An earthquake of magnitude 7.7 hit Flores in East Nusa Tenggara (NTT) last week. Thousands of aftershocks followed, along with tsunami warnings. Houses destroyed. Hospital ceilings collapsed. Roads disappeared under landslides. At least 75 people died across Manggarai, Nagekeo, and the rest of NTT.

Over 27,000 families were displaced from their homes — gathered under plastic tarps in swamped local emergency centers — as officials arrived with supply drops and the usual promises of rapid reconstruction.

None of this was unpredictable. Indonesia is a disaster-prone country. We have seen the country endure countless disasters: floods, landslides, earthquakes, tsunamis, and forest fires. Yet, the same scenarios played out one disaster after another. Government responses often stop at delivering aid and photo-ops. They seldom reach real steps toward disaster resilience.

After last year’s devastating Sumatra floods, the government has talked of upgraded early-warning systems, enforced building codes, and fortified regional response budgets. Yet, almost a year on, thousands of people in Sumatra still live in temporary shelters, waiting on aid that never arrived, sitting next to infrastructure that never got rebuilt.

If the Sumatra flood was supposed to be the moment the state finally learned something about preparedness and resilience, the NTT earthquake proves it didn’t. It just waited for the cameras to point somewhere else – until the next disaster happens.

Indonesia sits on the Pacific Ring of Fire, wedged against active fault lines like the Flores Back-Arc Thrust, where tectonic activity happened and caused the latest earthquake. So an earthquake in our archipelago is no mystery. And yet the state seems to treat every earthquake as a shock nobody could have anticipated, as though our geography changed overnight.

National Disaster Mitigation Agency (BNPB) acting spokesperson Berton Panjaitan admitted to the press that the agency struggled to deliver aid to affected areas because of Flores’ difficult geography and landslide-destroyed road conditions. In some villages in Manggarai, for example, journalists reporting from the field observed no BNPB-branded orange tents in emergency camps, forcing displaced people to erect makeshift tents from bamboo and tarps.

Underneath these seemingly “acceptable” difficulties is a structural issue. This year, BNPB underwent a massive budget cut, from Rp 2.01 trillion in 2025 to Rp 491 billion in the 2026 state budget. In fact, the agency’s budget has decreased every year since 2021. Crazy to think that a disaster-prone country keeps cutting costs for disaster mitigation. Yes, Finance Minister Purbaya Yudhi Sadewa has reassured that the government has put aside Rp 5 trillion emergency disaster relief fund from the state budget, ready to use and can even be topped up when requested. But without transparent and consistent criteria, national sign-off to access urgent disaster funds might just add another bureaucratic layer in time of need.

Speaking of geography, physical isolation from landslides cutting off supply roads, severed cables, and entire power grids going down often gets talked about as an inevitable impact of nature’s wrath. But what it really shows is an infrastructure system with no backup.

Look at what happened in Palue Island, the region closest to the earthquake epicenter. The island went completely dark, literally and figuratively, as the quake knocked out the power grid and telecommunication towers. Coordination between responders fell apart. Villages lost contact with each other. Aid arrived late as ships were docked due to tsunami warnings. If only there were budgets for redundancies like satellite and power-grid backups for local government offices...

As with what happened in Sumatra, this natural disaster episode is a picture of regional autonomy meeting its limits. Yes, local governments are supposed to run the emergency response, but provinces like NTT have thin local revenue to begin with. Asking a cash-strapped regency to run field hospitals, shelter logistics, and crisis communications on its own, without real transfers from Jakarta, is an exhibit of failing decentralization.

After all, what incentives do Jakarta elites have for disaster preparedness and resilience? Handing out relief boxes and cutting a ribbon on a rebuilt clinic gets you on the news, but not funding seismic research or keeping a satellite network running in the background. It’s no surprise the state keeps investing in the visible, photogenic version of disaster response, while neglecting the “boring” parts that actually save lives before the ground moves.

We should be fair and acknowledge that disaster response, especially in a province with difficult terrain spread across hundreds of islands like NTT, is genuinely hard. Building redundant infrastructure everywhere is expensive in a way that’s easy to say and brutal to fund. But “expensive and hard” describes almost every serious governance problem. It shouldn’t be an excuse to do nothing. If anything, it should be a reason to start.

Sumatra should have forced this reckoning already. After the disaster hit in November 2025, it took the central government eight months to even propose more budget for Sumatra reconstruction. The questions are: in the months people waited for Jakarta to make a decision, how many lives were lost? How much hardship did the people have to endure on top of an already devastating disaster? And, most importantly, how much public trust has diminished?

We can’t allow NTT to be “abandoned” the same way once the story goes cold and the news cycle moves on. Things need to happen even if it’s unglamorous: ensuring the state allocates enough budget for disaster preparedness and allows room to build redundant infrastructure, such as backup power grids, especially for hospitals and crisis centers on islands at risk of isolation. The state should provide non-negotiable central funding for Regional Disaster Mitigation Agency (BPBD) offices in poor, high-risk provinces, instead of leaving them to fend for themselves.

Indonesia won’t stop having earthquakes. Whether they keep turning into mass casualties is a choice the state makes every year it doesn’t fund the “boring” stuff.

♪ Kini terasa sungguh
Semakin engkau jauh
Semakin terasa dekat ♪ —

— wait, stop the music!

We know Nuansa Bening is the go-to golden memory song to sing along to for many of you reading this, but let’s be careful. After all, we’ve seen how the late Vidi Aldiano went through a long legal battle with the original composer over the performing rights of the song he made famous again with his 2008 rendition.

Okay, we might not be in trouble for “singing” the song in this article – that’s not how copyrights work. Though now we are compelled to ask: how does it actually work?

Let’s look outward now with the megastar Taylor Swift, who has been re-recording her past albums since 2021, releasing them with a “Taylor’s Version” tag. This is not because she’s run out of ideas for new material, but because of the complexity of copyrights.

Early in her career, Taylor signed with Big Machine Records, which helped propel her into the limelight. But this partnership gradually became predatory, at least according to the singer, as she grew more popular. As is standard in most recording contracts at the time, the label owns the “masters” of her first six albums, giving it a larger share of future profits from the commercial use of Taylor’s songs.

When Taylor’s efforts to purchase the rights to these original albums entangled her in a high-profile dispute with the label, the artist took an alternative route: as she owned the publishing rights (rights protecting artists’ musical composition, e.g. lyrics, melodies, that is separate from recording rights, under US law) of her composed songs, she re-recorded these albums and released them herself so she could have full ownership of the new recordings of her songs.

But this article won’t tell the story of Taylor Swift’s copyright victory; it will tell the story of Indonesian artists’ copyright battle.

Unlike Taylor and her global pop-star peers, Indonesian artists have far fewer bargaining chips when it comes to rights to their works. They have to navigate murky waters to deal with the country’s outdated and convoluted Copyright Law. Last revised twelve years ago, Law No. 28/2014 has failed both to keep up with the increasingly digital creative industry and to mitigate royalty disputes, most recently between performers and composers.

The House of Representatives (DPR) finally included the revision to the Copyright Law in the 2026 National Legislation Program (‘Prolegnas’, a list of bills that the House will prioritize throughout the year). While the deliberation process is ongoing, it is clear that the revision will continue to address the issue of royalty distribution.

This edition of The Reformist will dissect the political economy of the music industry through the discussion of royalties, the economic rights a copyright holder is entitled to whenever their work is played or performed in a commercial setting. While the term may sound marginal compared to high-profile policies, beneath the seemingly boring bureaucracy is a sector filled with fiery political feuds, lawsuits, and competing ideologies. A much-needed discussion before revisions to the Copyright Law are set in stone, don’t you agree?

A brief history of Indonesia’s Copyright Law

The country’s Copyright Law traces its origins back to the colonial Dutch era. In 1921, the colonial Dutch East Indies government enacted Staatsblad No. 600/1912, a regime that only acted on copyright violations if the rights holder personally filed a complaint. This law persisted long after Indonesia declared independence.

An actual Indonesian Copyright Law (Law No. 6/1982) would only come into existence in 1982, after decades of false starts: ten separate drafting attempts across 14 years, cycling through the Education and Justice Ministry in 1958, the National Legal Development Agency in 1966, and the Indonesian Publishers Association in 1972, each stalled by a backlog of competing bills.

The law was amended again in 1987 to tighten enforcement, and again in 1997 to bring it in line with international norms. Five years later, the law was rewritten and became Law No. 19/2002 as piracy (CD and VCD bootlegging) became the era’s defining threat.

The 2014 revision (Law No. 28/2014) was explicitly intended to ensure the law kept pace with the digital era, but lawmakers were overly focused on digital piracy, failing to anticipate the meteoric rise of digital streaming platforms like Spotify and Apple Music.

This 2014 version is the Copyright Law in place today — the one lawmakers are now “rushing” to revisit and revise some provisions they deem critical. The main star? Music royalties.

Royalty governance has remained inconsistent even after the Law was enacted. The framework only became operational after the release of Government Regulation (‘PP’) No. 56/2021, which clarified how royalties should be managed for the commercial use of music across venues and performances, ranging from cafes and hotels to restaurants and live events. But the problem was never just the absence of clear rules, because tariffs for commercial uses had been set by other regulations before this PP was issued. The real problem, as is with most policies in Indonesia, is weak enforcement.

Who has the most reliable records of which songs were used for commercial purposes? How transparent is the collection and distribution of royalties among all the relevant parties? Who holds the collecting agencies accountable?

These are some of the questions that tell us just how much is still missing from our copyright governance.

The status quo: Centralized royalty distribution

As with many policy problems in this country, legal reforms may have taken place, but institutional enforcement lags far behind. The same can be said for the music industry.

Article 89 of the 2014 law established a collective royalty management mechanism, which was subsequently operationalized through the National Collective Management Agency (‘LMKN’). In addition to collecting, disbursing, and documenting royalties on behalf of every composer and musician in the country, it also serves as a mediating body when disputes break out between parties and documents royalty use across the industry.

LMKN was built to simplify royalty distribution, but in practice it has often been flagged for its opaque management and redistribution scheme. When LMKN receives royalty payments, that money is not directly distributed to the song’s creator. It is first pooled and transferred to one of the 17 government-licensed Collective Management Organizers (CMOs, or ‘LMK’), of which an artist must be a member to receive their royalty checks.

These 17 LMKs are divided into three categories: composers, performers, and producers. Among the 17 are Karya Cipta Indonesia (KCI) and Wahana Musik Indonesia (WAMI) on the composers’ side, PAPPRI and Star Music Indonesia (SMI) representing performers, and Sentra Lisensi Musik Indonesia (SELMI) and Pro Karindo Utama for producers.

This means that if a composer or artist isn’t part of an LMK, there is no way for them to receive royalties. Once the money reaches one of the 17 LMKs, there remains a massive information gap over how the pooled money is then divided before being sent to individual artists.

LMKN officially released new digital mechanisms for distributing royalties only in April 2026. It comprises a ‘song usage system’ that counts how many times a song was played over a given year, and a ‘proxy-based’ Unlogged Performance Allocation (UPA) system for songs whose play record isn’t identifiable.

This creates greater confusion about what was exactly happening in the past. Was it the case that CMOs were distributing royalties arbitrarily?

The answer isn’t entirely clear, since information on the old distribution mechanism was never made public by any CMO. Singer Dewi Gita’s experience in 2024 over her minuscule royalty earnings compounds this confusion, even for individuals in the industry.

“It only says, for instance, that my song ‘Penari’ was only played 1 percent throughout 2024, and then I receive [a check for] Rp 150. That’s all… There’s no breakdown of where that 1 percent is from, what area, what scope,” said Dewi, describing a royalty statement that gave her a percentage — of which was unclear — and a payout with no indication of how that figure was calculated.

Another case in point was House member and singer-songwriter Melly Goeslaw’s, which shows how erratic this opacity could get. In March 2025, she received Rp 559 million in royalties. Four months later, in July, a payment for the same general catalog came in at just Rp 4.9 million.

Melly took the swing in stride publicly to press for structural change, explaining that “It’ll only feel good once the royalty governance is done right, transparent, and accountable.”

With the amount of backlash directed towards the agency, a degree of self-moderation, or at least self-realization, has begun to spread within the LMKN body.

LMKN supervisory board member and legendary composer Candra Darusman was quoted this year saying that refining how royalties are collected and distributed remains a priority, arguing the real challenge isn’t collecting the money but making sure it reaches the right rights holder through accurate data.

LMKN was a good reform, in theory

The irony is that the LMKN is a sound reform on paper. Compare it to the United States, where the music industry runs on an oligopoly of competing private CMOs, meaning that any commercial venue that wants to legally play music has to identify and pay licensing fees to all of them, since there’s no way to know in advance which organizational body represents which artist. Indonesia’s model sidesteps that mess entirely with one managing entity, which has failed to live up to expectations.

The question of whether this new digital distribution system will work or not remains to be seen. But the fact that it is difficult even for sitting House members to gather information on their own royalty dues suggests a systemic problem that has gone unnoticed by the public eye.

Performing rights at the heart of the problem

Royalty disputes in the music industry generally fall into one of three buckets:

• Mechanical rights, which cover the reproduction of a song, pressing it onto a CD, licensing it for a streaming platform’s catalog.

• Synchronization rights, which cover the use of a musical work in visual media, a film, an ad, a TV show.

• Performing rights, which cover what is messiest in Indonesia’s case. The public performance of a song, whether through the radio, a cafe’s speaker system, or an artist singing it live on a stage.

It’s the last category in which nearly every fight this piece has traced so far actually lives.

For small-scale commercial spaces like cafes, pubs, and restaurants, there’s no way for the LMKN to track which individual songs are actually being played, so a blanket fee exists instead: a flat charge that pools royalties collectively rather than billing per song.

Larger events follow the same logic at a bigger scale. Event organizers pay LMKN a blanket fee relative to the size of the event itself: two percent of ticket sales for paid shows or total operational costs for free ones. The graph below shows the different fees commercial venues are charged by the LMKN.

In a perfect world, once that money is collected, the LMKN and the LMKs beneath it are supposed to document exactly which songs were performed, so the correct copyright holders receive the correct share. But much like how distribution schemes aren’t made public by CMOs, neither are the mechanisms for collecting performing rights royalties (we couldn’t find any kind of reports on LMKN’s official sites).

The high-profile Nuansa Bening dispute

LMKN’s incompetence in settling performing rights disputes is best highlighted in the massive legal case between the late singer-songwriter Vidi Aldiano and music composer Keenan Nasution that we’ve mentioned at the beginning of this article.

Keenan, co-writer of the song Nuansa Bening — first released in 1978 — alleged that royalties from Vidi’s 2008 cover had gone unpaid for over 17 years. He filed a lawsuit over 31 concerts in which Vidi performed the song live, demanding more than Rp 24.5 billion in reparations.

Keenan argued that Vidi and his legal team failed to ask for explicit consent to perform the song in live performances. While the case was dropped in March, following Vidi’s passing, a Constitutional Court review of the Copyright Law late last year reaffirmed the Law for everyone that royalties for live performances are legally owed by event organizers, not by the performer.

So, in a case built on 31 individual concerts, 31 separate event organizers were each independently responsible for paying Keenan’s royalties, with no single body confirming whether any of them actually did so. This is compounded by the fact that Keenan only joined a CMO in 2022, making it all the more difficult for any performing rights royalties to be sent to the composer.

We are not here to decipher the intentions behind Keenan’s lawsuit, but his choice to take legal action against what he believed to be close to two decades’ worth of unfair economic redistribution indicates a glaring bureaucratic inefficiency in the country’s royalty distribution governance.

This performing rights dispute between Vidi and Keenan is the pandora’s box for a larger ideological dispute taking place in the country’s music industry.

The case for a decentralized rights regime

But centralization through LMKN isn’t technically the only model on the table. Article 81 of the 2014 law already permits creators to license their work directly to a user, bypassing the LMKN altogether, a mechanism known as direct licensing. Strangely, the Article remained unfamiliar for years, even to music industry players.

When Gerindra politician and ‘Dewa 19’ frontman Ahmad Dhani was asked about his thoughts on the Copyright Law, Dhani explained that he only found out about the possibility of direct licensing eight years after the passage of the 2014 Copyright Law. “I met Minola Sebayang, who explained that performers or songwriters could apply for a direct license. I learned about it eight years later, in 2022,” said Dhani.

If the country’s lawmaker and most vocal direct licensing advocate didn’t even know the option for it existed until nearly a decade into the Law’s passage, it says something about how buried the provision has been beneath the status quo.

Other countries have built systems that treat direct licensing and collective management as complements rather than rivals.

1. In the US, the Copyright Act of 1976 explicitly recognizes direct licensing contracts, and federal consent decrees prevent CMOs from blocking artists who choose to license their own work independently.

