The Future of Strategic Investment Sectors in Indonesia : A Juridical Analysis within the National Legal Framework

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The global investment landscape is undergoing a significant transformation, shifting toward technology-driven industries, sustainable energy, and downstream industrialization. In Indonesia, this transition is not solely driven by market dynamics but is also strongly supported by a progressive legal framework designed to accelerate national economic transformation. Based on current trends, several sectors are projected to gain increasing prominence in the near future, namely electric vehicles (EV) and battery industries, green energy, advanced downstream industries, and artificial intelligence (AI) alongside digital technology.

 

1. Electric Vehicles (EV) and Battery Industry

The development of the EV and battery industry in Indonesia is firmly grounded in national law, particularly Law Number 3 of 2020, which mandates the downstream processing of mineral resources. In addition, the acceleration of electric vehicle adoption is regulated under Presidential Regulation Number 55 of 2019.

These legal instruments provide a strong foundation for the establishment of an integrated EV ecosystem, covering the entire value chain from nickel mining to battery production. Accordingly, this sector represents not only an economic opportunity but also the implementation of the constitutional mandate to optimize the utilization of natural resources for national prosperity.

 

2. Green Energy (Solar and Energy Storage)

Indonesia’s transition toward clean energy is supported by a legal framework aimed at reducing carbon emissions and increasing the share of renewable energy. This commitment is reflected in Law Number 30 of 2007 and Indonesia’s ratification of the Paris Agreement through Law Number 16 of 2016.

In practice, solar energy development and energy storage technologies have become increasingly attractive sectors for investment. These regulations provide legal certainty while opening opportunities for both domestic and foreign investors to participate in Indonesia’s energy transition.

 

3. Advanced Downstream Industrialization

Indonesia’s downstream policy extends beyond the mining sector and into broader industrial development. This is reinforced by Law Number 25 of 2007, which guarantees legal certainty and investor protection, as well as Law Number 6 of 2023, which simplifies licensing procedures and enhances the ease of doing business.

Through these legal frameworks, Indonesia aims to transform its economy from one reliant on raw commodity exports into a value-added, industrial-based economy with stronger global competitiveness.

 

4. Artificial Intelligence (AI) and Digital Technology

The digital sector, including artificial intelligence, is experiencing rapid growth and increasing investor interest. Although a comprehensive regulatory framework specifically governing AI is still evolving, existing laws provide a foundational legal basis, including Law Number 11 of 2008 (as amended) and Law Number 27 of 2022.

These legal instruments play a critical role in establishing a secure, reliable, and competitive digital ecosystem. As AI technology continues to advance, the need for regulatory clarity becomes increasingly important, particularly in relation to data protection, cybersecurity, and legal accountability.

In conclusion, the sectors projected to become increasingly prominent in Indonesia are not merely driven by global economic trends but are also strongly supported by a forward-looking legal framework. Indonesian regulations clearly indicate a strategic direction toward promoting investment in key sectors while maintaining a balance between economic growth, environmental sustainability, and national sovereignty.

The success of these sectors will ultimately depend on consistent legal implementation, institutional strengthening, and the state’s ability to ensure that incoming investments generate optimal benefits for national development.

By : K&Co - May 5, 2026

Mining Downstreaming as the Epicenter of Chinese Investment in Indonesia

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

In recent years, the flow of foreign investment into Indonesia has undergone a significant transformation, particularly with the increasing dominance of Chinese investors in strategic sectors. Among these, mining downstreaming has emerged as the most prominent and aggressive area of investment. The primary focus lies in processing natural resources—especially nickel—into higher value-added products, such as raw materials for electric vehicle (EV) batteries.

Mining downstreaming is not merely an industrial activity; it represents a long-term, integrated economic strategy. Indonesia, as one of the world’s largest holders of nickel reserves, has become a key target in the global supply chain of the battery industry. In this context, Chinese investment is not limited to the extraction of raw materials but extends to controlling the entire production process from upstream to downstream.

A concrete example of this phenomenon can be observed in industrial zones such as Morowali Industrial Park. This area has rapidly developed into an integrated nickel processing hub, encompassing smelters, refining facilities, and the production of battery-grade materials. The industrial activities within this zone illustrate how investment no longer stops at extraction but advances toward deeper industrialization.

Furthermore, various nickel processing projects aimed at producing EV battery components demonstrate a vertically integrated investment model. In this model, investors act not only as capital providers but also as key controllers of the entire production chain—from mining and processing to global distribution. Such a strategy enables cost efficiency while simultaneously strengthening their position in the global electric vehicle industry.

From a national economic perspective, mining downstreaming offers several advantages, including increased added value, job creation, and the development of new industrial regions. However, it also presents challenges that cannot be overlooked, such as dependency on foreign investment, environmental concerns, and Indonesia’s bargaining position within the global supply chain structure.

In conclusion, mining downstreaming stands as the epicenter of Chinese investment in Indonesia today. This sector not only reflects the dynamics of the global economy but also serves as a key indicator of the country’s industrial transformation—from a raw material exporter to a significant player in technology-driven and future energy industries.

By : K&Co. - May 5, 2026

Legal Perspectives on Chinese Investment in Indonesia’s Special Economic Zones

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The rapid development of Special Economic Zones (SEZs) in Indonesia in recent years cannot be separated from the strategic role played by Chinese investors, who have emerged as key partners in advancing value-added industrial growth. Their involvement—particularly in downstream processing, renewable energy, high-technology manufacturing, and advanced materials—has significantly strengthened Indonesia’s industrial supply chains and accelerated its broader economic transformation.

