms to provide the public with sufficient information and prevent speculation that could disrupt social and political stability.

 

While some confidentiality about specific issues is understandable for security reasons, excessive secrecy risks closing off public dialogue. In a healthy democracy, transparency strengthens legitimacy and public trust in government. Therefore, the government must strike a balance between protecting strategic information and providing adequate transparency to the public.

 

Ultimately, the meeting at Kertanegara reflects the government’s efforts to address contemporary challenges with a dual focus on economic strengthening and active peace diplomacy. Success in these areas depends heavily on institutional synergy, the involvement of all societal elements, and the courage to make sound decisions grounded in law and good governance principles.

 

Accordingly, the public and stakeholders are encouraged to continue monitoring and supporting the government’s measures to achieve sustainable and dignified national goals.

K&Co - October 13, 2025

GOLD PRICE SURGE AND ITS OPPORTUNITIES FOR INDONESIA’S ECONOMY

By KUSNANDAR & CO., Attorneys at Law – Jakarta, INDONESIA

 

The recent surge in global gold prices has once again become a central topic of discussion among investors and policymakers. In the past few days, gold prices have reached their highest levels in years, driven by escalating geopolitical tensions, a weakening U.S. dollar, and persistent inflation concerns across major economies. While some may see this as a sign of global economic instability, the rise in gold prices also offers several positive impacts, particularly for Indonesia’s national and regional economies.

 

Gold has long been recognized as a safe haven asset — a store of value that investors turn to when financial markets become unpredictable. In today’s climate of uncertainty, gold provides reassurance. Those who have invested in gold, whether in the form of bullion, jewelry, or digital instruments, are now seeing their investments appreciate significantly. This appreciation not only strengthens individual financial positions but also builds broader confidence in tangible, value-based investments amid global volatility. Once again, gold has proven its enduring relevance as a protector of wealth.

 

Beyond individual investors, the rise in gold prices offers meaningful benefits to Indonesia’s economy. As one of the world’s largest gold producers, Indonesia stands to gain from increased global demand and higher export values. When gold prices rise, so too do state and regional revenues. Taxes, royalties, and local income from mining operations all expand, creating fiscal space for local governments to fund infrastructure projects and social development. In this sense, the surge in gold prices can act as a catalyst for regional growth, particularly in mining-based provinces.

 

From a trade perspective, higher gold prices could also help improve Indonesia’s export performance. Increased export value strengthens foreign exchange reserves, supports the balance of payments, and potentially stabilizes the rupiah amid external pressures. This advantage becomes especially important for emerging economies like Indonesia, where currency stability often depends on external trade performance. Leveraging this moment wisely could enhance Indonesia’s economic resilience on the global stage.

 

The positive ripple effects extend further into financial inclusion and innovation. Over the past few years, digital investment platforms have made gold ownership more accessible to the public. With the current upward trend, public interest in digital gold investments has grown rapidly, particularly among younger generations seeking safe and flexible investment options. This shift not only democratizes access to investment but also improves financial literacy and promotes a culture of long-term savings.

 

Corporations, particularly in the mining and jewelry sectors, are also benefiting from the rising gold prices. Stronger profit margins and healthier cash flows provide room for reinvestment and expansion. With responsible management, these profits can be channeled into improving operational sustainability, advancing environmental standards, and supporting local community development. In this way, the gains from higher gold prices can translate into broader social and economic benefits.

 

Nevertheless, the opportunities presented by rising gold prices must be managed prudently. The government has a crucial role in ensuring that the benefits are distributed fairly and sustainably. Strengthening transparency in the mining sector, encouraging downstream processing, and building national gold reserves are strategic steps to ensure that the long-term value of the commodity contributes to national resilience rather than short-term speculation.

 

Ultimately, the surge in gold prices is not merely a reflection of global economic anxiety; it is also a reminder of the opportunities within uncertainty. For Indonesia, this moment provides a chance to reinforce economic stability, diversify income sources, and enhance public confidence in investment. Gold, after all, has always symbolized endurance and value — qualities that the nation must cultivate as it navigates a rapidly changing global economy.

 

If managed wisely, today’s rise in gold prices will not only enrich investors but also strengthen Indonesia’s broader economic foundations. It can serve as both a shield in times of crisis and a stepping stone toward a more resilient, equitable, and forward-looking national economy.

