Where has Indonesia’s optimism gone?

Indonesia’s diplomacy is purposeful. It is not reactive or trend-driven but adaptive. It continues to evolve as the world around it becomes increasingly complex. In a time when global politics is marked by growing competition and distrust, every change in tone or activism can easily be seen as inconsistency.

For a country navigating shifting power centres, remaining stagnant is not an option. Adaptability is no longer a luxury; it is a necessity.

Indonesia’s foreign policy has long been anchored in the idea of politik luar negeri bebas aktif, an independent and active diplomacy that values both sovereignty and engagement. What we see today is not a departure from that principle but its renewal, an effort to stay true to old ideals while adapting to a changing international environment.

The central tenet of Indonesia’s foreign policy remains the same: peace, equality, and sovereignty. The only thing that has changed is the context.

Not taking advantage of others, but adapting

Commentators, such as Virdika Rizky Utama writing in The Interpreter last month, view Indonesia’s increased participation in international groups such as BRICS and the OECD as opportunistic. In fact, it reflects strategic adaptation, not opportunism. It shows an awareness that the world no longer fixated on a single axis of power. Engaging with multiple frameworks does not mean choosing sides; it means keeping alternatives open and dialogue alive. In a time when cooperation is weak and marked with division, countries that build bridges rather than walls are the ones keeping diplomacy alive.

Jakarta’s active role in various arenas shows that it seeks to connect different worlds, the Global North and South, advanced and developing economies alike. This is not diplomacy based on convenience or short-term deals. It is about building relationships, finding common ground, and preserving space for dialogue when everything else appears uncertain.

Indonesia’s posture as a democratic middle power enables it to engage with all partners without losing its direction. Neutrality has never meant silence.

Maintaining positive ties with China, the United States, France, and other partners is not inconsistency; it is balance. Indonesia’s history and geography have always demanded such balance: being open to all but dependent on none. That flexibility has shielded the country from binding alliances, enabled it to speak for the developing world, and made ASEAN’s position genuinely relevant rather than merely symbolic.

Strong, but quiet

Megaphone diplomacy is not always a measure of leadership. Indonesia’s diplomats have long understood that quiet persistence can be more powerful than loud posturing.

Jakarta’s approach to issues such as the conflict in Gaza, recognition of the State of Palestine in the United Nations, Myanmar, or the South China Sea is rarely dramatic. It seldom opts for confrontation. Instead, it usually serves as a friendly host, bringing various parties together to keep things calm and civil, and not letting talks die even when others have given up.

President Prabowo Subianto’s recent travels, from Beijing and New York to Cairo, fit the same pattern. These trips are not designed to signal restlessness, but commitment. His focus on balanced independence and humanitarian priorities reflects the belief that morality and practicality are not adversaries but partners in pursuing peace.

Indonesia has worked on this balance of restraint and commitment for decades. Silence, in this context, carries power. This diplomacy does not seek to be praised but earns respect through steadiness, as it believes that enduring influence lasts longer than fleeting attention.

Continuity in action

Indonesia’s foreign policy remains grounded in strong institutions. The Ministry of Foreign Affairs continues to work closely with the presidency to ensure that long-term priorities align with daily action. Indeed, the tempo of diplomacy has altered, and therefore foreign policy communities and observers must keep up.

In a world where information travels instantly and reactions are immediate, being visible is now as important as what is being said. Adapting to that rhythm does not mean losing depth; it means being more deliberate and transparent about it.

This evolution does not make diplomacy more personal; rather, it reflects confidence. Indonesia’s posture as a democratic middle power enables it to engage with all partners without losing its direction. Neutrality has never meant silence—it means composure when others rush to take sides and consistency when the world around it grows impatient. Continuity and change are not contradictions; they strengthen one another.

Indonesia’s diplomatic style remains methodical, professional, and low-key—qualities that provide the stability needed to embrace change.

A steady compass when things are unclear

Indonesia charts its own course, guided by freedom, fairness, and a strong sense of duty. This narrative recounts a nation that endured colonial oppression, aided many nations in their struggles for freedom, and now, draws on that moral legacy to work for a more just world order.

As competition intensifies and trust declines, the most valuable diplomatic skills are not military power or eloquence, but the ability to listen, mediate, and connect. Not many countries understand and practice this as effectively as Indonesia. Its diplomacy is not about dominance and being at the top, but about being relevance by keeping communication open when many doors are closing.

Therefore, the true question is not where Indonesia stands, but what it stands for. The answer remains the same: peace, equality, and the conviction that diplomacy works best when it brings nations and people together rather than pulling them apart.