Notably, Chinese enterprises have contributed to several major SEZs across the country. In Galang Batang Special Economic Zone, investments have focused on alumina processing, photovoltaic industries, and chemical manufacturing. Meanwhile, Kendal Special Economic Zone has developed into a critical hub for electric vehicle battery supply chains, and Gresik Special Economic Zone hosts large-scale projects such as Southeast Asia’s largest copper foil plant and one of the world’s largest glass manufacturing facilities. These developments illustrate how foreign investment—particularly from China—has supported Indonesia’s ambition to move up the global value chain.

From a policy perspective, the presence of Chinese investors reflects a high level of confidence in Indonesia’s economic prospects and demonstrates an alignment of strategic vision between the two countries in building competitive, export-oriented industries. This collaboration has positioned Indonesia more prominently within global production networks, particularly in sectors linked to the green economy and advanced manufacturing.

However, from a legal standpoint, the increasing reliance on foreign investment within SEZs also necessitates careful regulatory oversight. Indonesia’s legal framework already provides a strong foundation to ensure that such investments remain lawful and aligned with national interests. Law Number 39 of 2009 on Special Economic Zones establishes the legal basis for SEZ development, offering fiscal and non-fiscal incentives while maintaining regulatory control. Within this framework, all investors—including Chinese entities—must operate through legally recognized business structures, typically Foreign Investment Companies (PT PMA), and comply with applicable licensing requirements.

In addition, the implementation of the risk-based licensing system under Government Regulation Number 5 of 2021 ensures that business activities within SEZs are subject to appropriate levels of scrutiny based on their risk profile. High-risk industries, such as heavy manufacturing and energy-related projects, are required to meet stringent environmental standards, including mandatory Environmental Impact Assessments (AMDAL), as stipulated under Law Number 32 of 2009 on Environmental Protection and Management.

Equally important are labor and technology transfer obligations. Indonesian labor law mandates the prioritization of local workers and regulates the employment of foreign personnel, ensuring that investments contribute not only to capital inflows but also to human capital development. Furthermore, sector-specific regulations—particularly in mining, energy, and downstream industries—impose requirements for domestic processing, thereby preventing purely extractive economic activities.

The recent establishment of D-Hub Special Economic Zone under Government Regulation Number 38 of 2024 represents a forward-looking expansion of the SEZ model. By integrating education, healthcare, digital economy, and creative industries, this new zone reflects Indonesia’s intention to diversify beyond resource-based sectors and foster innovation-driven growth. It also opens new avenues for foreign investors, including those from China, to participate in high-value, knowledge-based industries.

In conclusion, the involvement of Chinese investors in Indonesia’s SEZs is both legally permissible and economically beneficial, provided that all regulatory requirements are strictly observed. The existing legal framework is sufficiently robust to accommodate foreign investment while safeguarding national interests. Nevertheless, the key challenge lies in consistent enforcement and governance. Without effective oversight, there remains a risk of regulatory circumvention, environmental degradation, and unequal economic benefits.

Therefore, the Indonesian government must continue to balance its dual role as an investment facilitator and a sovereign regulator. Ensuring legal compliance, strengthening institutional capacity, and maintaining transparency will be essential to maximizing the long-term benefits of SEZ development and sustaining Indonesia’s trajectory toward an advanced and competitive economy.

By : K&Co. - May 5, 2026

Increase in Chinese Investment in Indonesia in 2026

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

  

The significant rise of Chinese investment in Indonesia in the first quarter of 2026 reflects an important shift in the country’s economic landscape, particularly in relation to industrial downstreaming and structural transformation. With investment reaching approximately USD 2.2 billion and growing by 22% year-on-year, Indonesia is increasingly positioned as a strategic destination for foreign direct investment, especially from China.

From an economic standpoint, this influx of capital offers substantial benefits, including the expansion of domestic industrial capacity, job creation, and the acceleration of technology transfer. Notably, the concentration of investment in downstream sectors aligns with the Indonesian government’s policy to enhance the added value of natural resources and reduce reliance on raw material exports.

However, from a legal and public policy perspective, the surge of foreign investment at this scale also raises several strategic concerns. These include the potential dominance of foreign entities in critical sectors, imbalances in bargaining power between foreign investors and domestic businesses, and risks related to environmental protection and labor standards. Accordingly, the effectiveness of Indonesia’s legal framework and its enforcement mechanisms becomes a determining factor in ensuring that such investments deliver sustainable and equitable outcomes.

Normatively, Indonesia has established a comprehensive legal framework to ensure that investment activities are conducted lawfully and in an orderly manner. Law Number 25 of 2007 on Investment serves as the primary legal foundation, guaranteeing legal certainty, equal treatment, and the obligation for investors to undertake corporate social responsibility. In practice, foreign investors are required to establish a legal entity in the form of a Foreign Investment Limited Liability Company (PT PMA), thereby subjecting their operations to Indonesian law.

Furthermore, the risk-based business licensing regime, as regulated under Government Regulation Number 5 of 2021, has streamlined the licensing process while maintaining regulatory oversight. All business actors must obtain a Business Identification Number (NIB) and relevant operational licenses based on the level of risk associated with their activities. For high-risk sectors such as industrial downstreaming, compliance with Environmental Impact Assessment (AMDAL) requirements is mandatory to mitigate environmental harm.

In strategic sectors such as mining and energy, Indonesian regulations impose obligations for domestic processing and refining, ensuring that investments contribute to value-added production rather than merely extractive activities. In addition, labor laws require prioritization of local workforce employment and regulate the use of foreign workers, including mandatory provisions for knowledge and technology transfer.