K&Co - October 9, 2025

JAKARTA AND THE CENTRAL GOVERNMENT : FINDING A MIDDLE PATH FOR DEVELOPMENT

By KUSNANDAR & CO., Attorneys at Law – Jakarta, INDONESIA

 

Amid growing fiscal pressure, the Jakarta Provincial Government has found a different way forward. Governor Pramono Anung and Minister of Finance Purbaya Yudhi Sadewa have recently agreed on a creative financing scheme to support the construction of the new Bank Jakarta headquarters in the Sudirman Central Business District (SCBD).

 

Their meeting at City Hall on October 7, 2025, marks a new chapter in the fiscal relationship between the central and regional governments. It is no longer just about budget allocation, but about how both parties can collaborate through a win-win solution—finding financial balance in the midst of constraint.

 

After a Rp 15 trillion reduction in revenue-sharing funds (Dana Bagi Hasil or DBH), Jakarta’s regional budget dropped from Rp 95 trillion to Rp 79 trillion. Yet rather than pausing development, the provincial government chose innovation. The new Bank Jakarta building will be financed through a state asset utilization scheme: the central government will lease strategic land in SCBD to Bank Jakarta for 50 years, with a revenue-sharing agreement—30 percent for the central government, and the rest for the city-owned bank and the provincial government.

 

This model creates a dual benefit. The central government gains long-term economic value without spending on construction, while Jakarta can continue developing key infrastructure without straining its regional budget. Efficiency and fiscal sustainability meet in one creative policy.

 

Even more promising is the Finance Minister’s approval for Jakarta’s regional-owned enterprises (BUMD) to access part of the Rp 200 trillion fund managed by state-owned banks (Himbara). These funds can be channeled into productive sectors and small and medium enterprises (SMEs), potentially expanding the economic impact beyond SCBD’s skyscrapers to Jakarta’s broader business ecosystem.

 

Of course, every innovative policy requires caution. Leasing state assets for half a century must be governed with strong oversight to prevent legal disputes or misuse. Both the central and provincial governments need to ensure transparency in asset valuation, profit sharing, and project auditing. Likewise, Bank Jakarta must uphold sound governance so that the access to funding translates into genuine productivity, not idle capital.

 

Equally important is balance. While SCBD symbolizes Jakarta’s global ambitions, development must not become too concentrated in elite areas. The government must ensure that growth and opportunity reach the city’s outer regions and underserved communities.

 

Still, the collaboration between Pramono Anung and Purbaya Yudhi Sadewa deserves recognition. At a time when many regional leaders lament limited fiscal space, Jakarta has demonstrated that financial creativity can be a viable path forward. This partnership shows that development does not always depend on central government transfers, but on the ability of local governments to manage their resources intelligently and responsibly.

 

If carried out transparently and prudently, the Bank Jakarta project could stand as more than just another office tower—it could symbolize fiscal maturity and a new spirit of collaboration between the central and regional governments. It’s a reminder that, even under fiscal pressure, innovation and cooperation remain the true engines of progress.

K&Co - October 9, 2025

PURBAYA’S EFFICIENCY AND THE SHIFT IN INDONESIA’S FISCAL LAW PARADIGM

 By KUSNANDAR & CO., Attorneys at Law – Jakarta, INDONESIA

 

Finance Minister Purbaya Yudhi Sadewa’s recent remarks on budget efficiency mark a significant shift in how Indonesia’s government interprets fiscal management. He made it clear that he would not impose budget blocking or spending cuts, practices commonly associated with his predecessor, Sri Mulyani Indrawati. For Purbaya, efficiency does not mean trimming budgets—it means ensuring that public funds are used as intended, on time, and free from corruption. “Efficiency means making sure the money is spent for its purpose, on time, and not stolen,” he said.

 

What seems like a managerial statement actually carries deep legal and policy implications. Purbaya is redefining the traditional concept of efficiency—not as saving cash, but as optimizing the public benefit derived from every rupiah of state spending. Under Sri Mulyani, efficiency was implemented through Minister of Finance Regulation (PMK) No. 57/2025, which authorized the ministry to determine specific efficiency targets for each government agency. The policy often translated into spending cuts on goods and capital expenditures, all in the name of fiscal discipline. Legally, that approach was legitimate—it aligned with Law No. 17/2003 on State Finance, which allows budget adjustments to maintain fiscal stability. Yet, in practice, sudden cuts frequently caused uncertainty, delaying contracts and slowing public spending.