2. The United Kingdom takes a similar approach. PRS for Music remains the dominant collecting society, but the Copyright, Designs and Patents Act 1988 preserves a creator’s right to manage licensing on their own terms, particularly for large-scale digital and commercial use.

3. Australia goes further. The country’s antitrust institution, the Australian Competition and Consumer Commission (ACCC), advises that collective licensing agreements should never impede copyright holders’ ability to engage in direct licensing agreements.

It’s not hard to imagine what a system like that would have meant for the legal dispute between Vidi and Keenan. Vidi’s rendition of Nuansa Bening was a career starter for the late artist, lighting the way to what would be years of success as a solo artist. Perhaps a direct-licensing framework would have let the two settle the matter between themselves, a straightforward agreement over a single song, rather than an entire dysfunctional ecosystem.

The messy politics behind music

Beyond the Vidi-Keenan dispute, the broader music industry feud is split between two camps (performers vs. composers) over how royalties should be regulated in the country.

The VISI organization — comprised mostly of singers like Ariel Noah, Armand Maulana, Raisa, Bunga Citra Lestari, the late Vidi, Bernadya, and many more — belongs to a group that believes royalties should continue to be pooled and distributed through a single entity like the LMKN.

On the other side is AKSI, an organization of old-timer music composers like Ahmad Dhani, Keenan Nasution, and Fariz RM that believes copyright holders deserve greater licensing rights and economic compensation for the usage of their work outside the centralized LMKN system. Disgruntled by the current system and unfair economic redistribution policies, this camp has grown frustrated over the centralized status quo.

In August last year, Ahmad Dhani joined a House meeting held by Commission XIII — which handled regulatory reforms — to discuss royalties with Ariel and members of VISI, despite being a member of Commission X, the cultural sector of the House.

Last year, the VISI clique, led by Armand and Ariel, filed the judicial review that helped the late Vidi push the legal battle in his favor. The Court partially ruled in their favor, affirming that royalties from commercial performances are owed by event organizers rather than individual performers. Moreover, the Court ruled that consent for live performances is not required, provided dues are paid to the LMKN.

What is most intriguing about the royalty discourse is that these lobbying activities in the House became so active, in part due to the sheer number of the country’s singers who have turned to politics.

Dhani’s former Dewa bandmate and sitting Indonesian Democratic Party of Struggle (PDI-P) lawmaker, Once Mekel, is not only a party in opposition to Dhani’s Gerindra, but sits across from him in the royalty debate. Dhani backs the direct-licensing crew, while Once backs the centralized LMKN model.

The feud between the two started all the way back to 2023, when Dhani demanded the former Dewa vocalist either stop singing Dewa’s songs in live concerts or pay Dhani royalties each time he performed them.

Like the VISI group, Once argued that event organizers are responsible for paying their dues, as they are often the ones requesting singers to perform certain songs, at least in his case. In March, Once reaffirmed his stance on a centralized model following discussions on the Law’s revision, but is also in agreement with Dhani that there should be stronger provisions governing direct licensing agreements between singers, composers, and rights holders.

From the way deliberation is shaping up in the House, it appears that the centralized model leads the ideological caucus in revising the Law. In August last year, Deputy House Speaker and Gerindra politician Sufmi Dasco Ahmad — informally known as the fixer in the House — put his foot down, stating that royalties would continue to be centrally controlled through the LMKN, while also affirming that the agency would be audited simultaneously for greater transparency.

What should be done to tidy up this mess?

As the House looks to finish a revised Copyright Law, it must ensure the mess from LMKN’s lackluster royalty distribution governance and transparency, or rather lack thereof, is tackled.

We at The Reformist are in the camp that it would be a shame to get rid of the LMKN system entirely. The bureaucratic hassle of a completely decentralized model could discourage the creative industry, with singers becoming selective of song choices in performances, wary of legal disputes and picking a fight.

There’s a beauty in artists paying homage to their peers, whether of the present or the past. Overly policing their ability to sing the country’s rich catalog in fear of persecution will not fare well for the overall creative ecosystem.

At a smaller scale, without a pooled model, small artists and composers with little bargaining power could find it difficult to collect royalties without costly legal and bureaucratic fees.

But this isn’t to say that a decentralized model should be ignored entirely. Other countries have proven that direct licenses can work in tandem with a pooled system. Perhaps with a precedent in place, legal disputes like the one between Vidi and Keenan’s could be resolved and handled without one party suing the other for billions of rupiah.

Despite ideological differences within the music industry, they both agree that structural reforms must take place within the LMKN body.

Deliberations on the revised Law have now been taken over by the Legislative Body (‘Baleg’) of the House since the start of the year, with Committee XIII of the House assigned to lead the formulation process alongside the Directorate General of Intellectual Property (‘DJKI’) of the Ministry of Law. The draft supposedly called for the creation of a National Collective Management Committee (‘KMKN’), a centralized body that will govern the country’s royalty collections and distribution.

How this agency will differ from the LMKN is still a complete mystery. It appears to serve the same purpose as the existing agency, and it is unclear whether the LMKN will be replaced or work alongside it.

There is also a new detail in the draft bill that hints at where lawmakers’ attention actually lies. In Article 29 of the bill, it proposes a “royalty endowment fund” to hold a portion of payments for works whose creator can’t be identified, whose ownership is disputed, or that draw on traditional cultural expressions with no single owner at all.

In other words: a preemptive measure for hypothetical disputes in the future.

That said, instead of repurposing the same ‘solution’ of creating a new agency every time something doesn’t work, we think the lawmakers should look into:

• fixing what already exists by revitalizing the LMKN and the CMOs beneath it instead of replacing it wholesale; and

• expanding provisions for direct licensing, not as a replacement for blanket licensing but as a supplement for specific cases.

A performer like Vidi, requesting a direct license to cover one song from a composer’s catalog, wouldn’t have eliminated the need for blanket licensing elsewhere. It would have instead settled that one dispute in advance.

Until then, royalty disputes will always be a matter of when, not if. The new Law presents crucial momentum to get things right, but perhaps the bigger question is: Who does copyright law actually want to protect?

Now go ahead. Cue the music in and let’s sing the rest of that Nuansa Bening chorus.

— ♪ Akan kukembangkan
Kasih yang kau tanam
Di dalam hatiku~ ♪

While the Indonesian music world is still battling through performing rights distribution disputes, a new big question awaits to be tackled: Artificial Intelligence (AI)-generated artworks. How would the revision to the law protect artists’ works, including music, from AI? We will get into that question in the second part of this series in two weeks.

Credits:

Writer/Researcher:

Editors: , ,

Visual Designer:

A livestream on the Presidential Secretariat’s YouTube channel was stopped abruptly after President Prabowo Subianto, in a meeting with Chamber of Commerce (Kadin) members at the State Palace on July 31, mentioned that he had heard that Iran possessed nuclear weapons. He went so far as to speculate that Saudi Arabia, the UAE, Qatar, and Egypt would likely seek them too. These off-the-cuff remarks he clearly had never run past anyone, prompting the technical team to cut the livestream to show a government ad and remove the segment from its official archived recording.

Within the next few days, the Iranian Embassy in Jakarta issued a formal statement denying the allegation on Instagram, insisting the country has “never pursued the possession of nuclear weapons.” Analysts pointed out that the unverified claim parroted allegations historically used by the United States and Israel to justify military posture, directly contradicting findings from the International Atomic Energy Agency (IAEA), which has found no evidence of a coordinated Iranian weapons program.

Prabowo did hedge his claim in that meeting by stating “it is said that [Iran has nuclear weapons],” but a head of state floating nuclear rumors to a room full of businesspeople fails to register that his “casual” remarks could instantly propel a diplomatic nightmare.

A pattern of “errors”

It is not the first time Prabowo’s “slip of tongue” has outrun diplomatic restraint.

In June 2023, while serving as Defense Minister, Prabowo delivered a presentation on Indonesia’s defense concept called “Trisula Perisai Nusantara” or the Nusantara Shield of Trident. He displayed a slide showing the 300-kilometer reach of Indonesia’s ballistic missiles, explicitly mapping Singapore, Australia, and the Philippines within the targeting radius.

Publicly diagramming neighboring partners within your strike zone is precisely the kind of imagery ASEAN foreign ministries spend decades trying to avoid. Broadcasting visual maps that imply neighboring partners sit in your crosshairs sends a tone-deaf message: we could hit you if we wanted to.

The thread connecting the missile map to the nuclear remark is a disregard for the basic mechanics of global statecraft, in which a single phrase alters deterrence, triggers formal inquiries, and demands immediate damage control.

Prabowo is the foreign policy

Prabowo has made it quite clear that Indonesia’s international posture is run by him and him alone, effectively sidelining the diplomatic bureaucracy and bypassing the institutional checks built into the Indonesian Foreign Ministry.

But if one insists on playing the role of chief diplomat and taking full ownership of the nation’s foreign affairs, one needs to actually act like one, which means exercising basic diplomatic discipline, exercising restraint, and watching every single word that one uses in formal meetings.

There is no walking back an offhand comment once a foreign embassy is forced to issue a formal denial and international observers begin questioning why the president’s information conflicts with international atomic inspectors. In global politics, “unfiltered” is synonymous with “reckless.” Clumsy commentary risks alienating strategic partners, entangling Indonesia in foreign disputes, and eroding Jakarta’s reputation as a dependable, rational mediator.

Two things to course correct

We are not saying Prabowo should cease being an active and hands-on leader on foreign policy. Instead, we believe he should re-establish basic operational discipline to protect the country’s strategic interests.

First, the president needs to empower and “reintegrate” with the Foreign Ministry.

The ministry must have a real seat at the table before the president delivers speeches touching on foreign militaries, nuclear programs, or contested territories; not afterward, when the job has shifted to damage control. The administration must return institutional advice and diplomatic vetting not as bureaucratic hurdles but strategic assets.

Second, Indonesia must institutionalize speech discipline.

Someone close to the president must be able to intervene before he walks on stage, ensuring that unvetted lines about foreign weapons programs do not make it into strategic or formal speeches. When discussing sensitive international affairs, adhering to prepared remarks and reading off the prompter is standard operational discipline practiced by world leaders to safeguard national standing.

Personal charisma has its place in global governance, but it must be anchored by institutional rigor. That is the difference between a leader who improvises with impunity and one who gets to keep improvising because he is disciplined about where he does it.

Want to share your views on public policy reforms or other recent political issues?

Write to us: connect@thinkpolicy.id

What a ride this 2026 has been. We are only halfway through the year, but The Reformist has grown plenty, and for that we are immensely grateful to you! Since last August, we have doubled our subscriber base and almost quadrupled our viewership.

We didn’t expect this remarkable growth when we first released our first 2026 edition of The Reformist, predicting the moves of the current administration. While most of what we predicted came true, for better or (mostly) for worse, it has been a joy to see that our articles have resonated with all of you.

From niche topics like grassroots development in the sports industry and urban housing, to the country’s seven macroeconomic sins and solar energy ambition, we promise to keep publishing well-researched pieces to offer you new insights into the way Indonesia functions.

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For most of you reading this article, government social aid or bantuan sosial (bansos) is perhaps something you’ve only seen in the news. Different versions of it can be traced back to at least three decades ago, right after the 1997 Asian Financial Crisis. It mostly came in the form of distributing essential goods to the lowest-income households, crafted and delivered by policymakers who decide what is best for a social class they don’t belong to.

That’s probably why we still see rice bags with the smiling face of a politician plastered on them and cash transfers handed out just before election day.

But for over 23 million people still living below the poverty line, bansos is not a political chip. It’s what makes life just a little bit more tolerable for the country’s neediest.

The evolution of bansos has attracted serious attention among researchers worldwide. Esther Duflo and Abhijit Banerjee, the 2019 Economic Nobel Prize winners and co-founders of the Abdul Lateef Jameel Poverty Action Lab (J-PAL), built their careers on conducting intensive studies to monitor and evaluate the 30-year lifespan of bansos programs.

In those three decades, Indonesia’s social aid system has reinvented itself many times over. This is the story that this edition of The Reformist invites you to explore across three key regimes: rice distribution, cash transfers, and digital reform. It is essential to acknowledge and learn the rigor and planning required to launch each of these initiatives, because good enough won’t cut it.

I. The rice subsidy era: A need for speed

Modern social aid programs in Indonesia began in response to the 1997 Asian Financial Crisis. The newly appointed B.J. Habibie administration initiated an urgent program called the Special Market Operation (Operasi Pasar Khusus, or OPK) to create a social safety net for low-income households to cushion the effects of the economic crisis.

Back then, the government decided that rice was the most essential to ordinary Indonesians’ everyday lives, so rice became the centerpiece of this program; distributed to the lowest-income households across the country.

OPK allowed every eligible household to purchase 10 kilograms of rice every month at Rp 1,000 per kilogram — 50 percent cheaper than the Rp 2,000 per kilogram market price at the time.

The program was launched on 1 July 1998, under the leadership of the State Logistics Agency (Bulog), using population datasets from the National Population and Family Planning Board (BKKBN), and employing local government officials across 27 provinces to distribute the rice en masse.

What is perhaps most striking about OPK was the variables the government used to decide who received the rice packages. Because it had used BKKBN’s data as its basis, the program also used the institution’s economic classification system.

The lowest tier in BKKBN’s system was the “pre-prosperous family” (KPS), households that fail to satisfy one of these five seemingly arbitrary variables:

1. Eating at least twice a day.

2. Living in a house with flooring (not dirt).

3. Wearing different sets of clothes for work and leisure.

4. Taking a sick child to a clinic rather than a shaman (dukun).

5. Performing basic religious observance according to each family’s faith.

However crude these requirements may look today, the BKKBN identified over 7.3 million households — 15 percent of the entire Indonesian population at the time — belonging to this social class. Due to the financial crisis, the list grew to 12.8 million after more families fell into the KPS category.

What worked: Working with what we had to achieve the goal

As hasty as the program was, OPK was successful in what the program was primarily designed to do: deliver rice quickly to as many people as possible, en masse.

An evaluation report by the SMERU Research Institute in 1998 found no evidence of people stealing and reselling rice, though it found several “leakage opportunities”, and that the delivery and purchase of rice in some provinces were done adequately.

We understand why the government chose the BKKBN data for OPK, as it had already mapped the then-three-decade-old family planning program. They used the best available datasets they had, but it was simply not built for the problem they were trying to solve.

Read The Reformist’s volume on Indonesia’s family planning program here.

Importantly, the overall supply of rice from Bulog also remained sufficient throughout the program, despite the high demand in such a short timeframe (though the quality of the subsidized rice was not the best). Much of that supply readiness can be attributed to how social aid was carried out during the New Order regime.

Before 1998, rice distribution programs were supply-focused. The government targeted farmers and crop producers to increase the country’s overall rice supply by providing easy credit and fertilizer subsidies to increase productivity. The goal was to keep rice prices low, ensuring that this essential good remains accessible for the majority of Indonesians.

This New Order-era state intervention sought to reduce poverty through a trickle-down effect via job creation and easy credit lending, instead of direct aid.

But then the 1997 financial crisis shifted the way the Indonesian government sought to help its citizens. From then on, social aid programs became more beneficiary-facing, directly providing basic goods like rice to lower-income households.

What didn’t: Everything else

Unfortunately, everything else about the OPK program was lackluster.

Coordination between central government institutions and on-the-ground field workers became a major problem. Field workers updated household statistics every month, raising the number of eligible households to 12.8 million by October. But the central government continued planning and allocating rice against an outdated BKKBN count of roughly 8 million households, causing uncertainty for central-level planners and on-the-ground workers.

Mistargeting became the most severe issue. Despite a large number of recipients, it was often the case that poor households that most deserved rice did not end up receiving an OPK package. BKKBN’s criteria were more a reflection of asset-based proxies than the individual expenditures of a household’s actual income or consumption. A family can still be poor in every other aspect despite living in a house with proper flooring.

BKKBN’s database also excluded households that weren’t the conventional married nuclear family (since the data was originally meant for family planning, not social aid). Widows, divorcees, and groups of unmarried individuals were thus systematically left out of consideration for the program.

A large factor in the mistargeting problem also lies in local leader discretion. Because local leaders (like village heads) were responsible for distributing rice to individual households, rice distribution became unequal and largely discretionary. Elite capture had perverted the program implementation.

A 2001 evaluation study of OPK found that local village heads would typically ignore government-created lists entirely and disburse rice depending on who they personally saw fit. Some villages targeted the rice well while others simply divided it evenly among all households regardless of need. Village heads argued that the BKKBN’s lists failed to recognize which families were actually poor in the locality, causing them to act on their own judgment.