Regulatory reforms introduced under Law Number 6 of 2023 on Job Creation have further strengthened Indonesia’s investment climate by simplifying business procedures and expanding access for foreign investors. Nevertheless, such facilitation must be balanced with robust supervision to safeguard national interests.

In conclusion, the increase in Chinese investment in Indonesia is legally permissible and legitimate, provided that all regulatory requirements—ranging from corporate establishment and licensing to sectoral compliance, environmental protection, and labor obligations—are duly fulfilled. The primary challenge lies not in the absence of legal norms, but in the consistency of their implementation and enforcement.

In this regard, the state must act not only as a facilitator of investment but also as a firm and sovereign regulator. Striking a balance between attracting foreign capital and protecting national interests is essential to ensure that such investments contribute meaningfully to Indonesia’s long-term and sustainable economic development.

By : K&Co. - May 5, 2026

Battery Ecosystem and Electric Vehicles : The New Wave of Chinese Investment in Indonesia

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The global transition toward clean energy has accelerated the development of the electric vehicle (EV) industry. In this context, Indonesia has emerged as a strategic hub, primarily due to its abundant nickel reserves—an essential component in lithium battery production. Consequently, the battery ecosystem and electric vehicle sector has become one of the most rapidly growing and “booming” areas of investment, particularly from Chinese investors.

A clear indication of this trend is the emergence of large-scale lithium battery projects, with investment values reaching approximately US$6 billion. This substantial figure reflects the strategic importance of Indonesia within the global EV supply chain. These investments are not isolated initiatives but are part of broader Indonesia–China cooperation frameworks that integrate multiple stages of production.

Such cooperation encompasses three key components: nickel mining, cathode production, and battery cell manufacturing. At the upstream level, Indonesia supplies raw materials through its extensive nickel mining operations. At the intermediate stage, nickel is processed into cathode materials, which are critical in determining battery performance. Finally, at the downstream level, battery cells are manufactured as the core technology powering electric vehicles.

This integrated approach reflects a vertical integration strategy, whereby investors do not merely provide capital but also exercise control over technology, production processes, and global distribution networks. This model offers significant competitive advantages in an increasingly competitive global EV market.

From Indonesia’s perspective, the development of a battery and EV ecosystem presents substantial opportunities for national industrialization. It enhances the value-added potential of natural resources, creates employment, and facilitates technology transfer, thereby strengthening Indonesia’s position in the global industrial landscape. However, this rapid development also raises important challenges, including the need for adaptive regulatory frameworks, environmental protection, and the necessity of maintaining a balanced relationship between national interests and foreign investment.

In conclusion, the battery ecosystem and electric vehicle sector represent not merely a passing trend but a foundational pillar for Indonesia’s future industrial development. With proper governance and strategic management, this sector holds the potential to drive Indonesia’s transformation into a key player in technology-driven and sustainable energy industries.

By : K&Co. - May 5, 2026

How Corruption Evolves: Fear, Power, and Administrative Manipulation

By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The case revealed by the Komisi Pemberantasan Korupsi regarding alleged extortion involving the Regent of Tulungagung highlights how corrupt practices continue to evolve in form. It is no longer limited to conventional bribery or illicit payments, but has shifted into more structured and psychologically coercive methods. 

One of the most striking elements is the modus operandi used. Several local officials were reportedly asked to sign undated resignation letters. At first glance, these documents appear to be routine administrative paperwork. In practice, however, they function as tools of pressure. The letters can be activated at any time to remove officials deemed disobedient, creating a constant sense of insecurity within the bureaucracy.

This situation goes beyond a simple violation of law. When official documents are repurposed as instruments of intimidation, the fundamental role of bureaucracy is undermined. Instead of being guided by rules and professional standards, the system becomes driven by fear and personal control. Civil servants are no longer able to act independently, as their positions depend heavily on the discretion of those in power.

The broader consequence of such a practice is institutional damage. Officials working under persistent pressure may feel compelled to comply with unethical demands simply to protect their positions. In many cases, this kind of coercion can trigger a chain reaction of further corruption. Funds extracted through pressure may later be compensated through budget manipulation or other forms of abuse of authority.

Another important point is that this pattern has been described as a new finding. This suggests that similar methods may not have been widely detected before and could potentially exist in other regions. If left unaddressed, this approach could spread and become a replicated model of corruption. In this sense, corruption is not only persisting but also adapting to exploit gaps within the system.

The continuation of such practices over a period of time also indicates weaknesses in internal oversight mechanisms. While it is true that the officials involved may have been under significant pressure, the lack of safe and effective reporting channels worsens the situation. Without adequate protection, the willingness to report misconduct remains extremely limited.

This case also reflects the ongoing challenges in bureaucratic reform, particularly in relation to power dynamics. As long as official positions are used as tools of control rather than public responsibility, the risk of abuse will remain. Regulatory changes alone are insufficient if they are not accompanied by deeper cultural and institutional improvements.

The enforcement actions taken by the Komisi Pemberantasan Korupsi are certainly important, but they should not stand alone. Preventive measures need to be strengthened, including improving civil service systems, increasing transparency, and ensuring strong protection for whistleblowers. Without these steps, similar cases are likely to reappear in different forms.

Ultimately, this case serves as a reminder that corruption is highly adaptive. When one loophole is closed, others tend to emerge. Therefore, anti-corruption efforts must also evolve continuously—not only through law enforcement, but also by building systems that minimize opportunities for abuse from the outset.

Indonesia can’t afford to repeat.