The views and opinions expressed in this article are those of the author in his personal capacity and do not necessarily reflect the official position of the Government of Indonesia or any affiliated institution.

It was a tableau of 21st century power. Under the chandeliers of the Great Hall of the People, Indonesia’s President Prabowo Subianto stood beside China’s Xi Jinping and Russia’s Vladimir Putin as cameras flashed. Prabowo’s firm handshake and soldierly stance stood out amid the technocratic calm of his hosts.

Weeks later, he appeared at the United Nations General Assembly, his voice rising and falling with a general’s cadence as he spoke of “balanced independence.” Outside, protesters rallied over Gaza.

Days later in Cairo, Prabowo joined the Gaza peace summit in Egypt’s Sharm El Sheikh, calling for “humanitarian balance” while steering clear of the word occupation. Indonesia’s foreign minister, Sugiono, later said that Prabowo was seen internationally as a “global peace-maker”, a phrase that framed the moment as triumph rather than tension.

The three scenes in Beijing, New York, and Cairo traced the choreography of Prabowo’s diplomacy, visible and restless, everywhere at once, yet anchored nowhere.

Prabowo’s first year in office has tested how far Indonesia can stretch its diplomacy before losing coherence. The country’s foreign policy now operates in a volatile environment where great-power rivalries have hardened, the regional order has fragmented, and middle powers are struggling to define their agency. Indonesia has answered this uncertainty not with doctrine but with activism that seeks advantage wherever it can be found. The question is whether this opportunism represents adaptation or drift.

Jakarta’s conduct shows a steady replacement of principle with transaction. Indonesia has chosen participation over persuasion by joining BRICS while applying for OECD membership. Each move brings tactical flexibility, but together they reveal an absence of hierarchy among goals. Diplomacy has become a search for position rather than purpose.

This recalibration is clearest in relations with major powers. Prabowo’s decision to visit China first was not mere scheduling but a deliberate signal of alignment. He then attended Beijing’s military parade on 3 September, commemorating the 80th anniversary of Japan’s defeat, an event heavy with historical symbolism and contemporary power projection. Beijing’s role as Indonesia’s main investor and trading partner now outweighs ASEAN’s symbolic centrality. Engagement with Washington continues but is increasingly commercial, focused on defence sales and tariff deals rather than strategic dialogue. The United States remains a partner of necessity, not of vision.

Indonesia now practices selective alignment, building partnerships issue by issue and shifting with material interest. In defence, it turns to France for prestige procurement, while in infrastructure, it looks to China for capital. In multilateral arenas, it speaks of inclusivity but rarely defines what that means. The pattern fits an era of multipolar bargaining but departs from Indonesia’s earlier identity as a mediating middle power.

Partners struggle to read Jakarta’s intentions because they depend on the president’s shifting calculus rather than stable commitments.

This pragmatism has most sharply affected regional diplomacy. ASEAN, once Indonesia’s anchor, now serves mainly as a ceremony. Prabowo’s government participates but rarely leads. Crises, from Myanmar’s civil war to South China Sea tensions, proceed without Indonesian initiative. Leadership has been replaced by attendance and consensus by convenience. Neighbours quietly adjust, hedging their bets rather than waiting for Jakarta’s direction.

The Gaza episode revealed a deeper uncertainty. Indonesia now struggles to connect its moral language with strategic intent. Once a consistent advocate for justice and decolonisation, with the moral authority that came from non-alignment, it has retreated into cautious neutrality, seeking safety in balance rather than leadership through conviction.

Behind these choices lies a structural change within government. The foreign ministry, once the guardian of professional diplomacy, has been overshadowed by the presidency. Policy direction now flows from the palace, shaped by a small circle of advisers. Indonesia’s external behaviour reflects personal preference more than institutional planning. Prabowo’s foreign policy is not incoherent by accident but by design. It concentrates authority in one office and measures success through visibility rather than results.

Supporters call this efficiency, arguing that a strong presidency ensures unity of voice in a competitive region. Yet partners struggle to read Jakarta’s intentions because they depend on the president’s shifting calculus rather than stable commitments. Influence built on charisma fades when attention moves elsewhere, but confidence in diplomacy grows through predictability, not surprise.

Strategic transactionalism, the hallmark of Prabowo’s first year, offers agility but at two costs. Conceptually, it reduces foreign policy to bargaining. Reputationally, when every engagement becomes a deal, others respond in kind, and trust erodes. Indonesia risks being seen as a country that is always available but rarely reliable.