 

Purbaya’s approach moves in the opposite direction. He rejects efficiency through budget cuts and instead focuses on cash management efficiency—ensuring that idle funds do not accumulate and burden the state with unnecessary interest payments. “If Rp400 trillion is idle, at a 6 percent interest rate, that’s Rp24 trillion lost,” he explained. This concept of efficiency is actually closer to the legal definition embedded in Article 3 of Law No. 17/2003, which requires public finances to be managed efficiently, economically, effectively, transparently, and responsibly. Efficiency, in this legal sense, means maximizing outcomes with minimal resources—not simply cutting costs.

 

As the State General Treasurer, the finance minister has the authority to manage and allocate state cash positions under Law No. 1/2004 on State Treasury. Therefore, reallocating funds without altering the state budget structure is entirely within the law. Furthermore, Purbaya’s decision to abandon the long-standing practice of budget blocking enhances legal certainty for ministries and agencies. Without the fear of sudden revisions, programs can be executed more smoothly. In administrative law terms, this approach helps reduce fiscal maladministration that often arises from mid-year policy changes.

 

Still, this paradigm shift is not without challenges. The government must revise or revoke PMK 57/2025, which still legitimizes across-the-board spending cuts, to prevent regulatory contradictions. At the same time, better oversight mechanisms are essential. Moving funds around without changing budget allocations requires transparency and real-time monitoring to avoid misuse. Without robust internal audits, the “relocation” of idle funds could create new vulnerabilities in public finance governance.

 

Purbaya’s version of efficiency represents a reform in Indonesia’s fiscal philosophy: from nominal efficiency to substantive efficiency. It replaces the obsession with spending cuts with a focus on performance and accountability. This shift calls for bureaucrats to stop asking, “How much can we cut?” and instead ask, “How effectively are we spending?” In legal and policy terms, this aligns with Indonesia’s long-standing aspiration toward performance-based budgeting—a principle that measures efficiency by outcomes, not reductions.

 

True efficiency in public finance is not about how little the government spends, but how wisely it uses public money. Purbaya offers a more rational and legally coherent vision: efficiency as fairness and precision in the use of state funds. The real test, however, lies in consistency. Without fiscal discipline, transparency, and inter-agency coordination, this new model of efficiency risks ending up like the old one—a promising reform stranded in bureaucratic inertia.

K&Co - October 8, 2025

BEYOND THE BADGE : URGENCY OF REAL POLICE REFORM IN INDONESIA

By KUSNANDAR & CO., Attorneys at Law – Jakarta, INDONESIA

Police reform in Indonesia has been a vital part of the country's democratic transition since the fall of the New Order regime in 1998. The separation of the police force from the military and the establishment of an independent institution under a new legal framework marked a significant step toward building a professional, civilian-oriented, and service-based police force. However, more than two decades later, the direction and outcome of police reform are increasingly under scrutiny. Civil society groups, academics, and human rights organizations argue that the reform movement has stalled—if not regressed—in key areas.

 

A primary concern is the persistence of violence and abuse of power within the police institution. Arbitrary arrests, excessive use of force, intimidation of civilians, and even extrajudicial killings continue to occur and damage public trust. Alarmingly, these cases are rarely resolved with transparency or accountability. Justice often only comes when incidents go viral on social media, indicating that internal oversight systems are ineffective or, worse, inactive. This reflects a fundamental weakness in institutional accountability within the Indonesian National Police (Polri).

 

Oversight mechanisms—both internal and external—have also come under criticism. The National Police Commission (Kompolnas), which was established to oversee the force, is frequently seen as lacking authority or effectiveness. Meanwhile, internal mechanisms like the Professional and Security Division (Propam) often appear to resolve cases superficially, imposing minimal administrative sanctions rather than pursuing proper legal consequences for serious misconduct.

 

Beyond legal and structural issues, there is a deeper cultural problem that undermines reform efforts. Despite training programs and some internal initiatives, many officers in the field still operate with a militaristic, repressive mindset. This is particularly evident in their responses to protests, land disputes, and encounters with marginalized communities. The human rights-based and community-oriented policing models that are promoted on paper have not been fully internalized across all levels of the organization.