By : K&Co - April 28, 2026

Balancing Power and Prudence in Indonesia’s Financial Landscape

By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The recent policy move by Finance Minister Purbaya Yudhi Sadewa to revise regulations on state receivables, along with his warning to younger generations about stock investing, reflects a clear underlying theme: the government aims to strengthen asset management while encouraging society, especially Gen Z, to become more financially responsible.

The revision under PMK No. 23 of 2026 represents a relatively progressive step. The state is now allowed to directly take control of seized assets and utilize them without going through lengthy auction procedures. These assets even include modern instruments such as stocks and cryptocurrencies, signaling that the government is adapting to the realities of a digital economy.

From an efficiency standpoint, this policy deserves recognition. Previously, the settlement of state receivables was often delayed by bureaucratic processes, causing asset values to deteriorate over time. With this new mechanism, the government gains greater flexibility to immediately optimize assets for public benefit. In a rapidly changing economic environment, such flexibility could significantly improve state financial management.

However, this expanded authority must be carefully monitored. Granting the state the power to directly seize and utilize assets carries potential risks of misuse if not accompanied by strong transparency and accountability measures. The “as is” principle, which requires recipients to accept assets in their current condition, may also create new complications, particularly if the assets have underlying legal or technical issues. In this sense, regulatory reform must go hand in hand with stronger oversight.

On another front, Purbaya’s message to Gen Z about stock investing is highly relevant in today’s context. A significant portion of capital market investors in Indonesia now comes from younger generations, indicating growing enthusiasm for investing. However, this surge in participation is not always matched by adequate financial literacy.

The reminder that investing is not a shortcut to instant wealth is particularly important. Many young investors are drawn into the allure of quick profits without fully understanding the inherent risks of the market. The principle of “high risk, high return” is not merely a slogan—it is a reality that is often underestimated. Encouraging young people to learn before they invest is therefore a rational and necessary approach.

Initiatives such as mutual fund investment programs that promote gradual investment strategies also offer practical solutions. Methods like dollar-cost averaging can help beginner investors manage risk and avoid the pressure of market timing. More importantly, they foster a long-term investment mindset rather than short-term speculation.

Looking at the bigger picture, these two issues are closely interconnected. On one hand, the government is working to strengthen public financial management. On the other, individuals, particularly young people—are being urged to take greater responsibility for their personal finances. Together, they reflect a broader economic direction aimed at building a more stable and resilient system at both macro and micro levels.

That said, significant challenges remain. Financial literacy in Indonesia is still relatively low, even as access to investment platforms becomes increasingly easy through technology. Without proper education, this accessibility could backfire, leading young investors to make impulsive and potentially harmful financial decisions.

Therefore, government efforts should not stop at issuing regulations and public warnings. Financial education must be expanded systematically, from schools to digital platforms. Only then can these policies translate into meaningful, long-term impact.

Ultimately, the success of these initiatives will depend on two key factors: integrity in implementation and the readiness of society to respond wisely. Without both, regulatory changes risk becoming mere formalities, and warnings to Gen Z may simply go unheeded.

By : K&Co - April 28, 2026

Electric Vehicles Without Tax Incentives: Are They Still Relevant?

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The government’s decision to end full tax exemptions for electric vehicles starting in 2026 marks a new phase in Indonesia’s EV journey. While incentives once played a central role in attracting consumers, the public is now faced with a more fundamental question: can electric vehicles remain relevant without such support?

In recent years, EVs have been positioned as the future of transportation. They offer environmental benefits and lower operating costs, making them an appealing alternative to conventional vehicles. Tax incentives, however, have been a key driver in accelerating their adoption. With these incentives being reduced, that appeal is now being tested.

From a consumer perspective, the impact is immediate. The relatively higher upfront price of electric vehicles compared to gasoline cars becomes more noticeable. Additional costs—such as registration fees and annual taxes—further complicate the decision-making process. As a result, switching to EVs is no longer as straightforward as it once seemed.

That said, evaluating EVs solely based on initial cost provides an incomplete picture. Their main advantage lies in long-term efficiency. Electricity is generally more affordable than fossil fuels, and EVs require less maintenance due to fewer moving parts. The absence of routine oil changes and reduced wear on components contribute to lower ownership costs over time.

In the long run, these savings can offset the higher purchase price. In this sense, electric vehicles still hold strong economic value, particularly for consumers who plan to use their cars over an extended period.

However, financial considerations are only part of the equation. Infrastructure readiness and user convenience are equally important. At present, the availability of public charging stations in Indonesia remains uneven. For individuals with high mobility needs or those living in areas with limited electricity access, this presents a significant challenge.

In contrast, gasoline-powered vehicles continue to offer unmatched practicality. Refueling infrastructure is widespread, and the process itself is quick and familiar. For many consumers, this reliability remains a decisive factor.

Nevertheless, EVs retain certain non-financial advantages. In some cities, they are exempt from traffic restrictions such as odd-even license plate policies. Additionally, they offer a quieter and smoother driving experience, which enhances overall comfort.

The reduction of tax incentives may signal the government’s intention to encourage a more self-sustaining EV market. However, questions arise regarding the timing of this policy. With infrastructure still developing and vehicle prices relatively high, scaling back incentives could risk slowing adoption.

Therefore, a balanced approach is needed. Strengthening market independence should go hand in hand with continued policy support, particularly in infrastructure development and regulatory adaptation.

Ultimately, the relevance of electric vehicles is not determined by tax incentives alone. It depends on the readiness of the broader ecosystem—ranging from infrastructure and pricing to public acceptance.