Lastly, this program required households to pay in cash for their subsidized rice. This made it more difficult, especially for the poorest ones, as they had no cash to purchase their monthly allocations to begin with. As a result, the program grew a backlog of excess rice that was needed by many who simply couldn’t afford to pay for it. The excess then ended up in the hands of more affluent households who had cash to spare, defeating the purpose of the entire program.

An unripe evolution

For an initiative that had to roll out quickly due to the threat of an unexpected crisis, the way OPK was disbursed in a rational, data-driven (however arbitrary the criteria), and organized manner is somewhat a commendable feat. So it wasn’t a shock that the program continued to exist even after the economic crisis ended.

In 2002, the government doubled down on the “rice” tag and renamed OPK into the Rice for the Poor program, or “Raskin”. In this new era, the government began experimenting with new ways to deliver social assistance programs.

BKBBN datasets were eventually scrapped in favor of the growing Statistics Indonesia (BPS) agency, and the government began to conduct periodic censuses to regularly update the conditions of poverty in the country.

Despite procedural overhaul, non-poor households kept on receiving subsidized rice that wasn't meant for them. In 2005, poor households accounted for only 25 percent of Raskin subsidies, whereas the remaining 75 percent went to non-poor households. By 2010, little had changed as around 70 percent of Raskin’s total beneficiaries were still non-poor.

II. The cash transfer era: PKH and BPNT

Public policy researchers and policymakers have long recommended direct cash transfers as a better, cost-effective, and result-yielding alternative to in-kind distribution schemes in which goods are transferred from the government to households.

The first Direct Cash Transfer (BLT)

The first breakthrough came under President Susilo Bambang Yudhoyono’s (SBY) administration. In the wake of rising fuel prices in 2005, the government rolled out its first unconditional cash transfer program called Direct Cash Transfer (BLT), distributing Rp 1.2 million per household over the course of the year.

In this program, BPS was entrusted with identifying eligible households. The statistical agency conducted a basic national health and education survey, the SDKP, and found over 19.1 million households eligible for the cash transfer program.

Critics, however, argued that the program falsely targeted households that were vulnerable yet remained above the poverty line. They were afraid that this would create a practice of dependency on the program and that the additional income would instead be used for non-essential goods like alcohol or tobacco.

The Family Hope Program (PKH)

This one-off cash distribution scheme paved the way for the creation of the Family Hope Program (PKH) in 2007. Instead of “universal” coverage, PKH was turned into a conditional cash transfer program meant for the extreme poor (people living below 80 percent of the poverty line). Households are only eligible if they meet certain criteria and abide by strict conditions to receive money for a sustained period.

When designing PKH, the Indonesian government took inspiration from a largely successful conditional cash transfer scheme in Brazil, called the Bolsa Familia. Formally introduced in 2003 by then-and-current Brazilian President Luiz Inácio Lula da Silva, Bolsa Familia consolidated four of Brazil’s existing cash transfer programs into a single poverty aid scheme.

Bolsa Familia has been noted as generally successful in increasing household consumption, reducing rates of childhood stunting, and reducing overall poverty in Brazil.

Copying Brazil, Indonesia launched the program under the leadership of the Social Affairs Ministry. PKH was novel in its function and delivery.

Beneficiary households were initially intended to stay in the program for two to four years, over which PKH aimed to reduce poverty, child malnutrition, and work participation. While benefiting from this program, households were expected to boost consumption of high-energy and high-protein foods, as well as raise their children’s educational attainment and school attendance rates.

To keep receiving their quarterly transfers, recipients had to meet conditions such as frequent health and prenatal checkups for pregnant women, complete childhood immunization and health checkups for families with children aged 0 to 6, and school enrollment and high attendance for those with children above the age of 6.

Each family receives a range between a minimum of Rp 600,000 and a maximum of Rp 2.2 million in quarterly payments. The more children a family has in the house, the higher the nominal amount they get. The cash is delivered and received through the post office, cutting out an intermediary figure who may use their discretion in bad faith.

When the program first piloted in 2007, PKH covered 300,000 families across seven provinces. By 2025, that number had skyrocketed to over 10 million households across the entire country.

How PKH solved Raskin’s mistargeting but exposed a new problem

While PKH and Raskin served two different goals, the former was able to mitigate mistargeting in ways that matter.

One 2019 study evaluating both programs found that Raskin suffered a significant inclusion error, meaning households who weren’t supposed to receive rice ended up eligible. Raskin reported beneficiaries of up to 35 percent of all Indonesian households, overshooting its 22 percent target.

PKH, on the other hand, did not suffer the same fate. Instead, it failed to include more families in the program. The same study found that PKH was only able to reach 9 percent out of the desired 14 percent of Indonesian families (this finding says more about the difficulty of reaching the poorest households than it does about targeting).

BPNT, an evolved Raskin?

Even with the introduction of the PKH, the Raskin program continued well into the Joko “Jokowi” Widodo presidency. The program was renamed to Rice for Welfare (Beras Sejahtera, Rastra) in 2015. The name swapped out the word “poor” for “welfare”, for a more optimistic tone. But this name change was largely cosmetic, offering little systemic change to the operationalization of the social aid program.

All the way up to 2017, the price for this program’s subsidized rice hovered at around Rp 1,600 per kilogram, despite two decades’ worth of inflation and the market price of rice leaping to approximately Rp 9,000 per kilogram.

It was in this year that the government only began implementing structural reforms to Raskin/Rastra. The theory: if rice was prone to local discretion, then it would be best to take that decision-making away from local leaders completely.

So what they did was replace the goods distribution system with a food voucher program called the Non-Cash Food Assistance Program (BPNT). During this transition period, the government also made Raskin/Rastra rice free before the new program kicked in nationally. In addition to rice, this new program also allowed for the purchase of eggs as an additional source of protein.

Instead of receiving rice directly from local leaders, each eligible household is given a Rp 110,000 monthly voucher that is transferred to a debit account owned by a female adult in the household. The figure was set slightly above the market price of rice at the time of the program’s launch (approximately Rp 9,700 per kilogram) to compensate for additional logistical costs, since rice is not distributed directly to households as was the case for Rastra.

For BPNT, individual households must now travel to local shops set up in each village to redeem their vouchers in exchange for goods. For each purchase with a voucher, the corresponding amount would be deducted from the voucher’s remaining credit.

The change to set up shop in localities resulted in cheaper administration costs for the overall program. Whereas for every rice package delivered under Rastra, the delivery took 4 percent in administration fees; BPNT only cost the government between 0.75 and 2 percent.

Importantly, these vouchers cannot be withdrawn from a bank account and can only be redeemed to purchase rice and eggs found in local shops, limiting misuse of funds.

The change from Rastra to BPNT was also met with local resistance, especially from representatives of Indonesia’s outer regions. Heading into 2019, the Rastra program was to be officially discontinued, but Papuan representatives pushed back on the change on the basis that the Rp 110,000 voucher would be ineffective in a region like Papua where 10 kilograms of rice could cost up to Rp 400,000.

Despite this pushback, the program ensued. At the macro level, the program was successful in generating better results than Rastra. A 2021 evaluation study that compared BPNT districts to those that were still running Rastra found that targeted households received 45 percent more assistance in voucher regions than in in-kind districts, and among the poorest households the poverty rate fell by 20 percent.

III. Bansos today: Wicked problems, digital solutions?

The underlying denominator for every social aid program that has appeared over close to three decades is the government’s adaptability in seeking the best data available.

When the Habibie administration launched OPK, it used data from the BKKBN because it understood that the agency had three decades’ worth of population data from its family planning program.

When BLT came around, BPS had started to set its mark as the government’s go-to database provider. The government continued to update its targeting procedure, but the problem remains that a national census can only be done periodically, is expensive to run at scale, and fails to catch up with the living conditions of individual households as time passes.

This is where the current era’s reform package becomes interesting. There are now greater opportunities for a demand-driven social aid program in the age of digitalization and artificial intelligence. Under the current administration, the Digital Transformation Acceleration Committee (KPTDP) has stepped forward as the agency responsible for these digital reforms.

The new system’s novelty is in the paradigm shift. Instead of relying on the government to begin, plan, and distribute social assistance, whether it be rice or e-vouchers, eligible recipients can now request them on-demand. A mix of self-targeting and institutional cross-checks.

Through a digital portal, individuals will only have to sign up with their identity card and credentials. Afterward, the system will take over, cross-checking an individual’s living conditions through BPS’s new central welfare database (DTSEN) decile classification, employment and income records via the Workers Social Security Agency (BPJS Ketenagakerjaan), chronic illness status via the Healthcare and Social Security Agency (BPJS Kesehatan), bank account activity, and land and vehicle ownership.

The graph below helps better explain the registration process of this new digital system.

For PKH, this means an already pregnant mother would not have to go to the post office to receive her quarterly checks. If they also happen to be part of the BPNT program, e-vouchers would be distributed instantly within the same distribution cycle. For individuals without smartphones, extension workers will be deployed to aid in the registration process.

Since the end of 2025, the agency has been conducting a pilot program in Banyuwangi, East Java, to test run this system for both PKH and BPNT. Since then, the results have been noteworthy.

The pilot program drew over 300,000 registrations. Of that total, 44 percent of BPNT applicants and 30 percent of PKH applicants were deemed eligible. What is most striking is the PKH figure in absolute values. Over 87,386 households were eligible for the PKH program, over double the number of existing PKH recipients in Banyuwangi at 40,028, and more than the city’s 54 thousand quota if the DPI numbers were adopted.

This means that not only has PKH suffered a massive exclusion error, but government predictions on just how many poor households there are in this country are also staggeringly low. Nonetheless, the program’s findings highlight the potential of what a fully digital and integrated social assistance program may look like.

It also remains to be seen whether this digitalization program can reproduce the same effects for other districts and villages over the long-run. With the Banyuwangi pilot project done, the agency has announced that it will expand the pilot program to 143 new cities and regencies to further socialize and stress-test the new system.

Lessons from the past, present and future

For the better part of this three-decade evolution, Indonesia has flipped the switch on how it delivers aid to the poorest citizens in the country. It has been a long and tumultuous process, but it is one filled with technocratic and policy-making rigor.

While reform stories like these usually take a back seat to high-stakes corruption cases and geopolitical news, it is important for us at The Reformist to highlight major reforms that have taken place and are currently taking place in Indonesia.

The three decades’ worth of persistent political support of the programs, despite regime changes, shows that a pro-poor program can withstand the test of time. While we are not naive to the fact that these programs have been misused by those in power to expand and secure political capital at the grassroots level, the ongoing reforms to the program show that at least real efforts are being made to raise the living conditions of Indonesian citizens.

Instead, the call to action is for Indonesia’s political leaders to protect these programs from partisan agendas. It shouldn’t be the case that social aid only makes the news when rice packages are plastered with faces of presidential candidates or that subsidies are rolled out months in advance to appeal to the electoral cycle.

Moreover, as the government continues to upgrade these programs, critical questions arise in this new age of digitalization. What happens if the data is wrong? What if the machines and algorithms make false assumptions about who should and shouldn’t receive aid? What if the lack of integration across the government’s many databases renders someone ineligible merely due to administrative mix-ups?

These are some of the most crucial questions that digitalization reforms must answer, or risk repeating the same mistakes of their predecessors. It is good that the government continues to evolve its social aid programs at a technical level. But technical improvements must come with a clear strategy to distribute bansos equally and equitably.

Perhaps in a year’s time, we can return to this topic with new information and evaluation notes. Perhaps by then, we will be looking back at this volume as nothing more than a cautionary tale — as real material benefits have been delivered in even greater numbers to the country’s neediest.

We’d like to hear from you: What do you think about the new plan to digitally reform bansos planning and implementation? Will technology solve the problems of past programs, or will it become a new barrier? Let us know in the comments!

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Public sector reform in Indonesia often seems like a myth. Yet, true reform occasionally takes place, as we’ve seen in Bank Indonesia (BI) under Perry Warjiyo’s leadership. When he exited the governor post on 25 July after 8 years, the central bank bid farewell to one of its most consequential technocratic leaders.

His early departure comes as a shock, though it should not be surprising considering the familiar political theater. In May, a member of parliament demanded Perry’s resignation in a hearing amid volatile global markets and a plummeting rupiah. He was a convenient scapegoat, but currency fluctuations — driven by global capital flows and by investors’ trust — are not personal failures of the central bank governor.

But history will judge Perry not by the daily exchange rate ticker, but by the institutional resilience Bank Indonesia strengthened during his tenure.

The stability we took for granted

BI’s primary mandate (at least until the passing of the recent P2SK law) is very simple: to maintain the stability of the rupiah’s value, or to keep inflation under control. Under Perry’s watch, this mandate was executed with a masterclass in quiet discipline.

Think of the shock from the Covid-19 pandemic. Indonesia managed to navigate the storms of fractured global supply chains and disrupted economies without spiraling into hyperinflation. Through calculated measures, BI kept the macroeconomic ship upright. For instance, it successfully balanced the “burden-sharing” mechanism with the Finance Ministry without undermining their independence.

The political dividends of this stability are often underestimated. Much of the enduring public approval enjoyed by the Jokowi administration can be traced directly to kitchen-table economics: that ordinary citizens could still afford basic goods.

Contrast this with the political turbulence seen in Western democracies, such as the United States, in which the Biden administration suffered severe electoral and public approval battering primarily due to raging post-pandemic inflation, which eventually led to the second election of Donald Trump.

In Indonesia, consumers were largely spared that trauma. BI under Perry left the economy unscathed, proving that prudent monetary management is the ultimate social safety net.

The digital payments revolution

If keeping inflation under control was the bare minimum expectation for a competent central bank governor, the true and indelible legacy of BI under Perry’s leadership lies in our digital payments infrastructure.

For decades, developing countries have remained digitally “colonized” by foreign financial gatekeepers. Over the past decade, Bank Indonesia increasingly treated payment infrastructure as strategic national infrastructure rather than simply financial technology. The National Payment Gateway (GPN), for example, reflects that long-term institutional vision. While the GPN was conceived before Perry Warjiyo took the helm, it was under his tenure that the initiative was institutionalized into a nationwide payment backbone, keeping domestic debit transactions within the country and reducing reliance on international payment networks such as Visa and Mastercard.

The strategic foresight of this move cannot be overstated. One only needs to look at Russia — where Western sanctions abruptly severed citizens from international payment rails overnight — to realize how vulnerable a digitizing nation is without domestic redundancy. This means Indonesia built its own fire escape before the fire even started.

Then came the retail payment system BI-Fast and Standard National Open API Payment (SNAP), which systematically lowered friction, driving down transaction costs, and knitting a fragmented archipelago into a real-time financial ecosystem.

Yet, the crown jewel of this revolution is obviously the Quick Response Code Indonesian Standard, or QRIS.

In the early days of the digital wallet boom, private sector giants like GoPay, OVO, and DANA each introduced their own proprietary QR codes, threatening to fracture the market into competing walled gardens. The masterstroke of BI under Perry was not inventing the QR payment, but excellent regulatory coordination. QRIS transformed a chaotic corporate race into a unified public utility.

Today, QRIS bridges the entire economic spectrum: it powers high-end retail boutiques just as effortlessly as it empowers street-side bakso vendors. Adoption has scaled to such a degree that urban discourse has fundamentally shifted. We are no longer debating how we might expand financial inclusion to small vendors. We are now debating whether vendors should be allowed to only accept QRIS and not cold hard cash. This shift was not an accident of the free market. It was engineered through deliberate, long-term regulatory orchestration by BI under Perry’s leadership.

A reformist’s legacy

As Perry Warjiyo exits the central bank, he leaves behind a large pair of shoes to fill. He proved that a state institution can be both fiercely disciplined and radically innovative, defending the citizens’ wallets from global crises while aggressively launching the nation into a cashless future.

Amid the noise of political grandstanding and short-term currency jitters, the broader picture is crystal clear: Indonesia’s financial resilience today is built on the foundations he laid. BI under his leadership offers a rare example of reformist governance in practice. In a political environment often consumed by short-term pressures, that may ultimately be his most enduring contribution.

When Lee Kuan Yew set out to build modern Singapore, he didn’t start with tax incentives or infrastructure. He started with the legal system. No investor, business, or citizen trusts a state where enforcement depends on political patronage or executive whim. Legal certainty wasn’t a byproduct of stability for Singapore, it was the precondition for both.

Indonesia’s official creed of course is that we are a negara hukum, a rechtstaat, a constitutional state governed by law. The Febrie Adriansyah affair says otherwise. What Tempo’s Bocor Alus reporting describes isn’t a rechtstaat at all, but a machtstaat or power state operating in plain sight: legal status negotiated behind closed doors, law enforcement agencies acting as rival fiefdoms, and the president stepping in to insulate his own people from accountability.