The irony is that this instrumentalism appears just as Indonesia’s weight is growing. The economy is expanding, the digital and green sectors are maturing, and demographic trends promise sustained growth. Yet power alone does not create influence without an anchoring narrative. For decades, Indonesia’s relevance came from turning its limitations into a philosophy built on moderation, dialogue, and respect for sovereignty. That moral vocabulary has faded.

Observers often describe Prabowo’s diplomacy as restless or hyperactive, but the truer word may be absorptive. Indonesia absorbs the logic of others rather than articulating its own. Leaders invoke independence yet mirror the transactionalism they claim to balance. If this continues, Indonesia’s foreign policy will increasingly resemble a mirror instead of a compass. The republic that once guided decolonising nations toward confidence now follows others’ trajectories, adjusting its angles but not its principles.

One year on, Prabowo has stood in palaces and parliaments, speaking of balance and independence. He has shaken hands with autocrats and democrats alike, promising friendship and respect each time. Yet as the cameras fade and the applause quiets, one question remains. What story does Indonesia want the world to hear, and who is writing it?

Indonesia is navigating political turmoil, economic instability, and social unrest. Governance is weakening, investor confidence is fading, and inequality is worsening. Does President Prabowo Subianto have the answers to turn the tide? On current evidence, the answer is no.

In his national address on 15 August, Prabowo openly condemned the entrenched culture of corruption, coining the term “serakah-nomics” to describe an economy driven by greed rather than the national interest. His vision of “Indonesia incorporated” calls for collaborative, cross-sector growth. He encouraged public scrutiny, urging citizens: “Don’t stop criticising. Be brave in oversight and correction.”

Optimism faded quickly as deadly protests over rising economic inequality and limited opportunities erupted weeks after the speech. A major cabinet reshuffle soon followed, along with the revocation of House of Representatives policies and disciplinary actions against members. But these actions were seen more as a political ploy to regain support than a push for real reform. Many now question if the government will simply drift further into inefficiency, patronage, and a militarised centralisation of authoritarian power. Prabowo reportedly toyed with using the military to contain the protests, though ultimately demurring.

Indonesia may look like an investor’s dream – with abundant resources, a young population, and strategic geography – but potential doesn’t guarantee prosperity. Without strong governance, regulatory certainty, and credible sustainability standards, natural wealth becomes a liability. The same goes for its so-called demographic dividend: youth unemployment sits at 16%, more than half the workforce is informal, and job-ready skills are lacking. The middle class, a key driver of political stability and economic growth, is shrinking – from 21.5% in 2019 to 17.1% in 2024.

Prabowo’s signature policies are unlikely to turn things around. His economic vision is rooted in nostalgic economism, harking back to the Suharto era when state control, military involvement, and “gotong royong” (mutual cooperation) were the dominant organising principles.

Take Prabowo’s flagship Free Nutritious Meals (MBG) program targeting over 80 million recipients – including schoolchildren, pregnant women, breastfeeding mothers, and toddlers. This aims not only to tackle malnutrition and boost school attendance but also to drive regional economies by sourcing food locally and creating “kitchen jobs”. Rushed implementation has already translated into serious challenges, including food poisoning, poor targeting, weak oversight, and a lack of transparency. Yet, Prabowo is pushing forward with a plan to scale up the scheme, with the National Nutrition Agency’s budget set to double from US$10 billion in 2025 to US$20 billion next year.

Rather than tax Indonesia’s tycoons and regulate their businesses more effectively, Prabowo seems more intent on cajoling them to support his own pet projects and centrally directed economic vision.

The Koperasi Merah Putih program reflects a similar state-led attempt to boost rural economies by creating 80,000 village cooperatives, backed by a US$12 billion budget mainly through low-interest loans from state banks. While it offers a chance to empower rural communities, analysts warn of risks such as rent-seeking and misuse of funds. There are doubts whether the cooperatives will be truly bottom-up or imposed top-down, limiting local control, weakening village autonomy. A lack of skilled management, infrastructure, and commitment to transparency in villages also raises questions about the program’s long-term viability.

Along a similar vein, the Food Estate program aims to boost food security by expanding large-scale agriculture to increase staple crop production, reduce import reliance, and ensure self-sufficiency. Yet there are substantial doubts over both viability and potential impacts. Nearly 80% of farmers are over 40 years of age, most working as smallholders with limited access to technology. Younger Indonesians are steering clear of farming in favour of better-paying urban jobs. Meanwhile, land use, environmental impact, and local execution remain contested.

Outside agriculture, Prabowo is also pushing forward with state-led policies with substantial doubts hanging over them.

Indonesia's downstreaming policies raise serious concerns over environmental harm and worker safety. While capital-intensive investments in mineral processing and related industries have had some success, they have made little lasting impact. Despite rising output, the anticipated benefits to local economies – such as job creation and technology transfer – remain minimal.