Without comprehensive support, the transition to electric mobility may progress more slowly than anticipated. However, with the right policies in place, EVs still have the potential to play a significant role in Indonesia’s transportation future.

By : K&Co - April 27, 2026

When Innovation Finds a Home Elsewhere: The Bobibos Story

By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The news that Bobibos has reached around 70 percent readiness for mass production in Timor Leste is both exciting and a little bittersweet. It’s exciting because it shows real progress in renewable energy innovation. But it’s also hard to ignore the irony: this is an innovation tied closely to Indonesia’s resources and context, yet it’s being scaled up in another country.

For context, Bobibos is an alternative fuel made from rice straw—an agricultural byproduct that is abundant in countries like Indonesia. Instead of being burned or wasted, this material can be processed into a cleaner, more affordable energy source. On paper, it sounds like a perfect fit. Indonesia has vast rice fields, tons of unused straw, and an increasing need for sustainable energy solutions. It checks all the boxes.

So why isn’t it being developed at scale in Indonesia?

One of the main reasons lies in regulation. Despite its potential, rice straw hasn’t been formally recognized as a bioenergy resource within Indonesia’s regulatory framework. That creates a kind of limbo situation: the technology exists, the raw materials are available, but there’s no clear legal pathway to fully develop and commercialize it. It’s like having a product ready to sell but no permit to open the store.

Meanwhile, Timor Leste has taken a much more proactive approach. Instead of waiting for perfect conditions, they’ve embraced the opportunity. The government has reportedly provided land and support for production facilities, signaling a willingness to experiment and invest in new energy solutions. For a smaller nation, this is a bold move—and it’s already paying off.

This contrast highlights a broader difference in mindset. Indonesia tends to be more cautious, especially in sectors like energy where safety, reliability, and economic stability are critical. That caution is understandable. Poorly regulated energy solutions can lead to serious consequences. But there’s also a downside: moving too slowly can mean missing out on valuable opportunities.

Timor Leste, on the other hand, appears more willing to take calculated risks. They see Bobibos not just as an experiment, but as a chance to reduce dependence on imported fuels and strengthen their domestic energy sector. In a rapidly changing global energy landscape, that kind of decisiveness can make a big difference.

What makes this situation even more interesting is that it’s not an isolated case. There have been multiple instances where innovations connected to Indonesia gain traction abroad first. This suggests that the challenge isn’t just about technology—it’s about the ecosystem surrounding it. Innovation needs more than good ideas; it needs supportive policies, funding, and the courage to act.

That said, Indonesia’s cautious approach isn’t entirely misplaced. Energy is a high-stakes sector. Any new technology must go through rigorous testing, certification, and evaluation before being widely adopted. The real challenge is finding the right balance between caution and agility.

In that sense, Bobibos being developed in Timor Leste could actually work as a strategic stepping stone. If the project succeeds there, it can serve as proof of concept. Success abroad often builds credibility at home. It may even encourage Indonesian policymakers to revisit existing regulations and consider integrating this innovation into the national energy mix.

Ultimately, this story is about more than just one type of fuel. It’s about how countries respond to innovation. Indonesia has all the necessary ingredients—natural resources, talent, and market demand. What’s needed now is a more adaptive and responsive policy environment.

Otherwise, the same pattern will continue: great ideas will be born locally, but they’ll grow and thrive somewhere else. And that’s a missed opportunity Indonesia can’t afford to repeat.

By : K&Co - April 27, 2026

When Criticism Meets the Law: A Test of Democracy in Indonesia

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The recent reports of academics being reported to the police for criticizing the government have sparked renewed debate about freedom of expression in Indonesia. In response, Yusril Ihza Mahendra stated that academics are free to express criticism. At first glance, this sounds reassuring. However, the reality is more complicated than it seems.

In principle, criticism from academics is not only normal but necessary. Academics rely on data, research, and critical thinking to evaluate public policies. Their role is to question, analyze, and, when needed, challenge the government’s decisions. Without this kind of input, policies risk becoming one-sided and less effective. In this sense, criticism is not an attack—it is a contribution.

The problem arises when such criticism leads to police reports. While Yusril emphasized that criticism is allowed, he also acknowledged that anyone has the right to file a report. Law enforcement authorities, in turn, are obligated to follow up on these reports, at least at an initial stage. This creates a gray area: criticism is legally protected, yet it can still trigger legal processes.

This situation can discourage people from speaking out. Even if someone is ultimately proven innocent, being involved in a legal process can be stressful, time-consuming, and intimidating. As a result, many may choose to stay silent rather than take the risk. This phenomenon is often referred to as a “chilling effect,” where fear limits open expression.

In a democratic society, criticism should be seen as a healthy and essential element. Governments benefit from feedback, especially when it is constructive and evidence-based. Without criticism, there is a risk that those in power may become less responsive or even dismissive of public concerns.

That said, freedom of expression does not mean absolute freedom without limits. Criticism should be grounded in facts, delivered responsibly, and should not incite hatred or violence. Clear boundaries are necessary, but they must also be applied fairly and consistently, without being used to silence legitimate voices.

In my view, ethical mechanisms should come before legal ones. If an academic is accused of wrongdoing, the issue should first be examined through institutional or professional channels, such as universities or academic bodies. Legal action, especially criminal prosecution, should be the last resort—not the default response.

Yusril’s statement reflects an attempt to balance two important principles: protecting freedom of expression while respecting the rule of law. However, the real challenge lies in how these principles are implemented. If reports against critics are too easily processed without careful consideration, the promise of freedom may feel hollow.