 

Equally concerning are recent legislative developments. Proposed amendments to the Police Law would significantly expand Polri’s authority—raising fears of the institution becoming overly powerful, with insufficient checks and balances. Critics argue that this could create a “superbody” police force that undermines democratic principles and the rule of law, especially if these new powers are not matched with robust external oversight and public accountability.

 

Taken together, these problems show that police reform in Indonesia cannot be limited to structural and administrative changes. What is needed is a comprehensive transformation that includes institutional reforms, legal clarity, and, most importantly, a cultural shift in how the police view their role in society. The police must understand that they are not merely an extension of state power, but public servants tasked with protecting citizens and upholding justice with integrity and professionalism.

Ultimately, police reform is not solely an internal matter for the institution—it is a public concern that requires active participation from all sectors of society. Civil society groups, the media, academia, and legislators must work together to push for meaningful change. Without serious and sustained reform, Polri risks losing public trust entirely. And trust, once broken, is difficult to rebuild. It is time for police reform in Indonesia to move beyond rhetoric and become a reality that all Indonesians can feel and believe in.

K&Co - October 2, 2025

 

 

BATIK : A CULTURAL HERITAGE, NATIONAL IDENTITY, AND SHARED RESPONSIBILITY

By KUSNANDAR & CO., Attorneys at Law – Jakarta, INDONESIA

National Batik Day, commemorated every October 2nd, is far more than a ceremonial event on the Indonesian calendar. It symbolizes the deep appreciation of a nation for its cultural heritage and reflects a collective awareness of national identity. Batik, a traditional Indonesian textile art, has withstood the test of time—not just as a beautiful piece of cloth, but as a cultural legacy rooted in the nation’s soul.

 

Historically, batik traces back to the era of the Majapahit Kingdom and was initially worn exclusively within royal courts, reserved for kings and nobility. Over time, batik transcended social boundaries and evolved into a widely embraced cultural symbol, with its patterns, colors, and techniques diversifying across regions. This transformation highlights batik as a living tradition—dynamic and adaptable, yet firmly grounded in heritage.

 

Indonesia gained international recognition for batik on October 2nd, 2009, when UNESCO designated it as a Masterpiece of the Oral and Intangible Heritage of Humanity. This historic acknowledgment affirms batik’s value not only to Indonesia but to the world at large. Yet, recognition must come with responsibility. Celebrating Batik Day should go beyond pride; it should serve as a call to action for ongoing preservation, innovation, and promotion of batik in all aspects of society.

 

The 2025 National Batik Day celebrates the theme “Batik Merawit,” highlighting the intricate Batik Tulis Merawit from Cirebon. Known for its fine, detailed linework and bright color palette, this particular style exemplifies the richness of Indonesia’s regional batik traditions. Each region has its own unique motifs and stories embedded in its batik, which is why preservation efforts must be inclusive and representative of the entire archipelago’s diversity.

 

Preserving batik should not be limited to wearing it once a year. Real commitment involves supporting local artisans by purchasing authentic handmade batik, learning about the traditional techniques behind it, incorporating batik education into school curricula, and encouraging its development through creative industries. These are tangible ways to show love and responsibility for our cultural roots.

 

Batik also holds great economic potential. The batik industry supports thousands of artisans across Indonesia. If managed properly, it could become one of the pillars of Indonesia’s creative economy, contributing significantly to both local and national income. However, in pursuing commercialization, a balance must be struck between innovation and preservation. Traditional techniques such as batik tulis (hand-drawn batik) and batik cap (stamped batik) must be safeguarded as symbols of cultural integrity and craftsmanship.

 

More than just an economic commodity, batik plays a vital role in fostering national pride. In a globalized world where cultural identity can be diluted, batik stands as a powerful marker of Indonesian heritage. Wearing batik is not merely a fashion statement; it is a declaration of identity—an affirmation of belonging to a nation rich in culture and tradition.

 

Thus, National Batik Day should not be seen merely as an annual event but as the beginning of a larger cultural movement. Every thread of batik carries with it a story, a value, and a spirit of Indonesia. To care for batik is to care for the soul of the nation. Let us not just wear batik on October 2nd, but weave it into the fabric of our daily lives. Let us celebrate it, preserve it, and elevate it—not just as a legacy of the past, but as a vibrant part of our nation’s future.

K&Co - October 2, 2025.