Prabowo’s new Danantara sovereign wealth fund plans to issue US$3.1 billion in Patriot Bonds to fund strategic projects. The plan is to “offer” these privately to major conglomerates at a 2% fixed coupon – well below the 5% market rate. Rather than tax Indonesia’s tycoons and regulate their businesses more effectively, Prabowo seems more intent on cajoling them to support his own pet projects and centrally directed economic vision.

One area where more credit is due is Indonesia’s foreign economic policies. Prabowo is actively diversifying. Indonesia has joined BRICS, secured free trade agreements with the European Union and Canada, and negotiated lower Trump tariffs and, potentially, exemptions for important exports. The country is also pursuing membership of the Organisation for Economic Cooperation and Development and pushing for entry to the Comprehensive and Progressive Trans-Pacific Partnership, though these have been in the works for some time. In theory, these policies will better integrate Indonesia into global value chains, attract investment, and generate more and better jobs.

Achieving greater global integration, however, also requires domestic coherence. Without regulatory certainty, infrastructure reform, and institutional integrity, the promised gains will remain elusive. Trade will be crucial to achieving the job creation Indonesia needs. But Indonesia cannot trade its way out of domestic dysfunction.

Indonesia’s Free Nutritious Meal program carries an irresistible political promise, that no child should go hungry at school. Launched in January 2025 by President Prabowo Subianto and widely known by the acronym MBG, it aims to provide free meals to tens of millions of schoolchildren, toddlers, and pregnant women. The ambition is historic in scale, but its execution has revealed a troubling gap between vision and capacity.

The program’s budget is colossal. The government set aside Rp 171 trillion (US$10.2 billion) in 2025, with plans to nearly double it in 2026. This announcement won international attention, positioning Indonesia as a champion of social welfare. Yet by the middle of the year, only Rp 3 trillion had been spent, reaching fewer than four million beneficiaries against a target of more than 17 million. The mismatch suggests a program pushed faster than the system can handle.

Food safety has become its most alarming flaw. By September 2025, almost 6,000 people, including more than a thousand children in West Java, had been hospitalised after consuming MBG meals. Reports pointed to spoiled ingredients, poor hygiene, and untrained kitchen staff. Authorities shut down dozens of kitchens, while police launched probes. But these are not minor errors. They highlight weaknesses in procurement, supervision, and training. For a program feeding children, the tolerance for mistakes is essentially zero.

Institutional weakness compounds the problem. MBG is overseen by the newly created National Nutrition Agency, yet no presidential regulation had defined its powers or accountability. Transparency International Indonesia has warned of corruption risks, from inflated contracts to collusion in kitchen tenders. The Indonesian ombudsman noted “brokers” exploiting loopholes and failures in enforcing safety standards.

In short, MBG operates with billions in play but without firm legal or administrative scaffolding.

The program still has a chance to succeed, but only if Jakarta slows down, builds the rules before expanding, and places quality above coverage.

Looking at examples abroad, Indonesia’s rush appears reckless. Japan’s school lunch program is decentralised, tightly supervised, and supported by dietitians. China focuses subsidies on poor rural districts instead of promising universality. Malaysia, Singapore, and the Philippines restrict free meals to disadvantaged groups or early childhood centres. These models are targeted, gradual, and anchored by strong oversight. Indonesia, by contrast, has leapt directly into near universal coverage without first building trust or capacity.

Scale alone makes the task daunting. Feeding tens of millions daily across thousands of islands requires logistical precision. Inadequate oversight almost guarantees uneven quality. Weak procurement allows unreliable suppliers. Missing regulations leave accountability gaps. Worse, MBG funding comes from the education budget, raising concerns that classrooms and teachers will be shortchanged while vast sums flow into kitchens still failing basic safety.

None of this means MBG should be abandoned. But recalibration is urgent. Targeting should be narrowed initially to malnourished regions, rather than promising all children instant access. Legal clarity must be established through binding regulations. Oversight should include local governments, parents, and independent auditors, while data on spending and food safety incidents must be made public. Expansion must be gradual, with strict kitchen standards and training preceding any increase in coverage.

MBG is a noble idea undermined by premature universalism. In theory, no child hungry at school is a goal worth striving for. But in practice, Indonesia has shown how populism can outrun governance. Instead of becoming a showcase for inclusive development, MBG risks being remembered for food poisoning, wasted trillions, and shaken trust in public institutions.