Ultimately, this issue highlights an important question for Indonesia’s democracy: Is criticism truly accepted as part of a healthy political system, or is it still viewed as a threat? The answer will shape not only the future of academic freedom but also the broader landscape of civil liberties in the country.

A strong democracy is not one that avoids criticism, but one that can handle it with openness and maturity.

By : K&Co - April 23, 2026

Rupiah Weakens to Rp17,300: What Does It Mean for Us?

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The rupiah weakening to Rp17,300 per US dollar is not just a number in economic news. It is a sign that the economy is under pressure. In the report, Airlangga Hartarto stated that the government is continuing to monitor the situation and emphasized that this weakening is also happening in many other countries. While this is true, it still needs to be understood more carefully.

Globally, the economic situation is indeed unstable. Conflicts in several regions, rising global oil prices, and a stronger US dollar have put pressure on many currencies, including the rupiah. When oil prices increase, Indonesia has to spend more on energy imports. This puts additional pressure on the rupiah.

However, it is not enough to simply say that all countries are experiencing the same thing. In reality, some countries’ currencies have not weakened as much as Indonesia’s. This means that, besides global factors, there are also domestic issues that need attention.

One of the main problems is Indonesia’s heavy reliance on energy imports, especially oil. When global oil prices rise, the impact is immediately felt in the economy. Government spending increases, which in turn adds pressure on the currency. This is not a new issue, but it has yet to be properly resolved.

The weakening rupiah also directly affects everyday people. Imported goods become more expensive, which can lead to higher prices overall. When prices rise, people’s purchasing power declines. Over time, this can slow down economic growth and make daily life more difficult.

On the other hand, the government maintains that Indonesia’s economic fundamentals remain strong. Inflation is relatively under control, and economic growth continues. This is important to maintain public and investor confidence. However, statements alone are not enough without clear and concrete actions.

In our view, a response that focuses only on “monitoring” the situation feels insufficient. People need clarity about what steps will be taken. For example, how the government plans to reduce dependence on energy imports or how it will keep prices stable.

Transparency is also important. The government should communicate openly about the real situation, including potential risks ahead. This would help the public and businesses prepare better and avoid the impression that the issue is being underestimated.

The weakening of the rupiah should serve as a reminder that Indonesia needs to strengthen its economic independence. The country cannot continue to rely heavily on global conditions. Concrete efforts are needed to strengthen domestic production, especially in the energy sector.

In conclusion, what Airlangga Hartarto said may sound reassuring, but it should not make us complacent. This is a real issue with real impacts on people’s lives. If not handled seriously, the weakening rupiah could become a bigger problem in the future, rather than just a temporary fluctuation.

By : K&C - April 23, 2026

Rising Oil Prices and What It Means for Us

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The recent 3 percent increase in global oil prices, driven by tensions between Iran and the Amerika Serikat, highlights how unstable the global situation currently is. While a 3 percent rise may seem small at first glance, its impact can be significant—especially for countries that still rely on imported oil, such as Indonesia.

This increase is not only caused by actual disruptions in oil supply, but also by market concerns. Whenever tensions rise in the Middle East, global markets tend to react quickly. There is a strong fear that key oil distribution routes could be disrupted, particularly the Selat Hormuz, one of the most important oil shipping lanes in the world. If this route were to be blocked or disturbed, global oil supply could drop sharply, pushing prices even higher.

This situation shows that oil prices are heavily influenced by political conditions, not just economic factors. As long as the world remains dependent on oil, conflicts in certain regions will continue to have wide-reaching effects. Even relatively small tensions can trigger immediate price increases.

For Indonesia, this is a situation that requires serious attention. As a country that still imports a portion of its oil needs, rising global prices will be felt directly. The government may face increased pressure to keep fuel prices stable. Otherwise, higher fuel prices could lead to broader increases in the cost of goods and services.

The impact does not stop there. Rising oil prices usually lead to higher transportation costs. When transportation becomes more expensive, the prices of basic goods often follow. In the end, it is the public—especially lower- and middle-income groups—who bear the greatest burden.

This pattern is not new. Almost every time there is conflict in the Middle East, oil prices rise. This reflects a deeper issue: the global energy system still depends heavily on regions that are politically unstable. This dependency makes the global economy vulnerable.

Therefore, this situation should serve as an important reminder for Indonesia. The country cannot continue to rely heavily on imported oil. Concrete steps are needed to reduce this dependence, such as developing alternative energy sources like solar, wind, and geothermal power.

In addition, improving energy efficiency is just as important. People can start with simple actions, such as reducing the use of private vehicles or using energy more wisely. Lower consumption can help reduce the impact of global price increases.

From the government’s side, energy policies need to be more forward-looking and decisive. It is not enough to respond only when prices rise; there must be long-term strategies to minimize future risks.

In conclusion, the rise in oil prices is not just a routine economic issue. It is a signal of global uncertainty that directly affects countries like Indonesia. Without proper anticipation and action, the impact could become more severe. That is why both the government and society need to adapt and work toward reducing dependence on unpredictable global conditions.

By : K&Co - April 22, 2026

Refusing Debt Is Bold, but Caution Still Matters

By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The decision by Purbaya Yudhi Sadewa to reject loan offers from the International Monetary Fund (IMF) and the World Bank has drawn attention. The government argues that Indonesia’s fiscal condition is still strong, so there is no urgent need to take on additional debt.

At a basic level, this decision sounds positive. It suggests that Indonesia is still capable of funding its needs without relying on foreign loans. This can be seen as a sign that the country’s financial situation is stable, even as global conditions remain uncertain.