Febrie, until recently head of the Attorney General’s Office (AGO) for extraordinary crimes (Jampidsus), came under police investigation for alleged bribery and money laundering connected to the Asabri and PLN coal procurement cases. Police seized 74 kilograms of gold and nearly half a trillion rupiah in cash. That should have been the start of a straightforward prosecution. Instead it set off a scramble to manage the politics before the law could catch up.

Tempo’s reporting lays out the mechanics: Defense Minister Sjafrie Sjamsoeddin and other insiders lobbying President Prabowo Subianto directly, trying to keep Polri from naming Febrie a suspect, or at least to move the case back under the Attorney General’s own roof where it could be handled more quietly. Tempo also reported that businessmen linked to the case were approached to claim the seized gold as their own, a way of pulling the evidence out of Febrie’s orbit without anyone having to explain where it actually came from.

And eerily, what actually drove the president’s involvement wasn’t a concern for the investigation’s integrity but desire to keep the story from becoming political noise, or kegaduhan.

The people behind criminalizations

We’ve written before about how prosecutorial power in Indonesia gets aimed selectively at business and public officials alike. This case shows where that architecture breaks down: the same agency wielding those tools against everyone else claims the same informal immunity the moment its own leadership is the target.

Part of what makes that double standard so galling is how aggressively the AGO, and more specifically the Jampidsus office has been willing to stretch the law when the target is someone else. Articles 2 and 3 of the corruption law were written around the idea of state loss, the kerugian negara. In recent years, prosecutors from the AGO office have leaned on a reading loose enough to bring charges without much more than a policy decision that went badly or a business call that, in hindsight, cost the state money. Actual enrichment, a bribe, a kickback, a diverted asset, has become almost optional. The mere existence of a loss, however indirect or contested the accounting, has been enough to build a case on.

That’s the same expansive reading that turned a business-judgment dispute into a headline corruption verdict, and it’s the same one that keeps company executives negotiating with the AGO rather than the courts, because the line between a bad deal and a crime has gotten so blurry that nobody wants to test it in front of a judge. When the standard for what counts as corruption is this elastic, the agency applying it holds enormous discretion over who gets charged and who doesn’t.

And this is where the Febrie case cuts deepest. If the unit running these prosecutions is itself compromised, the public has every reason to look back at Jampidsus’s own high-profile arrests. Was that businessman charged because the evidence held up, or because he didn’t funnel enough gold to Febrie’s acquaintances? An agency running enrichment cases on a loose reading of the law loses all credibility to do so the moment it turns out the people bringing those cases were taking gold themselves.

We need to clean house

Fixing this isn’t a matter of reshuffling personnel or issuing a statement. The most basic problem is structural: we can’t expect the AGO to police itself, and right now that’s effectively what’s happening whenever the target is one of its own. If Jampidsus is compromised, that should be a KPK case, not an internal AGO matter, the same way we wouldn’t ask a police precinct to investigate its own commander for taking bribes.

What this actually calls for is a president willing to clean house, starting with Jampidsus itself, and treat legal certainty as something worth more than avoiding a bad news cycle. Prabowo built his campaign on promises of law enforcement without fear or favor. This is the test of whether that meant anything, or whether “no fear or favor” stops the moment the favor in question is his own.

Prabowo has set his sights on 8 percent economic growth. That number doesn’t happen without investors trusting Indonesia’s legal system enough to bet on it for the long haul. Unless legal reform becomes something the president takes as seriously as the growth target itself, the only 8 percent he’s likely to hit is his approval rating.

Back to Mr. Lee, he decided that Singapore would keep the Judicial Committee of the Privy Council in London as its final court of appeal long after independence to give “foreign investors a guarantee of impartiality that local courts alone couldn’t offer yet”. We are not suggesting Indonesia outsource its law enforcement or judiciary like Mr. Lee did, but we do need to do something.

Whenever an agreement is signed, whether for a trade deal, Foreign Direct Investment (FDI), or defense procurement, there is almost always a clause on knowledge transfer, capacity building, or what some call ‘offsets’. It has become customary among negotiators, officials, and delegations alike, while ministers often announce it as a major win.

But what of its implementation? In practice, the clause may shrink to a mere operational training program. Or to a group of engineers spending two weeks at a foreign factory before returning home to operate the same machine with the same instructions. This is where the real question begins: what is knowledge transfer actually supposed to achieve, and why should Indonesia revisit it as both an engine of economic growth and a pathway out of the middle-income trap?

Learning to “catch up” from East Asian countries

For developing countries, the importance of knowledge transfer lies within the convergence hypothesis. Economists often refer to it as the “catching-up effect.” The basics are simple: developing countries begin with low income levels, then they grow faster for several decades than countries that are already developed, eventually narrowing the gap. How? These developing countries absorb and adopt technologies that advanced economies spent decades building.

We have witnessed this pattern before. Japan rebuilt its industrial base after World War II by licensing foreign technology, systematically building domestic R&D capacity, and graduating from imitation to innovation within a generation.

Or, as the saying goes: “amati, tiru, modifikasi” — observe, imitate, modify.

South Korea followed a similar path through state-directed industrial policy, investment in human capital, and efforts to push up the value chain, from textiles to semiconductors and automobiles. More recently, China rose by leveraging market access to extract technology transfer commitments from foreign firms while simultaneously building domestic capabilities.

All of them displayed a familiar economic arc: poor beginnings, decades of high-speed growth, and eventual convergence toward the more stable, though slower growth patterns characteristic of developed economies like those in Europe

But what about Indonesia? Our country has started this journey as well. Indonesia entered upper-middle-income status in 2023, with a GNI per capita of approximately US$ 4,810 (the high-income threshold is around US$ 13,935). With growth hovering around 5 percent in recent decades, the catching-up effect remains, but is not strong enough. To escape the middle-income trap, Indonesia likely needs growth above six percent, which means we need stronger and more sustainable growth engines.

An engine that actually drives growth: Total Factor Productivity

According to basic economic theory, output is driven by capital, labor, and a residual factor that cannot be fully explained by the first two, which economists now call Total Factor Productivity (TFP), where knowledge, technology, innovation, and institutional efficiency reside.

This is where the Indonesian story becomes interesting. Data from the Penn World Table (PWT) show that Indonesia’s output per worker has remained sluggish (hovering below 2 percent) since 2019, while TFP growth has largely stagnated. A study published by Universitas Indonesia also found that Indonesia’s human capital growth has been among the weakest among peer countries, while economic growth has remained concentrated in a limited number of sectors.

This is deeply connected to our discussion on knowledge transfer. Put simply, when we talk about improving productivity, we essentially talk about raising TFP. Physical capital like toll roads, factories, ports, and machinery will eventually face diminishing returns. Labor expansion also has limits. But TFP, if managed correctly, can continuously raise the productivity of both capital and labor. Knowledge transfer, when done properly, is one of the mechanisms that drive TFP growth.

Knowledge flows like water, but our “pipe” is narrow…

There is, however, an important caveat in the catching-up literature: technology does not transfer automatically. Even if foreign parties are willing to transfer it freely, which many are not, the knowledge behind any technology flows like water through a pipe. The width of that pipe can be understood as absorptive capacity: the ability of a country’s firms, workers, and institutions to receive, understand, adapt, and build upon foreign knowledge. A country with weak absorptive capacity may receive massive inflows of FDI and still extract very little meaningful knowledge or technological gain from it.

Absorptive capacity itself rests on at least three foundations: human capital; R&D investment; and institutional quality.

A technically skilled workforce improves the ability to absorb knowledge. Firms and universities engaged in active research can adapt technology tailored to local conditions. Strong institutions can create incentives for innovation through legal, regulatory, and market frameworks.

Indonesia still faces significant challenges in all three areas.

On R&D spending alone, Indonesia allocates only around 0.28 percent of GDP, roughly the same level as in 2019 and 2020. Compare this with South Korea at 5.32 percent, Japan at 3.4 percent, and China at 2.65 percent. Even Thailand, our peer in the upper-middle-income group, allocates more than 1 percent.

Some studies also find an uncomfortable reality: R&D spillovers from multinational corporations (MNCs) can negatively affect domestic firms’ TFP due to intense product-market rivalry. In other words, foreign firms do not automatically create learning effects for local industries. Without domestic capability, they may simply dominate the market instead.

What are we missing?

The simplest diagnosis is that Indonesia is underinvesting in its ability to absorb knowledge transfer.

The discourse on knowledge transfer in Indonesia has remained fixated on the operational and managerial capability. How do we run this turbine? How do we follow these safety protocols? These are important questions, but they are questions about operating technology, not creating it. The deeper layer that separates a technology-adopting country from a technology-creating one involves understanding why the machine works the way it does. This includes the ability to modify it for local conditions and eventually design a better one ourselves.

Most training programs, operational courses, and manuals only transfer codified knowledge: procedures, modules, instructions, and technical documentation. But tacit knowledge is different. It lives inside the minds of engineers, researchers, doctors, and practitioners who have spent years solving problems in the field. It cannot be transferred through a two-week training session alone.

Tacit knowledge moves through deep collaboration, co-research, joint ventures, and sustained local involvement in real problem-solving processes. This is where the core ideas actually reside. Yes, Indonesia demands training programs from foreign firms, but often captures only the codified layer of knowledge and leaves the tacit layer untouched.

Decades later, despite numerous investment agreements, we may still find ourselves dependent on expatriate engineers for the most technically demanding operations within our own strategic industries.

What should we do?

This brings us back to the original point: Indonesia must revisit what actually constitutes knowledge transfer under agreements. Should the standard simply be operational training, or should it require measurable transfers of technical capability? There should be a stronger emphasis on joint R&D provisions, co-authorship in patents, localization of core engineering functions, and long-term collaboration between foreign firms and Indonesian researchers.

Indonesia’s downstreaming agenda is a promising start. But the goal should not stop at smelting nickel in Sulawesi (onshoring). The long-term objective should be to ensure that Indonesian engineers are eventually capable of designing the smelting process itself.

Scaling up R&D investment is also essential. Reaching at least 1 percent of GDP should be treated as a minimum target. We agree we have fiscal constraints, but incentives for private-sector R&D can be expanded, for example, through tax policy. Institutions such as BRIN should also be more closely aligned with industry-linked research that has clear commercialization pathways.

At the same time, Indonesia must better utilize its demographic bonus while addressing the mismatch between universities and industry. Prioritizing which technologies to pursue is equally important. As the World Bank has repeatedly argued, escaping the middle-income trap requires combining investment with both the absorption of foreign technology and the development of domestic innovation.

Thus, Indonesia cannot, and should not, attempt to catch up across every technological frontier simultaneously. Instead, we need a technology prioritization framework built around sectors where Indonesia possesses natural endowments, market scale, and demographic leverage: green energy technology, agri-food processing, and digital infrastructure.

In short, capital multiplied by labor becomes far more productive when boosted by TFP.

The knowledge transfer clause should be seen as an entry point, an institutional mechanism through which TFP can be seeded. But this only works if knowledge transfer is treated seriously, not as a diplomatic gesture or a checkbox requirement. It must instead be understood as a vehicle for one of the most consequential transformations available to a developing country: the shift from importing other people’s technology to creating our own.

Our founding fathers’ dream of a prosperous Indonesia will not be realized through the accumulation of machines and workers alone. It will be realized when Indonesian engineers, researchers, and entrepreneurs produce the knowledge that future agreements will require others to transfer.

Want to share your views on public policy reforms or other political issues?

Write to us: connect@thinkpolicy.id

In this new episode, Ray and Afu challenges the Minister on one main tenet: How can the government protect the most fragile workers in Indonesia?

This episode will give you a glimpse into the inner workings of the Manpower Ministry and the policies that shape the day-to-day lives of Indonesia’s 155 million labor force.

From policies that aim to increase adoption of the state’s social security for those most vulnerable, embracing the “informal” workforce tag, to redefining the industrial relationship between employers and employees, this episode will give you plenty to work with to dissect this often underreported realm of Indonesia’s governance further.

Enjoy the episode and let us know your takes on Indonesia’s current labor conditions in the comments!

It is the morning of the World Cup final, and while the entire globe is tuned in for the ultimate showdown, the tournament’s defining narrative was written during the Argentina-Cape Verde match. When Sidney Lopes Cabral curled the equalizing goal against the reigning champions in extra time, people were on the edge of their seats. Even though Lionel Messi and co eventually edged out the victory in the dying minutes, the game proved that any team — regardless of size or footballing stature — can compete against the very best in the world.

Watching this unfold on the global stage, we at The Reformist couldn’t help but look at our own national team. It’s a stark reality check on the morning of football’s biggest game: Indonesia failed to even qualify for the tournament, despite the massive amount of state resources poured into the national team. Since 2020, over 21 European-born players have been naturalized as Indonesian citizens to represent the national team, most of them hailing from the Netherlands and of Indonesian ancestry.

In 2025, the Indonesian government disbursed close to half a trillion rupiah to the Indonesian football team. Each time an international fixture rolls around, the squad stays in five-star hotels like the Fairmont in Senayan; Rolex watches on their wrists, gifted by President Prabowo Subianto, while their faces are plastered across every billboard in the country. All for a team that would fail to qualify for the World Cup by October.

Here is where the story should have turned toward introspection. Instead, the Indonesian Football Federation’s (PSSI) answer to this failure was the same as its answer to everything else: more naturalization.

The Youth and Sports Ministry has continuously called for increased grassroots development. But amid all the press statements, the search for more foreign-born talent never slowed down. This year, two youth players from Australia and the United States were naturalized, with PSSI’s scouts still working the diaspora for more.

Why is it so hard for the Indonesian government to look inwards and develop the human capital it has at home? The answer, again and again, is that long-term policies do not benefit politicians or leaders with short-sighted political goals. Development is all too long and tedious when “solutions” like naturalization can boost political capital in the short term.

In this edition of The Reformist, we go over the political-economic structure behind Indonesia’s sports governance, the government’s lack of support for sports other than football, and the low-hanging reform that nobody in power seems interested in picking up: prioritizing grassroots development over glamor.

Our sports management is short-sighted by design

Running football in Indonesia has become a reliable stepping stone into national politics, which tells you plenty about why development gets sacrificed for spectacle. Since the Reformasi era, four of the seven substantive PSSI chairs have gone on to hold higher political office after their tenure.

This politicking isn’t even subtle. During Prabowo Subianto’s 2024 presidential campaign, Erick Thohir — current PSSI Chairman — openly said that if voters wanted Indonesian football to prosper, they should vote for Prabowo.

Whether his words actually meant anything is up to interpretation, but what is clear is that Erick was comfortable enough to use a sport, which reportedly has a supporter base of over 165 million people, as leverage to propel Prabowo’s popularity. Although he had already assumed the role of State-Owned Enterprises (SOEs) Minister at the time, he has since served as Youth and Sports Minister under the Prabowo administration.

Sports are a spectacle, and political elites use the moment to gain short-sighted political gains. Long-term development, much like in economics, is politically unpopular for politicians with short electoral cycles.

It’s worse everywhere else for everyone else

Football at least gets the government’s attention, however badly spent and short-sighted it may be. Most Indonesian sports, on the other hand, don’t get that much.

Think of any competitive sport Indonesians follow, and there is a corresponding federation that manages it: football has the PSSI, pencak silat has the Indonesian Pencak Silat Association (IPSI), and badminton has the Indonesian Badminton Association (PBSI). For the most part, federation budgets in Indonesia are overwhelmingly bankrolled by sponsors, broadcast rights, and private individuals who already have skin in the game.

The Djarum conglomerate, for example, has been a cornerstone in the development of Indonesian badminton through the creation of its own club, PB Djarum. It has also been endowing the badminton federation since the early 1970s due to owner Budi Hartono’s love and admiration for the sport. Their presence is felt to this day. A few months back, 34 of the 74 badminton athletes selected for the national training camp (Pelatnas) came through the ranks of PB Djarum.

When sports do end up getting state money, it either flows sporadically, depending on the success of an Indonesian athlete in international competitions, or it flows through one primary channel: the Youth and Sports Ministry’s annual Pelatnas fund, the national training budget meant to prepare athletes across all disciplines for international competition. This is where the state’s real preferences become visible.

In 2025, the Youth and Sports Ministry disbursed Rp 407.72 billion in Pelatnas funding across 13 sport categories. Football alone took Rp 199.78 billion of it — essentially half the entire pool, more than the other twelve sports combined.

Athletics and archery — which delivered nine and six gold medals respectively at the 2025 SEA Games — received a combined Rp 40.2 billion, nearly five times less than football’s Rp 199.78 billion.