The program still has a chance to succeed, but only if Jakarta slows down, builds the rules before expanding, and places quality above coverage. Otherwise, a project meant to nourish a generation may instead stand as a cautionary tale about the dangers of rushing grand promises without the systems to deliver them. In its current form, Indonesia’s free meal ambition looks less like a solution to hunger and more like a recipe for risk.

And if the government refuses to learn from its own failures, then MBG may prove less about feeding children and more about feeding political egos, an experiment in which Indonesia gambled with public trust, and the nation’s youngest citizens were left to pay the price.

As the world prepares to convene for COP30 in Brazil this November, Indonesia finds itself at the familiar crossroads of climate ambition and economic opportunity. This year, the Indonesian government is showcasing a bold “Green Industrial Policy”, designed to demonstrate the country’s commitment to reducing greenhouse gas emissions while simultaneously attracting investment. But questions remain about the effectiveness and clarity of the projects Indonesia is bringing to the table.

According to the Ministry of Environment and Forestry (KLH), Indonesia will present 14 emission-reduction projects as part of its climate portfolio at COP30, collectively aiming to save 4.8 million tons of carbon dioxide equivalent (CO2e) from entering the atmosphere. These initiatives, some transitioning from the old Clean Development Mechanism under the Kyoto Protocol, are now being aligned with the new Paris Agreement mechanisms under Article 6.4. The government frames these projects not just as environmental action but as economic assets – a way to leverage the potential of Indonesia’s carbon market for international partnerships and investment.

Observers of Indonesia’s past COP campaigns note a recurring pattern: the projects presented often lack transparency, clear timelines, or detailed implementation strategies.

Indonesia’s strategy is emblematic of a broader global trend: nations increasingly view climate commitments as opportunities for business deals. COP conferences, historically forums for negotiations, have evolved into stages where governments and corporations simultaneously pursue climate and commercial objectives. In this context, Indonesia’s Green Industrial Policy serves a dual purpose: signalling climate leadership while enticing investors to fund domestic green projects.

Yet observers of Indonesia’s past COP campaigns note a recurring pattern: the projects presented often lack transparency, clear timelines, or detailed implementation strategies. While the headline numbers – millions of tons of CO2e reduced – sound impressive, they sometimes mask uncertainties about actual impact, financing, and feasibility. Deputy for Climate Change Control Ary Sudijanto of the KLH/BPLH acknowledged that mitigation and adaptation efforts still face funding gaps, with promised international support frequently unfulfilled.

This tension between ambition and execution highlights a critical lesson for Indonesia as it heads to COP30. Climate diplomacy is increasingly measured not only in pledges but in credible pathways to achieve them. A Green Industrial Policy, if it is to be more than a marketing tool, requires clarity in project design, robust monitoring mechanisms, and genuine partnerships with both domestic stakeholders and the international community. Without these, even the most innovative projects risk being dismissed as aspirational rather than actionable.

Indonesia does have reasons for cautious optimism. The country has a track record of 17 greenhouse gas reduction projects previously implemented under the Clean Development Mechanism, which are now being transitioned to comply with Paris Agreement standards. This institutional experience gives Jakarta a foundation to scale up mitigation projects and attract investment in sectors ranging from renewable energy to sustainable forestry. Moreover, Indonesia’s vast natural resources and growing industrial base present opportunities for a genuinely green industrial transition, if paired with strong governance and enforcement mechanisms.

As COP30 approaches, Indonesia has a unique chance to model how emerging economies can align industrial policy with climate commitments.

But the stakes are high. As global scrutiny intensifies ahead of COP30, Indonesia’s Green Industrial Policy will be judged not just by the promises it makes but by the clarity and credibility of its execution. Investors, international partners, and civil society alike are increasingly wary of climate pledges that double as business opportunities without measurable impact. Indonesia’s challenge is to ensure that the Green Industrial Policy is more than a showcase – it must be a vehicle for both sustainable development and genuine emissions reductions.

In practice, this means creating a policy environment where projects are transparent, financeable, and monitored rigorously. Mechanisms for tracking carbon credits, verifying emission reductions, and ensuring local community benefits are essential to prevent greenwashing and to deliver on the promises made at international forums. It also requires a candid conversation with global partners about the financing gap that continues to constrain climate action.

As COP30 approaches, Indonesia has a unique chance to model how emerging economies can align industrial policy with climate commitments. Done right, the Green Industrial Policy could be a blueprint for balancing economic growth with environmental stewardship. Done poorly, it risks repeating a familiar pattern of ambitious announcements without meaningful follow-through.

In the end, the measure of success will not be the number of projects on display or the megatons of CO2e claimed. It will be whether Indonesia can translate these commitments into tangible emissions reductions, sustainable economic opportunities, and credible leadership on the global climate stage. COP30 offers the spotlight – but it is the post-COP action that will truly define Indonesia’s climate legacy.

