The Indonesian president’s push for a stronger state hand in resource governance creates uncertainty for businesses and the public
IN AUGUST, Indonesian President Prabowo Subianto announced a major seizure of land and assets from private businesses in the commodities sector, transferring them to state-linked companies. The ramifications of this move have slipped out of the headlines amid the recent urban protests in the country.
Yet, the Prabowo administration’s new policies could have major implications for the country’s palm oil and mining industries, raising questions about sustainable development in the country, as well as creating uncertainty for local and foreign businesses, and investors, as they navigate these regulatory shifts.
Just days before the demonstrations broke out, Prabowo delivered a State of the Nation address focused on ending corruption and income inequality. Rather than blaming politicians for enjoying an outsized share of the pie, as protestors have done in recent weeks, Prabowo said corrupt businesses were exploiting Indonesia’s resources.