But it didn’t stop at the Pelatnas fund. In the same week Prabowo hosted the national football team for lunch and sent every player home with a Rolex, the Directorate General of Taxes of the Finance Ministry — weird, we know — announced a separate Rp 277 billion endowment from the 2025 State Budget for PSSI, justified under the mandate of Presidential Instruction No. 3/2019 to develop Indonesian football “as a whole,” not just fund its training camp. Add the two together, and the state committed close to half a trillion rupiah to football in a single year.

For non-football athletes without wealthy conglomerates backing them, financial concerns are a recurring grievance. Just a week ago, speed climber Desak Made Rita Kusuma Dewi made national headlines after winning gold at the World Climbing Series in Krakow. When asked by reporters about her feat, she thanked her team and the Indonesian fans for their support throughout the competition. She then opened up about her sorrows, explicitly calling out the Indonesian government for its lack of support in the competition.

“Before I came to Krakow, we had problems because the government didn’t support us. Now I hope the government will always support us for the next competition,” said the athlete.

Rizki Juniansyah, 2024 Paris Olympics gold medalist and world-record weightlifter, also called out his local government, Banten, and other governing bodies for showering athletes with support only after they’ve won international competitions.

“It shouldn’t just be at the Olympics. Even national championships deserve appreciation. Athletes shouldn’t be welcomed only once they’ve already returned to Indonesia, as if it’s just for show, so to speak. I’m sorry, it’s not that I’m upset or anything. That’s genuinely how it is,” said Rizky.

Tennis breakout star Janice Tjen drew international attention for her dark horse run in the 2025 Grand Slam, becoming the first Indonesian woman to win a Grand Slam match since Angelique Widjaja in 2003. Despite her accomplishment, Janice’s rise occurred despite Indonesia’s tennis infrastructure. Her coach, Chris Bilt, put it plainly:

“Coming from Indonesia has its challenges … there’s not really a player development plan from juniors to pros. So it’s been pretty tough financially for her,” said Bilt.

This norm of negligence continues to this day. This year, the Pelatnas fund has been slashed significantly in preparation for the 2026 Asian Games, from Rp 389.82 billion for the 2022 Hangzhou Games to just Rp 81.04 billion for this year’s Aichi-Nagoya Games. At the same time, President Prabowo joked that qualifying for the World Cup remains the hardest problem he has yet to solve, calling on Minister Erick and the Finance Ministry to find a way towards 2030.

He and his government, however, have not found the same urgency for climbers, swimmers, runners, and other athletes who have already made a name for themselves at the international stage but remain short on cash when support is needed most.

What state intervention in sports can look like

To learn more about what systemic support looks like, Indonesia could look to Germany for how its government reformed its football development system en masse.

After Germany crashed out of the 2000 European Football Championships at the bottom of their group — a nation that had reached the World Cup final six years earlier, only to be eliminated in the first round of the continental championship — the German Football Association (DFB) overhauled its entire development agenda.

Within two years, it had launched the most sweeping structural overhaul in the sport’s history: the Extended Talent Promotion Programme. The DFB and the German professional league jointly committed €48 million per year to it, building a two-tier development network of 366 regional coaching bases staffed by over 1,000 full-time coaches. The motto was simple: no talented child anywhere in Germany should live more than 25 kilometers from a proper training base.

Alongside the public investment, the DFB also made the reform binding on the clubs. Every first- and second-division professional team was required to build and staff a certified youth academy as a condition of its professional license. No academy, no license. Clubs that didn’t comply lost the right to play professionally. Professional clubs alone have since poured more than €1.5 billion into that infrastructure.

The result took fourteen years to materialize fully, but it did so unmistakably. When Germany lifted the World Cup in Brazil in 2014, the overwhelming majority of that squad — Thomas Müller, Manuel Neuer, Toni Kroos, Mesut Özil, Mats Hummels, Mario Götze among them — had come up entirely through the academy system built in the wake of Euro 2000’s humiliation.

For a more local comparison, grassroots development of a team sport can be seen through the rise of volleyball in Indonesia. Just last month, the Indonesian Volleyball Team won the Asian Volleyball Confederation Cup for the first time in national history, beating South Korea, the 26th best team in the world, whilst fielding a full team made up of local athletes. The national team has also been a constant force at the regional level, winning gold more than 12 times at the SEA Games.

This isn’t a coincidence, though it’s also not quite a government success story either. Across tens of thousands of villages across Indonesia, volleyball courts are more prevalent than football pitches, infrastructure the state can at least partly claim credit for.

But the deeper pipeline here is civil society, not policy. Take Farhan Halim, a starter on the AVC-winning squad: he came up through Klub Voli Pasundan, a volleyball program run by a century-old community education foundation that offers players steep tuition discounts in exchange for training commitment. He was made captain at 16, and by 2022, his club team was fielding a fully homegrown, 100 percent Pasundan-product squad — the youngest in the country’s top domestic league — and winning anyway.

While impressive and inspiring, Indonesia’s sporting development shouldn’t have to be like this. State intervention, when done with intent and a shared vision of youth development and long-term growth, can lead the country to sporting stardom.

Indonesia needs to cultivate a sporting culture early on

If stories from athletes and a locally run community club aren’t enough to prove that Indonesia is severely lacking in grassroots development to cultivate sporting culture from the outset, then perhaps the numbers can shed another perspective. A 2022 global report on youth physical activity lists Indonesia as one of the worst-performing countries for children and adolescent physical activity. The Active Healthy Kids Global Alliance gave Indonesia an “F” grade across the board for its poor efforts in promoting overall physical activity and organized sports.

The overall grade draws on multiple Indonesian government surveys pooled together. Health Ministry data found just 12.9 percent of Indonesian adolescents aged 13–17 met the World Health Organization (WHO) benchmark of 60 minutes of daily moderate-to-vigorous physical activity on all seven days. Meanwhile, a separate Ministry of Youth and Sport survey data, sampling nearly 17,500 people aged 10–19, found that only 10.1 percent averaged more than 60 minutes a day.

The organized-sport grade is worse, highlighting the systemic failures in Indonesian grassroots development. The global report defines the indicator as capturing children who “officially engage in routine training activities and are registered members of sports clubs or related societies,” or, in other words, whether a child’s activity happens through an actual coached, sustained program.

On this measure, the global report cited a 2018 Statistics Indonesia (BPS) study that found 3.54 percent of Indonesian children aged 5–17 were members of a registered sports club. Six years later, in 2024, that figure had stagnated at 3.66 percent, remaining functionally unchanged. Whatever Indonesian politicians have been claiming about youth sports development over the past half-decade, it certainly hasn’t shown up in the data measuring it.

So, the reform is actually not that complicated

This is exactly where the state must step in to intervene if it wants international glory in the long run, across all sports.

The infrastructure-centered German model and the subsidized system of the local Pasundan community club are blueprints the Indonesian government should learn from. The goal should be to move the 3.66 percent needle to develop homegrown stars, not to row through the canals of Amsterdam, praying that one more player who doesn’t make the cut with the Dutch national team would instead wear the red and white jersey and help Indonesia make it to the World Cup.

It doesn’t take far to see what this priority can produce. Look at Kylian Mbappé, the best footballer of his generation, who grew up in a low-income Paris suburb called Bondy, playing for a municipal club subsidized by his local government. Apart from Mbappé, over 53 other players participating in this year’s World Cup grew up and were built through the city of Paris and its suburbs.

If Indonesia wants to produce its own Mbappé, it needs to create versions of AS Bondy that could exist in every city, suburb, regency, and village in the country. This means that government leaders must come to terms with growth that is quietly funded but sustainable, and a belief that results will show in the long run — for football, for volleyball, for climbing, and for every other sport currently being asked to make do with a fraction of what football gets, and still somehow outperforming it.

We’d like to hear from you: In your opinion, what is the lowest-hanging reform that the Indonesian government could do to improve the state of your favorite sport? Comment below or write your opinion and send it to connect@thinkpolicy.id!

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Another day, another public uproar. The culprit this time is an itinerary leaked online that shows a plan for Public Works Minister Dody Hanggodo to visit New York, United States. What upset the public, however, was that his wife and daughter were on the official entourage list — and that the timing was suspiciously aligned with the final matches of the World Cup.

The ministry has clarified that the minister’s wife and daughter were included in the list for visa purposes and that no public funds were to be used for their trip. After the leak went viral, however, the entire excursion was canceled.

But the story didn’t end with an apology to taxpayers, a scrutiny of travel budgets, and a revised code of ethics. Instead, the ministry leadership took a more vindictive turn by asking, “Who’s behind this leak?” and went on to say that if they found the leak was internal, they would reprimand the culprit because “the letter wasn’t meant for public consumption.”

Within a few days, more rumors spread online that the ministry was planning waves of demotions and transfers to remote locations across the country, allegedly due to the viral case. This wave reportedly affected teams across units, including the secretariat responsible for planning the trip and drafting the document.

On 15 July, Minister Dody denied the allegation that the massive transfers were due to the leaked document, though his reasoning was unconvincing. “Transfers are no big deal. I have 38,600 employees; why can’t they be transferred?” he told the press.

Interestingly, there were earlier reports that Secretary General Apri Artoto, who told the press that the ministry would find and punish the culprit behind the leak, was among those affected and is reportedly waiting for his transfer to Papua. But an internal Public Works Ministry source told the news site Suara.com that this wasn’t true and that the mass transfers were a routine reshuffling unrelated to the document leak scandal.

It’s true, transfers could be routine, but the suspicious timing quickly prompted public speculation.

While the issue of transfer due to the leak remains unconfirmed, the statement that the ministry will punish the whistleblower is a red flag clear enough to signal a profound institutional failure that damages the Indonesian civil service on two fronts: (1) it aggressively stifles the nascent culture of internal whistleblowing; and (2) it reinforces a toxic, Jakarta-centric hierarchy that treats the rest of the nation as a penal colony.

Whistleblowing shouldn’t lead to witch hunts

For over a decade, successive administrations have paid lip service to the ideal of bureaucratic reform. They have reassured the public that the modern civil servant is no longer a passive cog in a feudal machine, but a professional driven by public integrity, transparency, and accountability. And younger, reform-oriented bureaucrats have been encouraged to challenge inefficient practices and stand against institutional decay.

However, the recent Public Works Ministry scandal has proven those assurances to be mere hollow rhetoric.

When a single document exposing an embarrassing truth led to a witch hunt and alleged mass demotions instead of reforms, the message sent down the ranks is unmistakable: loyalty to the hierarchy supersedes loyalty to the public. If you witness waste, mismanagement, or abuse of state facilities, you must look away. To speak out is to court professional ruin.

Whistleblowing is inherently risky, but the punishment meted out here alters the calculus entirely. By allegedly enacting collective punishment, the ministry forces public servants into a defensive pact of mutual silence.

A junior officer harboring reformist ideals would no longer dare to question a suspicious procurement order or a wasteful budget allocation if the consequence is the immediate uprooting of their livelihood and family. The system has chosen to value absolute opacity over basic accountability, ensuring that future bureaucrats will choose complicity as a survival mechanism.

Threats of “remote exile” reinforce a toxic Jakarta-centric view

The second, and perhaps more insidious, consequence of this alleged mass transfer lies in its geographical symbolism. By using transfers to remote regions as an explicit tool of chastisement, the Public Works Ministry has laid bare a deeply outdated worldview: the belief that Jakarta is the apex of professional existence, and that the rest of Indonesia is a wasteland reserved for the punished.

This is not the first time political figures or institutional leaders have reinforced this mindset. The phrase “exile to Papua,” or similar threats of banishment to distant provinces, has slipped from the mouths of officials seeking to discipline errant subordinates from time to time.

Jokowi-era Social Affairs Minister Tri Rismaharini, for instance, notoriously threatened to banish incompetent officials to Papua. This is a “habit” that undermines every single policy initiative aimed at regional equity and decentralization.

One administration after another has frequently promoted the narrative of an Indonesia-centric future. Billions of rupiah are funneled into infrastructure projects, regional connectivity hubs, and digital access for outer provinces under the guise of leveling the playing field. Yet, the moment an internal crisis occurs in the capital, the outer regions are instantly weaponized as geographical punishments.

This practice is an insult to the citizens living in those provinces. The communities in remote parts of Sumatra, Sulawesi, Kalimantan, Nusa Tenggara, Maluku, and Papua deserve the highest caliber of civil servants — professionals who bring dedication, resources, and a genuine mandate to build the regions. They do not deserve a disgruntled cohort of Jakarta exiles whose presence is the direct result of a political purge.

Furthermore, this dynamic perpetuates a toxic career trajectory within the bureaucracy. It solidifies the idea that a posting outside the capital is a mark of failure or disgrace, rather than a crucial step in nation-building. If the state itself treats the archipelago as a hierarchy of privilege with Jakarta at the center, it cannot expect its brightest minds to willingly dedicate their talents to the periphery.

Set your priorities straight

The worst thing that this scandal exposed is how the administration has treated the exposure of the problem as a far greater transgression than the problem itself.

Let us be completely clear: the fundamental issue was never the leak. The document in question did not compromise national security, nor did it expose sensitive state secrets. It revealed a planned allocation of public funds for an international trip that lacked a clear, verifiable public benefit. A trip that was canceled the moment it faced public scrutiny.

The cancellation itself is an admission of guilt. If the trip were truly essential to the functions of the Public Works Ministry, the ministry would have defended it with hard data and clear objectives. But they didn’t, simply because they couldn’t.

Thus, the problem is, and always has been, the persistent culture of wasteful, non-essential official travel that treats the state treasury as a personal travel agency.

While the ministry has said that the document is not for public consumption, the public absolutely deserves transparency about how, why, and where their tax money is spent.

The individuals who exposed this attempted misuse of public funds actually performed a valiant public service. To punish them for this exposure is an act of blatant misdirection; an attempt to shift the focus from a minister’s poor judgment to a civil servant’s supposed lack of loyalty.

We call on President Prabowo and the Administrative and Bureaucratic Reform Ministry to step in and scrutinize whistleblowing systems across ministries and other government bodies. An independent investigation must be launched to ensure that no whistleblower’s career is threatened after speaking up against maladministration, just as the Public Works Ministry leadership pledged to punish whoever leaked the itinerary document. Punishing the messengers while leaving the systemic issue unaddressed is a cowardly solution that does nothing to restore public trust.

To our civil servant friends who still believe in the promise of a clean and accountable Indonesia, do not let this display of institutional bullying convince you that silence is your only option; our opinion columns and editorial desk will remain an open and secure platform for anyone who wishes to anonymously blow the whistle on corruption and mismanagement.

We commit our editorial resources to thoroughly verify your information and will exercise our Right of Refusal to guarantee your anonymity under the law, ensuring that while your superiors may have the authority to disrupt your career, they do not have the power to control the truth. Reach out to connect@thinkpolicy.id.

The appointment of Ginka Ginting, a 27-year-old electoral campaign volunteer with no professional track record beyond student organizations, to the board of commissioners of PT Pertamina Retail has sparked an understandable public outburst across social media. But what followed was rather predictable: a collective, resigned shrug.

Or, as the cynics say: Isn’t it a time-honored tradition to treat the boardrooms of State-Owned Enterprises (SOEs) and their lucrative subsidiaries as a dumping ground for political IOUs?

In 2021, rock musician Abdee of ‘Slank’ was appointed as an independent commissioner of telecommunications giant PT Telkom Indonesia. Observers have pointed out that his appointment was a ‘payback’ for his support as a campaign volunteer for then-President Jokowi’s presidential runs—both times.

Even more mind-boggling: Dede Budhyarto, another Jokowi loyalist, was unseated from his independent commissioner position in PT Pelni amid allegations of a falsified diploma from Universitas Hasanuddin.

We have also seen it with party loyalists, losing legislative candidates, and influential campaign operators for decades. So, to say that these appointments are shocking is to ignore the historical mechanics of Indonesian political coalitions. It is unfortunately a well-entrenched and thoroughly normalized status quo.

The danger of undermining the roles of commissioners

However, normalcy shouldn’t be conflated with rightfulness. The sheer persistence of political patronage in state firms has bred a dangerous cultural assumption that the role of a corporate commissioner is: (1) a symbolic, part-time honorarium; (2) a comfortable but highly compensated retirement home or a youthful stepping stone; or even worse (3) a state-funded “thank you” note.

By consistently treating commissioner seats as political currency, the state sends a damaging message to both the public and the market that corporate oversight in institutions managing trillions of rupiah of public wealth does not actually matter. It reduces a vital pillar of corporate governance to a secondary reward mechanism, operating on the assumption that a commissioner’s office exists solely to occupy space, sign papers, and collect a paycheck, without exerting any real influence over how a company is run.

This perspective fundamentally misunderstands the constitutional and corporate purpose of a commissioner. In a standard private corporation, a Board of Directors (BOD) runs the daily business, while the Board of Commissioners represents the financial and strategic interests of the shareholders who privately funded the venture.