Across the world, financial regulators are racing to adapt to the explosive growth of digital lending, fintech platforms, and non-bank credit. Traditional methods of supervision, based on reports that arrive long after risks have built up, are proving too slow.

This has spurred a global turn toward Supervisory Technology (SupTech), powered by artificial intelligence. Indonesia has joined this race, launching an integrated SupTech platform and outlining a roadmap that places digital supervision at the heart of its strategy. The outcome matters not only for Indonesia’s financial stability, but also for how emerging markets around the world manage the next wave of technological disruption in finance.

Singapore has piloted anomaly detection systems to flag suspicious patterns in real time. Australia has explored predictive analytics to identify risks before they spread. India has invested heavily in integrated platforms to monitor its vast non-bank financial sector. These initiatives suggest that in Asia’s financial stability race, technology is becoming as critical for regulators as it is for the firms they oversee.

Indonesia has one of Asia’s largest multifinance sectors, making it a valuable test case for emerging markets.

Indonesia’s journey began in 2022, when the Financial Services Authority (OJK) launched OSIDA (SupTech Integrated Data Analytics) for banking supervision. The system was designed to strengthen risk-based supervision by applying big data analytics to detect risks earlier and more accurately. Earlier this year, OJK expanded OSIDA to the capital market, using advanced analytics and AI to strengthen investor protection and market integrity. Together, these steps mark Indonesia’s commitment to embedding digital tools across its supervisory architecture.

The next frontier is the multifinance sector, institutions that offer a range of financial services including loans, leases or credit. In 2024, OJK unveiled its Roadmap for Multifinance Companies 2024–28, which explicitly highlights digitalisation and SupTech as pillars for strengthening the industry. As of May 2025, Indonesia’s multifinance sector managed more than Rp500 trillion (approximately US$32 billion) in assets, with about 70% tied to vehicle financing – making it central to household consumption and an urgent test case for AI-driven oversight.

Applying SupTech to multifinance could transform supervision. Machine learning models could flag rising default risks in specific regions, detect unusual lending concentrations, or simulate the impact of macroeconomic shocks on non-bank lenders. Such tools would reduce the likelihood of systemic risks building up unnoticed.

The opportunities are clear. SupTech could help Indonesia manage the rapid growth of consumer credit outside the banking system, safeguarding stability while preserving financial inclusion. It could also level the playing field, ensuring that both large and small finance companies face consistent data-driven oversight.

But the challenges remain significant. Data quality across multifinance firms is uneven. Some companies maintain sophisticated digital systems, while others still rely on patchy or outdated reporting. Without consistent standards, algorithms may produce misleading signals. Regulators also face a skills gap: building and maintaining AI-based tools requires expertise in data science, cybersecurity, and governance that supervisory agencies are still developing.

There are also broader risks. Overreliance on “black box” models could undermine accountability if regulators cannot explain why a particular firm was flagged. And in an era of rising cyber threats, SupTech systems themselves could become targets, exposing sensitive financial data.

Indonesia’s phased rollout – first banking, then capital markets, and now a roadmap for multifinance – offers important lessons. It shows how regulators in emerging markets can scale technology step by step, using experience in one sector to inform expansion into others. At the same time, it underscores that digital supervision is not just about tools but also about governance, capacity, and public trust.

The regional stakes are high. Indonesia has one of Asia’s largest multifinance sectors, making it a valuable test case for emerging markets. If successful, its model could inspire regulators in the Philippines, Vietnam, and Thailand, where non-bank credit is also expanding rapidly. If it falters, doubts will grow about whether SupTech can be scaled beyond advanced economies.

Geopolitics adds another layer. Just as fintech has become a field of competition among private firms, regulatory technology may become a marker of influence among states. Countries that can build trusted, effective SupTech platforms will not only protect their own stability but also set regional norms for oversight. In this sense, the competition is no longer only about who innovates in finance, but also about who innovates in regulation.

Indonesia now stands at a crossroads. With OSIDA, it has shown that digital supervision is not a distant aspiration but a present reality. With the multifinance roadmap, it has signalled where this technology is headed next. The question is whether it can extend this capability effectively to a sector that touches millions of households. If it succeeds, Indonesia could join the front ranks of Asia-Pacific regulators shaping the future of oversight. If it fails, it risks being left behind as financial innovation races ahead.

The lesson is simple: in today’s fast-moving financial landscape, regulation cannot afford to remain slow. SupTech is not an experiment but a necessity, and Indonesia’s next step will determine whether it keeps pace – or falls behind – in the global race for financial stability.