Refusing debt can also be a wise move. Loans are never truly free—they must be repaid, often with interest. If the funds are not urgently needed, taking on new debt could simply create a heavier burden in the future. By declining these offers, the government is trying to keep the country’s finances under control.

This decision may also boost national confidence. Indonesia appears to be signaling that it does not always need support from international institutions like the IMF or World Bank. This is important, especially considering that in the past, many countries faced serious problems due to excessive reliance on foreign debt.

However, this decision should also be viewed with caution. The global economic situation is still unstable. Many factors can change quickly, such as geopolitical conflicts, rising energy prices, or a slowdown in the global economy.

Even if Indonesia’s fiscal condition is currently strong, it may not remain that way forever. In the event of a major crisis, government spending needs could rise suddenly. In such situations, external financing—including loans—can become an important tool to maintain economic stability.

This is where balance becomes crucial. Refusing debt is reasonable, but it should not mean closing all options. The government still needs to prepare backup plans in case conditions worsen. Being confident is good, but overconfidence can be risky if it leads to delayed responses during a crisis.

More importantly, the issue is not just about accepting or rejecting debt, but about how well the country manages its finances. If government spending is efficient and well-targeted, the need for borrowing can be minimized. On the other hand, poor financial management can turn even small amounts of debt into serious problems.

Looking ahead, the government should also focus on strengthening state revenue, such as through taxation and economic growth. This would help reduce dependence on borrowing in the long term. In conclusion, rejecting loan offers from the IMF and World Bank is a bold and generally positive step. However, given the uncertainty of the global situation, caution remains essential. Confidence is important, but it must be supported by careful planning and responsible financial management. 

By : K&Co - April 22, 2026

Indonesia Needs More Than Just Alternative Oil Imports

 By Kusnandar & Co., Attorneys At Law – Jakarta, Indonesia

The Indonesian government’s move to prepare alternative sources of oil imports amid the Middle East conflict is understandable and important. The Strait of Hormuz, a strategic global oil route, has always been a potential flashpoint. Any tension in this region can disrupt global oil supply and trigger domestic energy price surges. Redirecting some imports to countries like the United States or Brazil may reduce short-term risk, but this approach remains reactive rather than a long-term strategic solution.

Approximately 20–25% of Indonesia’s oil imports come from the Middle East. Even a brief disruption in supply from this region can significantly impact the national economy. Indonesia’s energy dependence is further compounded by limited domestic reserves, sufficient for only about three weeks of consumption. In other words, the country is teetering on a thin line between energy stability and a potential sudden crisis.

While diversifying import sources is crucial, it merely mitigates risk temporarily. Shifting reliance from one region to another does not address the underlying problem: Indonesia is still heavily dependent on imported fossil fuels. This strategy may also create new challenges, such as higher logistics costs and longer delivery times, which are ultimately passed on to consumers.

This situation should serve as a stark warning: energy resilience is not merely a matter of trade—it is a question of economic sovereignty. Countries that rely heavily on energy imports are always vulnerable to global market shocks. Therefore, the government must move its focus from short-term risk mitigation to more fundamental and sustainable strategies.

Urgent measures include boosting domestic oil production, expanding strategic energy reserves, and most importantly, accelerating the transition to renewable energy. Renewable energy is not only an environmental solution; in a global geopolitical context, it is also a form of national independence. Strengthening energy resilience allows Indonesia to withstand international disruptions without constantly depending on decisions made by other countries or facing oil price spikes that harm its population.

Furthermore, the global crisis should be treated as a catalyst for national energy reform. Policies that promote energy independence mean that Indonesia is not just “protected from global shocks” but also in control of its economic future. Energy security must be a cornerstone of economic and political stability, not merely a technical issue in crude oil trade.

In conclusion, preparing alternative oil import sources is both necessary and logical in the short term. However, this approach cannot stop there. Indonesia must take bolder steps, building energy independence through domestic diversification, strategic reserves, and a transition to clean energy. Only then will global geopolitical crises cease to be a direct threat to the people and the country’s economic stability.

Indonesia has the opportunity to turn a global challenge into a strategic advantage: not just surviving fluctuations in the world oil market, but leading a national energy transformation that is independent, resilient, and sustainable.

By : K&Co - March 16, 2026

Global Crises Call on Indonesia to Take Action

By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The recent meeting between President Prabowo Subianto and the Chief of the National Economic Council, Luhut Binsar Pandjaitan, underscores that global geopolitical uncertainty is no longer a distant issue for Indonesia’s economy. With the escalation of conflict in the Middle East causing energy price volatility and instability in global markets, Indonesia now faces tangible risks affecting energy security, fiscal stability, and government budgets.

That this meeting was called directly by the President is significant. It signals recognition that foreign conflicts—which may seem remote—can have immediate consequences for Indonesia, including surges in oil prices, disruptions to global supply chains, and pressures on the balance of payments and national budgets.

However, this meeting also raises a broader question: Is Indonesia truly prepared to withstand increasingly frequent global shocks? Heavy reliance on imported energy, limited strategic reserves, and vulnerability to international market fluctuations remain structural challenges that have been repeatedly noted but not fully resolved. Statements from President Prabowo assuring that domestic fuel and gas supplies are sufficient may provide short-term reassurance, but they do not change the reality that major geopolitical crises demand accelerated reforms in energy resilience and economic stability.

The focus on energy stability, oil pricing, and budget preparedness is pragmatic. Yet, it should also be a catalyst for Indonesia to reduce its dependence on global energy markets, boost domestic production, expand strategic reserves, and accelerate the transition to renewable energy. Dependence on imported oil not only weakens economic leverage but also exposes the country to heightened vulnerability amid escalating global geopolitical tensions.