In the context of an SOE, the ultimate shareholders are not a small group of elite venture capitalists; they are the citizens of Indonesia. Every rupiah an SOE mismanages, wastes, or loses to corruption is money pulled directly from public infrastructure, healthcare, and education.

If the BOD takes reckless strategic risks, misallocates national assets, or engages in creative accounting to hide operational failures, it is the explicit duty of the commissioners to step in, demand an immediate course correction, or exercise their ultimate corporate power: calling a general meeting of shareholders to oust the executives.

Competence is critical for a commissioner role

To execute such a high-stakes mandate, a commissioner must possess a rigorous, non-negotiable level of professional competence. Corporate governance is not an abstract exercise in ethics or a job that can be learned via standard on-the-job training. It requires deep technical expertise in corporate finance, forensic accounting, regulatory compliance, and industrial strategy.

If a commissioner cannot read a complex balance sheet, identify hidden liabilities, or independently evaluate capital expenditure plans, they are effectively a blindfolded watchdog. They cannot audit what they do not comprehend.

When an executive board presents a polished, overly optimistic quarterly review, an unseasoned or politically appointed commissioner lacks the tools to look beneath the surface. They are left entirely vulnerable to being duped, manipulated, or managed by the very executive directors they are legally obligated to oversee. They become compliant rubber stamps, validating corporate disasters long before the public ever catches wind of them.

We do not need to look to theoretical corporate textbooks to understand what happens when an independent professional actually does the job. In fact, we have a striking historical roadmap from our own recent past.

In April 2019, the executive leadership of Garuda Indonesia proudly announced a miraculous financial turnaround, claiming a consolidated net profit of US$ 5 million for the 2018 fiscal year. It was hailed as a massive public relations victory for a deeply troubled national carrier. However, two commissioners representing a minority corporate stake, Chairal Tanjung and Dony Oskaria, flatly refused to sign off on the financial report.

Both seasoned corporate professionals with deep financial acumen, Chairal and Dony immediately spotted an egregious accounting manipulation. The executive board had recognized a 15-year, uncollected future contract with an in-flight Wi-Fi provider as immediate, current revenue.

Their professional defiance and refusal to look the other way triggered an official regulatory intervention by the Financial Services Authority (OJK) and the Finance Ministry. The subsequent forced re-audit stripped away the accounting fiction, forcing Garuda to restate its books and expose a staggering US$ 175 million net loss.

Without independent and highly competent professionals willing to disrupt the boardroom peace, a massive deception would have sailed through unnoticed, hiding systemic operational rot beneath a veneer of fake profitability.

A glaring contradiction

The ultimate structural irony of today’s political appointments sits at the very pinnacle of Indonesia’s current economic architecture.

Dony Oskaria—the very man who blew the whistle at Garuda and saved the public from a massive corporate lie—now serves as the Chief Operating Officer of Danantara and Head of the SOE Regulatory Agency. Danantara has been engineered as a revolutionary sovereign wealth fund and a superholding entity designed to consolidate, restructure, and supercharge Indonesia’s sprawling state assets into a lean, globally competitive economic engine.

The current administration has repeatedly positioned Danantara as a historic step toward world-class corporate governance, efficiency, and credibility in international markets. Dony knows better than anyone in the country that rigorous, independent, and fiercely professional oversight is what prevents state assets from collapsing under the weight of inefficiency and corruption.

Yet, a glaring contradiction is that while the upper echelons of government build Danantara to project global financial sophistication, the ground-level reality of subsidiary appointments remains unchanged. The state cannot credibly claim to be building a world-class asset management system while simultaneously handing out seats on subsidiary boards, such as Pertamina Retail, to amateurs who have never managed a corporate balance sheet.

Are we paying commissioners too much?

This governance failure is made even worse by the extraordinary and often hidden compensation packages attached to the commissioner roles. In Indonesia’s SOE ecosystem, a commissioner’s remuneration is legally pegged to the executive payroll. A President Commissioner receives roughly 45 percent of the CEO’s salary, while an ordinary commissioner is entitled to 90 percent of that amount—effectively taking home around 40.5 percent of the chief executive’s baseline pay.

In mature corporate governance models, non-executive board directors are typically compensated with flat, reasonable annual retainers and modest meeting fees. This structure is intentional; it ensures that their financial well-being is not overly dependent on executive performance metrics, thereby preserving their absolute independence to critique the management.

In Indonesia, we have flipped the script entirely. We have created a system where political appointees are paid a king’s ransom for part-time, non-executive oversight, all while requiring absolutely zero professional skin in the game.

For example, members of the Board of Commissioners at PT Bank Mandiri Tbk were paid a total of Rp5 billion (US$ 270,000). By contrast, an independent board member at ICBC—a Chinese SOE bank generating roughly 13 times more net profit than Mandiri and is the biggest bank in the world—was compensated just RMB 400,000-500,000 (US $70,000) that same year. The year before, when the tantiem had not been scrapped, Kompas reported a single commissioner at PT Bank Mandiri Tbk was paid Rp 38 billion (US$ 2.4 million) in 2024.

Bring back meritocracy to the boardroom

If Danantara and the broader Indonesian state enterprise sector are ever to be taken seriously by international investors, the government must permanently dismantle this political welfare system. SOEs are commercial entities funded by the public sacrifice, not private piggy banks or political rewards. We must establish rigid, transparent, and legally binding meritocratic criteria for all commissioner appointments across every tier of state-owned enterprises and their subsidiaries.

The criteria must demand proven track records in corporate leadership, financial management, or sector-specific technical expertise. A political campaign or a loyal network should never serve as a substitute for a professional resume. Indonesia faces complex global economic headwinds that require our state enterprises to operate at maximum efficiency and peak transparency. To achieve this, we desperately need sharp, uncompromised professionals who know how to guard the national treasury, not a continuous rotation of political loyalists who are just happy to be in the room.

Online frenzy ensued soon after X (formerly Twitter) users discovered Israeli-owned restaurants, businesses, and community groups in Bali. This discovery prompted scrutiny and anger over how Israelis could open up an entire business, or even secure visas to enter the country, when the State of Israel isn’t even diplomatically recognized by Indonesia.

Social media users have also revealed that Israeli visa agency groups have been offering services to enter Indonesia for Israeli passport holders, suggesting a systemic practice.

Without an Indonesian counterpart to approve their documents, this practice would have been dead on arrival, and yet it is not.

Meanwhile, the Corruption Eradication Commission (KPK) made national headlines after it arrested then-Deputy Corrections and Immigration Minister Silmy Karim. The high-profile arrest was unknowingly timely — as if confirming that our immigration sector had been troublesome — since Silmy was arrested on charges of a graft scheme involving the extortion of illicit fees for visas and stay permits for foreign nationals in Indonesia.

Alongside the deputy minister, seven other ministry officials were arrested by the KPK, allegedly racking up Rp 145.6 billion over four years, from 2022 to 2026. In Bali, KPK investigators raided the island’s immigration office in connection with Silmy’s case, suggesting that his practices may have occurred there primarily.

While Silmy’s arrest and the online discourse are two separate instances, they are connected through the web of the problematic Indonesian immigration sector. The former is a formal authority whom the KPK claimed had misused its power for personal gain, while the latter is the presumed effect of the former’s corrupt practices.

But Indonesia’s immigration problem is far more complex than bribery and loopholes at the arrival gates. In this edition of The Reformist, we will uncover the patterns of graft in Indonesia’s immigration sector, its effects on foreign nationals entering the country, and question why this seemingly textbook public service has become a magnet for systemic corruption where the law becomes negotiable through layers of discretionary policies, payments for access, and a business model that rests on weak enforcement.

A playground for corruption

Despite Silmy’s high-profile arrest, his case is only the tip of Indonesia’s immigration corruption iceberg.

In the course of investigating Silmy’s syndicate, KPK cross-referenced the case with a financial intelligence report from the Financial Transaction Reports and Analysis Center (PPATK) that had been quietly accumulating evidence.

It found that 35 Immigration and Corrections Ministry employees had, between 2019 and 2025, controlled 96 bank accounts with a combined balance of Rp 366.7 billion. Only 3 percent of that sum came from their official salaries. The other 97 percent had to come from somewhere — and investigators believe it came from the same extortion scheme applied across years of permit applications.

KPK chair Setyo Budiyanto was explicit at Silmy’s press conference: the scheme operated with a clear division of labor, with some commanding, executing, collecting, and distributing. Commands flowed top-down. Money flowed bottom-up. Every Friday, Rp 100 million went to line Silmy’s pockets, routed through his subordinates, under the code name “malaikat” (angel).

Silmy’s case, however, is not a story of bad apples. Two months before Silmy’s arrest, Suhartono, the Manpower Ministry’s former director general for foreign workers’ placement, was convicted and sentenced to four years in prison.

Suhartono’s crime was structurally identical. He extorted illicit fees from agencies processing the mandatory work plan document that a foreign national must submit before a stay permit application can even begin. His syndicate ran from 2017 to 2025, accumulated Rp 135 billion across eight officials, and at its most brazen, also accepted a Toyota Innova Reborn and a Vespa Primavera as tribute.

Last year, the graft commission uncovered another expatriate extortion scheme within the Manpower Ministry, in which eight ministry officials were arrested for collecting bribes totaling up to Rp 53.7 billion between 2019 and 2024. This particular case unveiled the rotten core of the whole organizational chart behind this graft, as the collected fees were found to have been “redistributed” progressively, with lower-ranking officials and office boys taking a cut of the stolen money.

The ironic gray area between legality and graft

Despite systemic corruption at every layer of the permit process, the number of foreign nationals in Indonesia has conversely grown year on year. An estimate of 184,000 foreign workers was on the Manpower Ministry’s books in 2024, up from 168,000 the previous year. Numbers not only increased but skyrocketed, since pre-pandemic levels had fewer than 100,000 foreign workers residing in the country.

This highlights that foreign nationals and the companies employing them have largely absorbed the unofficial surcharges as a cost of doing business. As one Jakarta Post editorial article noted last year, many hiring companies and foreign workers “probably never knew they were paying bribes, or if they did, just dismissed it as a normal part of doing business in Indonesia.”

Regardless of how foreigners absorb these costs, the structural damage accrues to Indonesia. According to the 2020 World Bank’s Ease of Doing Business (EODB) index, Indonesia ranked 73rd globally, below countries such as Malaysia, Vietnam, and Thailand. Investors see this friction and inefficiency as a signal of where to allocate their capital. The more foreign investors see the rentier economy of immigration, the less likely they are to continue investing in Indonesia.

And while we acknowledge that the EODB is no longer considered the gold standard for measuring the investment climate today, it’s still a useful reference for showcasing how corruption in the immigration sector creates an unpredictable business environment. To support this claim, the chart above highlights how far Indonesia’s foreign direct investment (FDI) has lagged over the past 20 years, despite a strong recovery after the 1998 economic crisis.

From 2019 to 2024, Indonesia consistently hovered below 2 percent, while Thailand sharply bolstered its FDI after the 2020 pandemic, implementing sweeping reforms to boost FDI that were acclaimed by the Organization for Economic Co-operation and Development (OECD).

At the same time, Indonesia drew more criticism than praise from the international body. It highlighted how Indonesian “policymakers have yet to demonstrate their intention to establish a clear role for FDI in Indonesia’s development ambitions,” as well as “failing to live up to its potential as a host to FDI, despite its numerous attributes.”

When rules are applied arbitrarily and legal thresholds fluctuate depending on how much money changes hands, we’re basically telling foreigners who genuinely want to invest in Indonesia not to come here.

The workaround tourist economy

Going to Bali these days will have you marvel at the number of tourists enjoying the Island of the Gods. In 2025, close to 7 million tourists visited Bali, an increase of 9,7 percent from the previous year, with close to a quarter of them being Australian tourists.

But what about foreign businesses that have set up shop all over Bali without any explanation of their legal status?

Bali’s tourism agency estimates that over 4,000 accommodation units are listed illegally, out of the official total of 16,000. Last year, Bali Governor I Wayan Koster claimed that around 400 travel and vehicle rental agencies were illegally run by foreigners. “Many don’t even have offices, don’t reside in Bali, yet are still able to operate. This is clearly outrageous,” said Koster.

The formal foreign workforce may not care about Indonesia’s corrupt immigration process. But foreigners running informal businesses don’t just ignore it; they actively benefit from it.

Officially, foreigners are not allowed to own small-scale businesses. While this definition is loose, the threshold is clarified through Presidential Regulation No. 10/2021. In it, foreign nationals are only allowed to open businesses with a minimum capital contribution of Rp 10 billion or US$ 558 thousand at current exchange rates.

The Indonesian government has since updated this classification through Investment Coordinating Board Regulation (BKPM) No.5/2025, which reduces the required paid-up capital to Rp 2.5 billion or US$ 140 thousand, with the caveat that the minimum investment plan stays at Rp 10 billion.

It is unlikely that these foreigners, be they Israeli, Russian, or Australian, are spending over 140 thousand dollars, with a promise to increase it to 558 thousand dollars, to open a small restaurant in Bali.

To get around the formal requirements, foreign nationals have settled on two well-worn alternatives: marry an Indonesian (plus a few extra steps), or find one to front the business (a ‘nominee’).

The former is straightforward enough; a legal marriage to an Indonesian citizen secures a pathway to residency under immigration law.

But the latter has become a defining feature of Bali’s shadow economy, operating through what is commonly called a nominee structure, in which a foreign national partners with an Indonesian citizen who poses as the formal owner of the business or property while the foreigner retains beneficial ownership and economic benefit.

This grey area has not gone unnoticed. The current Balinese administration has publicly vowed to crack down on such practices. Last year, Bali Governor I Wayan Koster created a task force comprising the National Police, the Military, and local tourism associations to “discipline” the practice. The governor’s concern centers on the rentier dynamic these businesses create. Foreign operators, insulated from the full cost of doing business legally, drive up land prices and living costs for ordinary Balinese while contributing little to the formal tax base.

While Koster has been vocal, there has been little follow-up on how effective the task force has been in cracking down on this issue.

More recently, Koster pushed the national legislature to promulgate the Bill on International Private Law (HPI). The bill, if passed, would consolidate Indonesia’s currently fragmented legal framework on cross-border disputes, covering nominee property arrangements, mixed marriages, and inheritance conflicts, into a single statute, giving local authorities and law enforcement clearer ground to act on cases that today fall under legal uncertainty.

This one example alone tells us enough that corruption in the immigration sector is not a ‘bug’ in the system. Corrupt officials and their brokers design bottlenecks in immigration permit processing, which they then monetize. They did not just ‘stumble’ upon the opportunity by chance.

Multifaceted problems require multi-layered solutions

As is the case with many of Indonesia’s governance problems, the immigration issue won’t be solved simply by clean housing for the Immigration and Corrections Ministry or the Directorate General of Immigration at the Manpower Ministry alone. Solutions will only come when stakeholders from all levels of government take up responsibility and are convened to tackle the issue together.

Last year’s Manpower Ministry bribe case makes the point sharply. When graft commission purged the agency, they found that the illicit practice had been running since 2012, spanning three ministerial regimes. It’s hard to imagine how a scheme this structured, extracting bribes from foreign work-permit applicants for over a decade, could survive three changes in leadership without ever triggering an internal red flag.

What Silmy’s arrest, Suhartono’s conviction, and last year’s Manpower Ministry bribe scandal have in common cannot be simplified to routine graft. It is the entire architecture behind the country’s immigration governance that needs reform.

For illegal businesses, the remedy for all of this already exists in law, making the scale of the problem harder to excuse as an accident. Under Article 33 of the 2007 Investment Law, any agreement that puts share ownership in one person’s name for the actual benefit of another is void from the outset, making it legally nonexistent.

Article 146 of the Limited Liability Company Law lets a district court dissolve a company outright on a prosecutor’s or interested party’s petition if the company violates prevailing regulation or its founding deed is legally defective — which a nominee arrangement built to dodge foreign-ownership limits plainly is.

The tools to dismantle a nominee-run business exist from the district court up to BKPM in the capital. That thousands of these arrangements have been allowed to operate openly for years is a story about enforcement nobody chose to use, be it in Bali with their task force or higher up in the country’s law enforcement and executive branch.

An honest look into a dishonest sector

To provide an answer to Indonesia’s immigration problems is not what this article seeks to do. But what is clear from this discussion is that the issue is two-pronged: (1) formal authorities have misused their powers; (2) opportunity-seeking foreigners take advantage of the system’s lack of enforcement.

At the macro level, if immigration graft scandals continue to make national headlines, foreign investors may soon take their capital elsewhere as perceptions of Indonesia’s rule of law deteriorate.