Indonesia, the world’s largest palm oil producer, is once again at the centre of global energy and trade debates. The government has confirmed plans to advance its biodiesel program with a mandatory blend of either B50 (50% palm-based biodiesel) or B45 starting in 2026, though the final decision is still under review. This move reflects Jakarta’s ambition to reduce dependence on imported fossil fuels, strengthen domestic energy security, and support palm oil producers facing an increasingly volatile global market.

At home, biodiesel plays a dual role: as both a tool for energy resilience and a support for rural livelihoods. Indonesia imports around one million barrels of crude oil per day, with the total annual import bill for crude oil, refined fuels, and LPG reaching approximately Rp 500 trillion (around US$30 billion). This massive dependence strains the trade balance and makes the economy vulnerable to oil price shocks. Expanding biodiesel use could save billions in foreign exchange while providing a buffer against global volatility. Simultaneously, palm oil remains a backbone of the economy, employing more than 16 million people directly and indirectly. Ensuring stable domestic demand through biodiesel blending helps shield the sector from global downturns.

As the largest palm oil exporter, Jakarta’s biodiesel push has regional and global trade consequences.

Yet the road ahead is not without challenges. Moving rapidly to B50 risks straining supply chains and creating technical issues for engines unprepared for higher blends. Business groups have urged the government to consider B45 as a transitional step. Even in the existing B35 program, complaints have surfaced about clogged filters and higher maintenance costs. Without robust road testing and technological adaptation, the policy could generate pushback from transport operators and consumers.

The implications stretch beyond Indonesia’s borders. As the largest palm oil exporter, Jakarta’s biodiesel push has regional and global trade consequences. Diverting more crude palm oil (CPO) for domestic energy may tighten supply in export markets. While the government insists exports will remain strong, the balance between domestic energy use and foreign demand remains delicate. Europe, which recently granted Indonesia a quota of up to one million tons of duty-free CPO imports, will closely monitor these shifts. In India and China – both major buyers of Indonesian palm oil – any reduction in exports could raise prices and incentivise alternative suppliers such as Malaysia to expand market share.

Indonesia’s biodiesel strategy also intersects with ongoing disputes at the World Trade Organisation (WTO). The European Union has repeatedly challenged Jakarta’s palm oil policies, including export restrictions and sustainability standards, arguing that they distort global trade. By diverting more crude palm oil into domestic biodiesel, Indonesia risks fuelling further scrutiny from its trading partners, who may see the policy as protectionist. At the same time, Jakarta has consistently defended its right to manage natural resources for national development and climate goals. This tug-of-war at the WTO illustrates how Indonesia’s energy transition is not only an economic choice but also a test of how far developing nations can assert sovereignty in the global trade regime.

In parallel, competition is intensifying as advanced economies develop alternative vegetable oils for renewable energy. Australia, for example, has recently invested Rp12 trillion (US$725 million) in the expansion of canola and similar crops to challenge palm oil’s dominance as a bioenergy feedstock. This move highlights that Indonesia’s palm oil leadership will not go unchallenged, as the global race towards renewable fuels accelerates.

Indonesia’s biodiesel program is not just an energy policy – it is a strategic choice at the crossroads of domestic stability, regional competition, and global climate politics.

Geopolitically, biodiesel strengthens Indonesia’s position in the global energy transition. Unlike many developing economies dependent solely on imported fuels, Jakarta can leverage its vast palm oil base to argue for a “Southern model” of renewable energy, grounded in local resources. This model also plays into climate diplomacy. While palm oil remains controversial for its environmental footprint, Indonesia has pledged to expand certified sustainable plantations and curb deforestation. Success in aligning biodiesel expansion with sustainability goals would allow Jakarta to present itself as both a leader of the Global South and a responsible global actor.

In Southeast Asia, Indonesia’s policy creates a ripple effect. Malaysia, the second-largest palm oil producer, is watching closely, as its own biodiesel ambitions hinge on not losing competitiveness. Thailand, Vietnam, and the Philippines – net importers of palm oil – must adapt to potential price fluctuations. Beyond the region, biodiesel also interacts with EV policies. While China’s BYD and others are flooding ASEAN markets with affordable electric cars, Indonesia is pursuing a parallel path where palm oil fuels remain vital for trucks, ships, and aviation.

Ultimately, Indonesia’s biodiesel program is not just an energy policy – it is a strategic choice at the crossroads of domestic stability, regional competition, and global climate politics. It is a statement that Indonesia refuses to remain dependent on imported fossil fuels and instead seeks to harness its own natural resources to shape a different development trajectory. The policy embodies the government’s determination to secure long-term energy independence, stabilise rural livelihoods, and reinforce Indonesia’s bargaining power in international trade forums where palm oil and sustainability are often contested.