Moreover, macroeconomic and fiscal policies must be designed to withstand external shocks. As other nations implement measures such as energy efficiency programs, demand management, and responsive monetary policies, Indonesia cannot afford to lag. Current geopolitical challenges should be viewed not merely as threats, but as a call to strengthen national resilience comprehensively.

Ultimately, the meeting between President Prabowo and Luhut is an important first step. But if responses remain limited to short-term preparedness, Indonesia will continue to react to crises rather than anticipate them. Strengthening energy resilience, diversifying the economy, and implementing bold fiscal reforms must be a long-term priority. Only with a comprehensive strategy can Indonesia ensure that global conflicts, like the ongoing turmoil in the Middle East, no longer shake the foundations of its national economy.

By : K&Co - March 16, 2026

The Search of the Ombudsman Office and the Test of Institutional Integrity

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The search of the office of the Ombudsman Republic Indonesia by investigators from the Kejaksaan Agung Republic Indonesia has drawn significant public attention. An institution known for supervising public services is now involved in a legal investigation. This situation raises questions among the public regarding the integrity of state institutions and the effectiveness of the existing oversight system.

The Ombudsman plays an important role in monitoring public services and handling public complaints related to maladministration by government institutions. Therefore, when this supervisory institution becomes part of a legal investigation, public trust may be affected. People may begin to question how an institution responsible for oversight could become involved in a law enforcement process.

However, the action taken by the Attorney General’s Office can also be seen as a demonstration of law enforcement that does not discriminate. In a state governed by the rule of law, no institution or individual is above the law. If there are allegations that certain parties are involved in a case, investigators have the authority to conduct searches and examinations to uncover the facts.

This case also highlights that the fight against corruption in Indonesia remains complex. Corruption often involves broad networks that may include private actors as well as public institutions. In such situations, law enforcement agencies must work professionally, transparently, and based on strong evidence so that the legal process can proceed fairly and without creating unnecessary speculation in society.

At the same time, the public should observe this case objectively while upholding the principle of the presumption of innocence. Legal processes must be allowed to run their course without excessive pressure or premature conclusions. If violations of the law are proven, those responsible must be held accountable according to existing regulations. Conversely, if no sufficient evidence is found, the reputation of the institution concerned should be restored.

This incident should serve as a moment of reflection for all state institutions to strengthen their internal integrity systems. Transparency, accountability, and ethical standards among public officials must remain priorities in carrying out governmental duties. By doing so, public trust in state institutions can be maintained.

Ultimately, strengthening institutional integrity is essential to building clean and credible governance. Public trust is a fundamental asset for ensuring that oversight, public service, and law enforcement functions operate effectively in Indonesia. Without that trust, efforts to create good governance will be difficult to achieve.

By : K&Co - March 9, 2026

Alert Status 1 and the Test of Civilian Supremacy in Indonesia

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The recent instruction by the Indonesian Armed Forces (TNI) leadership to enter Alert Status 1 has sparked a serious public debate. Civil society organizations argue that this policy is not only procedurally problematic but may also contradict constitutional principles. This criticism should not be dismissed as mere political polemic; rather, it serves as an important reminder about the relationship between the military, the state, and democracy in Indonesia.

The Civil Society Coalition for Security Sector Reform considers the instruction inconsistent with the constitution because military deployment is fundamentally under the authority of the President, as the highest commander of the Army, Navy, and Air Force, according to the 1945 Constitution. They also cite Law No. 34 of 2004 on the TNI, which stipulates that decisions regarding military deployment are vested in the President, not the TNI Commander.

From a state‑administration perspective, this criticism has solid grounding. In a modern democracy, the military must be under civilian oversight. Civilian supremacy is not only about formal command but also about accountability and political legitimacy. When decisions that could mobilize military forces are made without clear communication from the highest civilian authority, public concern is entirely understandable.

Furthermore, the civil society coalition questioned the urgency of declaring Alert Status 1. According to them, the current national security situation is still under the control of civilian government and law enforcement agencies, and there is no immediate threat to national sovereignty requiring widespread military mobilization.

The question of urgency is crucial. Alert Status 1 represents the highest level of military readiness, meaning troops and equipment are fully prepared for deployment. Without transparent explanations, this policy leaves room for speculation. In a democratic state, sensitive security policies require clear public communication to avoid unnecessary fear or suspicion.

Indonesia’s historical experience with military dominance in politics during the New Order era makes this issue particularly sensitive. The 1998 Reformasi period marked a major shift, separating military roles from civilian affairs and emphasizing TNI professionalism as a national defense institution. Any policy that blurs the line between military and civilian authority naturally triggers public sensitivity.

These concerns are not baseless. In recent years, debates about the TNI’s involvement in civilian roles and non‑combat operations have resurfaced, raising fears that security sector reform is not fully entrenched.

Nevertheless, civil society criticism should not be interpreted as being anti-military. On the contrary, such scrutiny is a vital mechanism in democracy to ensure that the military remains professional and operates within constitutional boundaries. A strong military in a democracy is not one above civilian control, but one whose legitimacy stems from adherence to law and democratic principles.

Ultimately, this controversy highlights the importance of transparency and public communication by both the government and the TNI. Clear explanations regarding the reasons, objectives, and legal basis for Alert Status 1 are necessary to prevent misunderstandings.

If managed well, this debate could strengthen Indonesia’s democracy. Civil society oversight, open government response, and adherence to the constitution form the foundation to ensure that the relationship between the military and the state remains firmly within democratic norms.

By : K&Co - March 9, 2026