At the micro level, tourists who have set up shop in the country’s tourist hotspot will continue to manipulate the country’s legal system so long as the system allows high-level public officials to abuse their discretionary powers.

Until these problems are confronted honestly, it shouldn’t come as a shock that Israelis have found a way to “infiltrate” Indonesian borders. Keep this up, and the system will keep producing exactly what it was designed to produce: a playground, as it has always been, for those who know how to play it.

What are your thoughts on this issue? Do you see these criminal syndicates and illegal businesses as a systemic problem or a simple case in need of a band-aid? Let us know in the comments what reforms should be made to Indonesia’s immigration sector!

Writer/Researcher:

Editors: , ,

Visual designer:

Two days ago, 30 June, the court sentenced former Education Minister Nadiem Makarim to ten years in prison. He also has to pay Rp 809 billion in restitution, or else serve another five years.

Nadiem has been on trial since last year for allegedly causing state losses in the procurement of Chromebooks during his term in office.

But he is not the first public official or government consultant to be named a graft suspect without ever taking a dime of public money. Apparently, under Indonesia’s corruption law, any act that can be regarded as an abuse of power resulting in state or economic losses can be charged as corruption. We’ve written about it here.

Criminalization of the Chromebook policy

The case stems from a massive Education Ministry initiative to procure hundreds of thousands of laptops for public schools across Indonesia. To ensure these devices could be managed remotely, monitored for appropriate student use, and updated securely at scale, the ministry required the laptops to include a centralized Device Management system. As Windows-based alternatives with equivalent management software were significantly more expensive, the technical requirement effectively made Google’s Chromebook the only financially viable option for the mass rollout.

State prosecutors and the court interpreted this specific technical requirement not as a cost-effective choice for cloud-based education, but as a deliberate attempt to lock the project specifications to benefit a single proprietary ecosystem, Google, forming the core of the corruption charges against Nadiem.

The alleged conflict of interest rests on the fact that Google had invested in Gojek years earlier, the company Nadiem co-founded, which he left before joining the cabinet.

The problem with treating that as proof of a quid pro quo is timing: The bulk of Google’s investment in Gojek-linked entities happened before Nadiem became minister, not after, which cuts against the idea that the Chromebook decision was payback for money he’d already received years earlier.

A prior investor relationship that predates the office in question is a weaker basis for a conflict-of-interest finding than one that develops during it. Of course, that doesn’t make the specification choice above scrutiny. Still, it’s a meaningfully different claim than “he steered a contract to a company that was paying him” – and the verdict doesn’t appear to draw that distinction.

The court also determined that the Development Finance Comptroller (BPKP)’s finding of Rp1.56 trillion in state losses was valid, even though, constitutionally, only the Supreme Audit Board (BPK) has the authority to audit government programs and determine state losses. A former BPK head testified in court that the methods used by the BPKP were dubious at best, often relying solely on sampling data. That distinction is not procedural nitpicking: an audit institution without constitutional authority to declare a state loss produced the single number the entire prosecution hangs on.

Moreover, the old audit logic was built for static assets. If a government construction project procures more cement than it needs and it hardens unused in a yard, that is an obvious, quantifiable loss.

But technology does not behave like cement. Tech procurement is inherently a bet on an ecosystem and a mass adoption curve. Today, the overwhelming majority of those Chromebooks remain operational in classrooms. Can the small fraction that is not fairly labeled a criminal state loss? If 100 percent efficiency is the benchmark for legality, then countless other flagship government initiatives are structurally criminal.

The phantom enrichment

Here is a part of the verdict that should unsettle anyone who thinks the ruling was a clean finding of guilt: the panel of judges explicitly ruled that it was not proven that Nadiem had unlawfully enriched himself. He was convicted of abuse of authority causing state losses — a separate charge — and one judge on the five-member panel dissented outright, saying he saw no convincing evidence of malicious intent.

And yet, the restitution order treats the Rp 809.59 billion as a personal financial benefit requiring repayment. That sum was never a liquid payout, a bribe, or a slush fund extracted from the state budget. It was a standard, closed-loop corporate balancing act between a parent company, PT Aplikasi Karya Anak Bangsa (AKAB), which Nadiem founded, and its subsidiary, PT Gojek Indonesia.

Ahead of the Gojek-Tokopedia (GoTo) merger and IPO, Gojek needed to clear a pre-existing debt owed to AKAB, most of which traced back to a roughly US$ 787 million investment Google had made in AKAB years earlier. Gojek issued new shares to AKAB, AKAB paid for them, and on the same day, Gojek transferred the exact same amount back to extinguish the debt. No cash left the corporate group. Not a single rupiah ever entered Nadiem’s personal pocket, and he has said he never had access to the funds.

Restitution in Indonesian corruption law is meant to claw back what a defendant unlawfully gained. Here, the court seems to have imposed a giant number because it was the most legible figure in the case file, not because it traced to anything Nadiem actually received. That is a more serious problem than misread accounting. It’s simply that the personal liability and the enrichment finding don’t align.

How can we expect public officials to do reforms when a jail sentence is lurking?

The immediate consequence of this legal overreach is complete bureaucratic paralysis. When any innovative policy decision can be retroactively branded an abuse of power, the incentive to reform vanishes entirely. Public officials would quickly realize that the only way to protect their freedom is to strictly maintain business as usual. The system effectively mandates safety through mediocrity, actively punishing anyone attempting to modernize state functions.

Worse, this creates a chilling effect that will permanently repel external talent from entering government service. The court’s logic in this verdict implies that simply having once held equity in a company that later interacts with state policy can be twisted into a criminal conflict of interest, years and job changes later. The state will be run exclusively by career bureaucrats who know how to navigate checklists, shutting out the expertise Indonesia needs to compete globally.

We have to talk about state losses

If “state losses” is to remain the primary weapon used to lock a professional away for a decade, the financial calculation behind it must be flawless, robust, and beyond institutional dispute. In this case, it was neither: the number came from an agency the Constitution doesn’t authorize to make that finding, using a methodology its own former leadership called unreliable.

The double standard this exposes isn’t hypothetical. While a former minister is being personally bankrupted over a disputed audit of a program that mostly worked, the current administration has been writing the opposite protection into law for its own flagship program. A financial-sector law passed this week shields purchases of bonds issued by Danantara, the sovereign wealth fund chaired by senior cabinet figures, from criminal, civil, and tax investigation. The bond records can’t even be used as evidence in court.

One government program gets audited by an agency with no constitutional standing to do so, and the finding becomes a decade in prison. Another gets statutory immunity from scrutiny by design. If the legal system can carve out investigation-proof status for the state’s biggest current bet, it is hard to argue in good faith that a defensible laptop specification from 2020 deserved the opposite treatment.

What’s next

If there is a fix, it starts with restoring BPK’s constitutional exclusivity in practice, not just on paper. No state-loss finding should support a criminal conviction unless BPK, not BPKP, produced it.

Alongside that, Indonesia needs something closer to a business-judgment standard for technical and procurement decisions made in good faith with documented rationale: the question in a courtroom should be whether an official enriched themselves or acted with corrupt intent, not whether their engineering choice turned out to be litigable in hindsight. Without that distinction, the same instrument now being used against Nadiem is available, at will, against the next official who tries to build something.

None of this is an argument for easing up on corruption enforcement. It’s the opposite. Indonesia has no shortage of cases with an actual bribe, an actual bank transfer, an actual official who got personally richer while a program collapsed. The Chromebooks still running in classrooms today are simply not that.

When prosecutors and courts spend their credibility and the public’s attention manufacturing a state loss out of a defensible technical spec, that is institutional capacity not spent on the cases where the money really did disappear, and someone really did pocket it.

Treating every costly policy bet as a potential decade in prison doesn’t make the anti-corruption regime look tougher. It makes it look undiscriminating, and it lets the real cases blend into the noise of all else being prosecuted with equal ferocity. If the goal is actually deterring theft of public money, the system needs to be able to distinguish that from a minister who made a call that didn’t pan out perfectly.

This article responds to The Reformist vol. 29 on BPJS Ketenagakerjaan, which discusses the shortfalls of the program and how relevant ministries responsible for social security have fumbled protection amid a flailing economy. Read here.

The Reformist recently asked in a volume whether BPJS Ketenagakerjaan can “save” Indonesia’s vulnerable workforce. It is a sharp, well-sourced piece, and it is right about the danger: seven out of ten workers stand outside the employment social security system.

As the article pointed out, the clock is ticking toward financial deficits by 2038. Without genuine reforms, BPJS Ketenagakerjaan, as a social protection program, faces the risk of collapse.

But the article seems to put BPJS Ketenagakerjaan, an implementing agency, on trial for “crimes” committed by the legislature, the Finance Ministry, and the Manpower Ministry. This misdirection risks letting the actors who actually hold the levers walk away free from the consequences of their misdeeds.

An operator on trial for laws it never wrote

Let’s begin with what BPJS Ketenagakerjaan legally is. Under Law No. 24/2011, it is a public legal entity, or, in plain words, an operator. It can collect contributions, manage Social Security funds, and pay out claims across five programs.

It cannot, however, decide the rules of the game it plays. Contribution rates, benefit formulas, eligibility criteria, investment mandates, and enforcement powers are all set upstream. They are stipulated in Government Regulations (PP) and in Ministerial Regulations issued by the Manpower Ministry, the Finance Ministry, the National Social Security Council (DJSN), and ultimately the House of Representatives (DPR).

BPJS Ketenagakerjaan can’t legislate its own coverage, just as a cashier can’t rewrite the menu.

Therefore, please allow me to “defend” BPJS Ketenagakerjaan by redirecting the problems listed in the Reformist’s article to those who are actually responsible:

I. The JHT withdrawal scandal was a policy reversal, not an operator’s blunder

The article treats the hemorrhage of Jaminan Hari Tua (JHT) funds, with more than a million workers cashing out in a single year, as evidence that the program is misdesigned.

It is misdesigned. But BPJS Ketenagakerjaan did not design it.

The lump-sum withdrawal upon resignation or layoff was stipulated in PP No. 60/2015, when the government reversed its own retirement-preservation principle under pressure from organized labor.

The agency administering that rule, BPJS Ketenagakerjaan, had no vote in the matter. To blame the operator for honoring a regulation it is legally bound to honor is to mistake obedience for authorship.

II. Weak enforcement is due to a lack of sufficient manpower (in the ministry inspectorate)

The article correctly references the Ombudsman’s 2021 finding on weak enforcement, especially towards non-compliant employers. Yet it then splits the blame between BPJS Ketenagakerjaan and the Ministry of Manpower, as though the two share the mandate.

They do not.

Labor inspection is the exclusive authority of the Directorate General of Labor Inspection. BPJS Ketenagakerjaan cannot impose sanctions on a non-compliant employer. It can only refer to one.

With roughly 2,400 inspectors stretched across a workforce of more than 150 million, the 523,000 unregistered employers are not a symptom of operator negligence. They are a symptom of a state that funded an obligation without funding the means to enforce it.

III. The missing subsidy is a budget decision

The article accurately notes that BPJS Kesehatan, the country’s national health insurance program, has reached near-universal coverage, while BPJS Ketenagakerjaan languishes. This is true, but it’s not the operator’s fault that it doesn’t have the budget to provide universal coverage.

BPJS Kesehatan thrives in this area largely because the country introduced a scheme called Penerima Bantuan Iuran (PBI), a state-funded program that pays premiums for the poor. But there is currently no equivalent for employment social security.

That absence is not an institutional limitation of BPJS Ketenagakerjaan. It is a deliberate fiscal choice by the Finance Ministry and ratified by the House. Article 14 of Law No. 40/2004 actually mandates PBI for both BPJS, but this is not the case in practice today. In other words, the comparison The Reformist’s article uses to indict the operator is thus, in fact, an indictment of the government’s budgeting decisions.

What the operator can do once the architecture lets it

While it would be wrong to direct responsibility for solving the above-mentioned problems to BPJS Ketenagakerjaan, that doesn’t mean the agency is entirely absolved of blame.

It should also communicate more openly with the public about these constraints, especially the workers it serves, so that it does not bear the brunt of public frustration alone.

But these are second-order problems. The binding constraint is upstream, and that is precisely why the agency’s potential is being underestimated.

Consider what the operator already has: a national collection and investment machine, a grassroots agent network (Perisai), digital enrolment channels, and a growing web of cooperation agreements with sub-national governments. The premium cut of Rp 8,400 for informal workers, stipulated in PP No. 50/2025, shows the instinct is there.

What this machinery lacks is not competence. It lacks a mandate with teeth, a fiscal instrument to subsidize those who cannot pay, and an enforcement partner that is actually resourced.

If we give BPJS Ketenagakerjaan a statutory coverage mandate backed by a functioning inspectorate, a PBI-equivalent subsidy carved out of the APBN, and the DJSN’s willingness to coordinate rather than spectate, the coverage curve that has crawled fourteen points in twenty-eight years will bend. The limiting “ceiling” is not the operator but the policy architecture. In fact, the operator has been trying to break it with one hand tied behind their back.

What genuine cooperation would actually look like

If the constraint is the architecture, the remedy must be architectural, and it requires that every party move at once. The point is not that BPJS Ketenagakerjaan is blameless. It is that no single actor can close a thirty-point coverage gap alone. Here is what the actors’ orchestration could look like:

The government holds the heaviest instruments. The Finance Ministry should carve a contribution subsidy for the poorest informal workers out of the State Budget, a PBI for employment modeled after the health version, beginning with the cheapest and highest-impact floor (work accident and death coverage, JKK and JKM, at roughly Rp 16,800 a month) before layering pensions on top.

Enrolment should become automatic immediately after a regulation is formalized, bolted onto the OSS business-licensing system, the issuance of a business identification number (NIB), tax registration, and the Regsosek social registry. This will ensure that protection follows the worker instead of waiting for the worker to discover it.

The Manpower Ministry must properly resource its Directorate General for Supervision and Occupational Safety and Health, with more inspectors reaching the district level and a live data bridge to BPJS so that non-compliance becomes visible and actionable. And the DJSN must finally start coordinating rather than merely spectating, gradually restoring JHT’s retirement-preservation purpose.

Employers will comply when evasion costs more than compliance. Registration should be tied to procurement eligibility, license renewal, and tax and export clearances, so that the billion-rupiah fine written into the 2011 law stops being a useless deterrent it is today. Firms that comply should be rewarded with recognition and lighter reporting, not merely spared punishment.

Workers, especially in the informal and online gig economy, will not enroll on their own through a counter they do not know exists. Gig workers should be automatically enrolled, with the right to opt out, as a condition for platforms (e.g., Gojek, Grab, Maxim) to operate at all.

Everyone else is best reached through the associations they already trust, the ojol communities, the market-trader cooperatives, the fishing and farming groups, rather than through atomized individual sign-ups. And, importantly, JHT must stop being treated as a severance ATM, which requires both financial literacy and a redesign that makes the long-term products genuinely worth holding.

Trade unions, including this author’s own, must own their share of the problem too. The 2022 campaign that forced the reversal of JHT preservation protected short-term liquidity at the direct expense of long-term retirement adequacy.

The labor movement should now spend its considerable mobilizing power on the opposite goal: an adequate retirement pension (Jaminan Pensiun) and stronger job-loss insurance (Jaminan Kehilangan Pekerjaan), so that defending workers no longer means defending their own poverty in old age.

Unions should also drag the tripartite forums from grievance toward genuine co-design, and extend their organizing to the informal and platform workers that the whole system currently forgets.

This is what cooperation between the State and individuals, in Beveridge’s phrase, would actually require. Not just a slogan, but a synchronized set of decisions by the very actors the original article left out of frame.

Let’s stop asking the wrong question

So the question is not whether BPJS Ketenagakerjaan can save Indonesia’s vulnerable workforce. The honest question is whether the other actors will finally do their part by writing the laws, funding the subsidy, and staffing the enforcement that an operator cannot conjure on its own. The agency can carry the load. But it cannot be asked to build the road, pass the budget, and hire the inspectors while doing so.

The time bomb is real. But it was assembled in the ministries’ and the parliament’s meeting rooms, not in the operator’s offices. Pointing the spotlight at BPJS Ketenagakerjaan makes for a tidy villain. But it also lets the people holding the detonator stay comfortably out in the shadows.

Want to share your views on public policy reforms or other political issues?

Write to us: connect@thinkpolicy.id

We’ve written previously that a controversial provision in the now-passed Law on Financial Sector and Strengthening (UU P2SK), which adds a growth mandate to Bank Indonesia (BI), could erode investors’ trust in the central bank’s independence. But turns out there’s a provision more egregious in the newly minted law.