The success of B45 or B50 will depend on how well Jakarta balances technical feasibility, trade commitments, and sustainability goals in the years ahead. Rushed implementation risks undermining public confidence and international credibility, but careful management could transform Indonesia into both a regional energy stabiliser and a global standard-setter for biofuel innovation. If executed effectively, the policy will allow Indonesia to move beyond the image of being merely a palm oil superpower towards becoming a genuine renewable energy leader, capable of bridging economic growth with environmental responsibility and influencing the direction of the global energy transition.

The lead up to Indonesia’s Independence Day on 17 August is a colourful affair. Red and white blankets every surface and pole in the country ahead of celebrations. This year will mark an 80-year milestone – one the government isn’t keen on sharing with a popular long-running anime TV series.

One Piece is a classic for a reason, a tale of good people versus a draconian regime that rules with an iron fist and ostentatious decadence. The story follows Monkey D Luffy and fellow Straw Hat Pirates in a quest for treasure that would allow the gang to overthrow the evils of World Government.

But in Indonesia, for anime fans of a particular political persuasion, the parallels with the increasingly centralised government led by President Prabowo Subianto are attractive.

And so, with 17 August looming, the flag under which Monkey and friends strive – a cartoon jolly roger wearing Monkey’s straw hat – has become a symbol of dissent in Prabowo’s Indonesia. It began slowly, with the cartoon flag appearing on the back of trucks and spreading widely online. Now, with the ubiquity of the Indonesian flag across the country this month, the appearance of the jolly roger displayed underneath the red and white has erupted into a culture war.

“The Indonesian flag is not a choice. It is a necessity. The Indonesian flag cannot be replaced,” Hasan Nasbi, head of the president’s communications office, told local media on Monday.

Protesters say that’s not quite what is happening. The South China Morning Post published comments from one anonymous user who claimed “the red-and-white flag is too sacred for us to raise right now, at a time when many people are still colonised by those in power.” The flag is “the spirit of resistance against injustice.” It’s a sentiment widely echoed online.

As with all regulation, what “counts” as violations and who gets to decide is slanted to favour those with power.

Fandom of the mega-popular anime is not a prerequisite. Savvy internet users have become accustomed to pop culture references replacing explicit naming and shaming. Euphemisms for the country’s government and leading political figures are a common feature of online dissent. China has seen Winnie-the-Pooh equated with Xi Jinping, for example. And in Indonesia, too, through the Joko Widodo period, “Wakanda”, the fictional country in which Marvel’s 2018 hit Black Panther is based, became the name of choice for Indonesia in online discussions to critique moves that were strikingly similar to those made by the then president.

As with all regulation, what “counts” as violations and who gets to decide is slanted to favour those with power. It often reveals authorities to be deeply fearful of dissent. During Jokowi’s consecutive terms, the controversial Information and Electronic Transactions Law (UU ITE) was increasingly deployed against individuals the government accused of defamation and hate speech or displays of “immorality”. A pandemic-era discussion about revising those laws ultimately fizzled, but by then the fear had set in anyway.

Such deliberate online obfuscation has continued into the Prabowo era, suggesting it is simply now a feature of public discourse in Indonesia as long as dissent remains curtailed.

That pairs with another feature of the Prabowo era – the inability to ever let anything go. Prabowo’s desire to be seen as a great unifier has been very successful in the parliament, with all parties now kissing the ring. This leaves the people as the sole source of opposition, and, despite a sizable win over his presidential challengers, Prabowo has found bringing the country to heel is much more difficult.

Countrywide protests earlier this year clearly rattled the President. The protests, dubbed Indonesia Gelap (Dark Indonesia), focused on reforms to the military law, but soon spilled over to broader social issues including police violence and corruption. They were large, dramatic and, at times, violent. But they were also short-lived. For Prabowo, the threat lingers. He accused foreign interlopers and corruptors of bankrolling the movement during a speech at the Solidarity Party of Indonesia’s conference last month. This was despite there being no large-scale demonstrations against his government for months.

Which brings us back to One Piece and the cartoon jolly roger in the vicinity of Indonesia’s national flag.

Deputy House Speaker Sufmi Dasco Ahmad, Prabowo’s right hand man and the closest we often get to what the president himself thinks, is scathing of the display. “There is a coordinated attempt to divide the nation,” he told media on Friday. Police have warned communities across the country of crackdowns and white paint is at the ready if anyone thinks that cartoon murals are a better move than flags.