Meet Article 50A of UU P2SK. A provision that allows Indonesia’s sovereign wealth fund Danantara to issue specific loan instruments, dubbed “Patriot Bonds” and “Merah Putih Bonds,” carrying a startling perk: an absolute immunity from criminal, civil, and tax investigations.

The article explicitly states that transaction data on the purchase of these bonds cannot be used as a basis for tax assessments or as legal evidence in court.

For all practical purposes, Indonesia has just institutionalized a recurring, permanent tax amnesty program, hidden inside the fine print of a financial sector law.

Let’s run the scenario. You have a stash of questionably acquired funds that you cannot spend without raising suspicions. If you purchase the Patriot Bonds, authorities can never come after you to ask how you acquired those funds. Now, doesn’t it closely resemble the tax amnesty program?

But a tax amnesty is supposed to be a historic, one-time compromise.

The logic is simple: the state offers a temporary clean slate to bring hidden wealth into the formal economy, widening the tax base for the future. Yes, it is problematic for the country’s economic justice, fiscal credibility, and institutional transparency — not to mention that it is fundamentally unfair to the millions of honest, taxpaying citizens — but it is somewhat tolerable as a pragmatic tool to reset the system if it happens once.

But when amnesties become a recurring fixture, disguised as “patriotic” investment bonds no less, the logic just collapses. Why would anyone comply with standard tax rates if they can simply wait for the next state-sanctioned amnesty? Instead of broadening the tax base, this “no-questions-asked” mechanism rewards tax evasion and shrinks tax receivables, creating a moral hazard that hollows out compliance.

Finance Minister Purbaya Yudhi Sadewa has denied allegations that Patriot Bonds amount to a form of tax amnesty, arguing that investors who purchase the bonds won’t automatically become immune from all legal ramifications.

“It’s just the money [used to purchase the bonds] that is immune, not the company. Unlike tax amnesty, which grants immunity [to the company too],” he said.

But that isn’t reassuring enough. If the funds used to purchase the bonds are protected from scrutiny, then purchasing the bonds effectively becomes a legal loophole for those seeking to launder illicit funds, just like the tax amnesty program. Even worse, whereas one would have to pay a penalty on declared assets under the tax amnesty program, the Patriot and Merah Putih bonds would instead generate some interest.

What’s more alarming, however, is how this policy came to light. Over two weeks after the law was reportedly passed, the official text of UU P2SK still cannot be found on any public government portal. One couldn’t simply find it on the House of Representatives’ (DPR) site or any official legal documentation and information network (JDIH) sites. To actually get our hands on the text of the P2SK Law, we were forced to find leaked drafts and press reports.

This case is just an instance of a worrying legislative trend in Indonesia, in which crucial bills are drafted behind closed doors, rushed through approval, and shielded from public scrutiny until it is too late. But this case is especially bad because a policy that could potentially grant alleged tax evaders immunity from criminal prosecution should be fiercely debated in the public square, not snuck into a final draft that the public couldn’t even find to read.

The government may argue that the Patriot and Merah Putih bonds are necessary to fund national development. But financing the future by dismantling the rule of law and undermining the fiscal contract is a losing strategy. Capital might flow in today, but institutional credibility—once burned—takes decades to rebuild.

The latest K-Drama craze, “Teach You A Lesson,” has sparked heated discussion about the roles of schools, teachers, and the government in teaching kids to be good people. Watching it made me think about our own education system: Do we have anything in our curriculum that ensures our kids know how to be good people and, by extension, good citizens?

In the upcoming 2029 elections, Gen Z (born 1997-2012) is predicted to dominate the voting demographic. Meaning, the next election year will be a big day for the digital natives and, for some, first-time voters.

Voting is a pivotal decision-making process for a good citizen. The question is: are they prepared? One is choosing their leaders and regulators, so two minutes in a voting booth could affect a voter’s life for years to come (it is, quite literally, life-changing). So, shouldn’t voting be something that one is well-prepared for? And even more importantly, shouldn’t students be aware of their duties after casting their ballots?

If a student could spend days and nights preparing for university entrance exams, shouldn’t an important civic duty get a somewhat similar preparation?

Gen Z has proven to be more politically aware. Thanks to the internet, they grew up with endless information at their fingertips, which has affected their media consumption and literacy, as well as their exposure to global socio-political and economic issues. A UK study in 2024 even showed that Gen Z are more willing to express their moral convictions, including through civil disobedience. In a nutshell, younger generations are more digitally literate and unafraid to express themselves.

But one question remains: Where is the best place for young adults (17- to 19-year-olds) to learn about this, if not school, where they already spend a great chunk of their time?

We already have the answer to that: Civic Education, or, as you might be more familiar with it, ‘PPKn’. The tool for teaching kids about civic duties has been part of our curriculum for decades. Though whether or not it has been effective–or even enough–remains to be seen.

It’s time we take PPKn at school seriously

Let’s first walk down memory lane. What do you remember from your PPKn class at school? We had it in elementary school, junior high, high school, and even at universities. But if you’re like me (the old me, at least), you might only remember being taught that civic duties are helping the elderly to cross the street, never skipping classes, or joining the neighborhood rotating night watch (siskamling).

That was how a “good citizen” was portrayed for years, and unfortunately, it is still the case today. Grab a 12th-grade PPKn book now, and this is what you will find.

Civic education is one of the most strategic platforms through which a state can deliberately reproduce its ideological values across generations. In Indonesia, PPKn clearly reflects this pattern. It has undergone multiple name changes and curricular overhauls, but its core logic has remained consistent; it adapts to serve the political needs of the era in which it operates.

The pattern is visible across our history. After independence, our civic education focused on instilling the value of patriotism and guiding the newborn country as it began its journey. Over time, its scope expanded to discuss the role of government, civil rights, and civic duties. During the New Order, PPKn taught the country’s history, our geographical presence, our constitutions, and the manifestation of Pancasila as our core value.

So, is PPKn, our civic education, good enough? Before we answer that question, let’s take a quick world tour.

PPKn around the world

In democratic countries, civic education is a platform for nation-building. Most civic education subjects worldwide cover topics such as history, core values and principles, culture and norms, and political awareness. Some Scandinavian countries (e.g., Denmark, Finland, and Sweden) even incorporate intergenerational topics such as climate change and justice, digital citizenship, and economic inequality.

Some newly democratic countries, on the other hand, shared a common tendency to teach their “dark” history by building the discourse around “unity”.

South Africa, for example, has reformed its high school history curriculum to “heal the divisions of the past” — taking lessons from its painful apartheid history to build a united and democratic country. Another example is Rwanda, which in 2007 launched its civic education program, called “Itorero,” aimed at enabling Rwandans to reacquaint themselves with the values and taboos of their culture under a post-genocide government.

What about Indonesia?

Well, if it’s up to me, I say that our civic education has long been stuck in a superficial portrayal of a utopian society, in which no conflict is ever clearly and rightfully explained (why did conflicts happen, and how?), and reality is too distant (or perhaps too scary) to be put in the book.

Bad things that have happened in our past, particularly those we can clearly draw lessons from, are just swept under a metaphorical rug. Take the New Order-era mass murders. In PPKn books, we are taught that murder is wrong and violates basic human rights. Yet, the books never fairly mention why and how the mass murders that happened during 1965-1966 happened, who ordered them, and why communism was to blame. Students at school are expected (or rather, forced) to go on with their lives without learning about the dark sides of our history, pretending all is well.

It is as if, no matter our past, as long as we help the elderly cross the street, never skip classes, and join siskamling, our democratic society would be fine.

But this kind of civic education ultimately risks offering our younger generations smoke and mirrors about democracy, civic duties, and being a good citizen.

If we want the younger generation to actually be better citizens who exercise their duties and know how to demand their rights from the state, so that they can live better lives in a well-maintained democratic society, we need to start taking PPKn seriously.

Reforming the education space, even just one subject, is a complicated task that would require years to complete and involve multiple actors. But what can we start doing now?

Reimagining the PPKn that we deserve

First, we have to rebrand the idea of what a “good citizen” is.

Being a good citizen can actually take many forms: paying our taxes, keeping public areas clean, respecting different opinions, and following the law. But in a growing democracy, good citizens are also responsible for keeping the government in check.

This is what is currently missing from our PPKn curriculum. Yes, it already taught about voting as our constitutional right. It also taught about voter abstention (golput) and its implications for democracy. But it stops there. It doesn’t teach students what happens after we elect a leader.

A good PPKn should teach that a citizen’s duty does not stop at the voting ballot. Monitoring, offering opinions and feedback, and criticizing policies that seem not to be working are also duties a good citizen must perform.

Civic education should inform students that criticizing the shortcomings of the government, state administrators, policymakers, and their policies or programs is a civic duty. This would prevent the false belief that many, unfortunately, subscribe to today: that criticism of the government is an attack on democracy.

Here is an analogy. If we love someone, don’t we want our partner to be the best version of themselves—to fulfill their potential? Wouldn’t we want to stop them from making the same mistakes over and over again? Apply that to our relationship with our country, and it would be the same.

Second, talk about real problems in class.

PPKn teachers can start by encouraging students to talk about the past or any ongoing issues in their own city. Let them realize that they do not live in a vacuum.

For example, students in Bekasi and Tangerang can talk about the waste management problem in their city; students in Gresik can talk about the correlation of growing industries in their city to people’s quality of life (or the lack thereof); students in Jakarta can talk about how integrated public transportation can change people behavior and relationships to green public spaces; or students in Maluku can talk about why renewable energy options like solar panels are more reliable than state-provided electricity.

My point is that schools should broaden their students’ horizons. Then, only after the class has become a safe place for students to breakdown real problems in their surroundings, teachers then can tune up the conversation level to more complex issues, such as Indonesia’s dark history of mass murders and activists kidnapping in President Suharto’s New Order dictatorship, or signs of state’s oppressions to our rights and freedom of expression, or the juxtaposition between the Nutritious Free Meal (MBG) program’s well intent and its problematic implementation on the ground.

Third, “overlay” the online world into the classroom.

The internet is a whole different world, and Gen Z and their younger counterparts, Gen Alpha, spend half their time there. They not only learn and get information online, but also participate in political discourse, build community, and shape new culture.

Civic education should actively respond to this by incorporating a digital literacy curriculum. In class, students (and teachers) can learn together to differentiate real and fake news, critically assess AI content, and detect misinformation, cybercrime, and cyberbullying. Students and teachers can also benefit from understanding algorithmic biases, such as confirmation bias, sampling bias, and representation bias.

This digital fluency has direct implications for civic participation.

With the abundance of information available online, young people theoretically have every opportunity to be well-informed before they cast a vote — candidate track records, professional backgrounds, and business affiliations are all publicly accessible.

Teachers can play a crucial role here: guiding students to verify whether what they read is accurate and not misleading, and facilitating open, critical discussions about power structures in politics.

When students encounter information that a political candidate has ties to or is heavily affiliated with certain business interests, they should be equipped to ask how much that would factor into the candidate’s future decision-making — and whether the candidate’s personal interests might override their mandate to serve the public.

That kind of critical readiness is ultimately what prepares students for election years.

Lastly, the way students learn about citizenship should change.

We can learn from Germany for this one, unironically. Their foundational frameworks for civic and political education, called the Beutelsbach Consensus, adopt three principles:

First, civic education classes should be free from indoctrination. Students should not be overwhelmed, caught off guard, or hindered in forming an independent judgment. Second, controversial issues must be taught as controversial. Teachers should not, by any means, only present their own opinions or favor only one opinion. Different opinions should be discussed and compared. Third, students should be given fair weights to express their personal interests. Teachers must facilitate students’ analysis of real political situations.

While that model is still being tested for its effectiveness to protect democracy, we can learn a thing or two. The banking model of education — where teachers remain the sole authority in the classroom to “deposit” knowledge into students, a practice Paulo Freire criticized — is no longer an appropriate tool for cultivating critical thinkers.

To counter that passive model, Freire proposed “problem-posing education”, where teachers and students co-produce knowledge and co-examine their reality through dialogues, reflections, and mutual engagements.

A bet for cultural change

Look, I’m arguing for a cultural change here. Let us take a minute to imagine.

What would it look like in 2029 if young, first-time voters learned this version of PPKn? Would they critically assess the presidential candidates’ track records in class with their peers and teachers? Would learning about Indonesia’s dark history inform their voting decision to not repeat the cycle? Would openly discussing political dynasties discourage Tangerang high school students from voting for a candidate who will retain power for years?

It is only in my imagination (and now yours) today, but changes like these can, and will, happen if we design our civic education responsibly.

Want to share your views on public policy reforms or other political issues?

Write to us: connect@thinkpolicy.id

As the rupiah plummeted, Indonesians nationwide have organized protests expressing discontent with the government’s handling of the country’s worsening economy. Can Indonesia get out of this rut?

Economists have warned since last year to rectify the disproportionate budget for populist programs like the flagship Free Nutritious Meal (MBG) program. Some argue that the Indonesian central bank, Bank Indonesia (BI), should intervene to stabilize the rupiah. While they are all good recommendations, we thought it would also be a good idea to look back in history to see whether we have been through a similar crisis and how we handled it.

Turns out, once upon a time, we actually did rescue ourselves from an impending economic crisis.

In 2013, Indonesia faced an economic crisis after the United States Federal Reserve (‘The Fed’) signaled it would begin tapering its bond-buying program. This move sent shockwaves through the developing world, triggering capital outflows, currency depreciations, and tumbling financial markets in what became known as the Taper Tantrum.

Indonesia was among the hardest-hit, joining Brazil, India, South Africa, and Turkiye as countries dubbed the “Fragile Five” — a group perceived as most vulnerable to the Fed’s tapering policy. Incredibly, Indonesia made its way out of the “Fragile Five” in just seven months.

How did we do that? In this edition of The Reformist, we uncover how Indonesia lifted itself from the brink and what lessons the Prabowo administration would do well to heed today.

Growth under borrowed time

Much like the United States-Iran war, the Taper Tantrum was a sudden, unexpected phenomenon that caused global panic. After the 2008 global financial crisis, the US entered a Great Recession. The Fed then stepped in to revive the economy through Quantitative Easing (QE).

Given a deflationary US economy, everyone was afraid to spend. So, the Fed purchased assets and bonds from US commercial banks in exchange for dollars, thereby pouring more money into the US financial system. This, in conjunction with lowering the interest rate, led people to spend more, reviving the sluggish economy.

The effects of the US’s domestic policy reached Indonesia precisely because of this influx of new capital. With low interest rates, US dollar-holding investors began to look to emerging countries like Indonesia for higher returns on their investments.

From 2009 to 2014, external financing to Indonesia (bonds, equities, and loans) increased from US$ 24.7 billion to US$ 32.6 billion, peaking in the second quarter of 2013, just before the crisis ensued. Globally, emerging markets received close to half of all capital flows during this period, with roughly 90 percent of that concentrated in just eight countries; Indonesia among them. Critically, much of this inflow exceeded what Indonesia’s economic fundamentals could actually justify.

This led to what former Finance Minister Chatib Basri labeled a “false normal world.” The post-2008 flow came with an incredible wave of new capital. But even he understood that the numbers were unsustainable. During this period, the rupiah appreciated sharply against the dollar.

Additionally, the economist noted a lack of investment in the country’s export-oriented sector, with investment instead directed towards the highly volatile commodities sector. The former would have created industries meant for long-term economic growth (factories, manufacturing, traded goods), whereas the latter is a short-term cash grab that gets transferred out of the country as soon as commodity prices spiral. Indonesia was getting richer during this period, but doing so on a fragile foundation.

Normal, on the other hand, is a world without QE. When the Fed signaled in May 2013 that it was preparing to wind down its QE program, the world snapped back to normal very quickly. Investors who had been chasing returns in emerging markets suddenly had reason to bring their money back to the US.

For Indonesia, the consequences were swift and severe: the rupiah plummeted, the stock market collapsed, and foreign exchange reserves began to drain.

The Taper Tantrum had arrived.

Preventing monetary lift off

Just days before the Fed signaled that it would reverse the QE policy, Chatib Basri was appointed finance minister by then-President Susilo Bambang Yudhoyono (SBY) to oversee the appropriation of the 2014 state budget. But when the Taper Tantrum began, all focus shifted to handling an impending economic crisis.

The most crucial aspect of taming the market during the period was to prevent panic selling of the rupiah. The government did so by applying a variety of monetary policies through central bank intervention. BI pulled three levers in quick succession: hiking the policy rate, tightening liquidity conditions, and, critically, pulling back from excessive foreign exchange market intervention.

On the rate front, BI increased its policy rate by 175 basis points to 7.25 percent and raised the overnight deposit facility rate — the rate at which commercial banks receive for parking their money in BI — to 5.5 percent. Higher interest rates make holding rupiah-denominated assets more attractive to investors, since they now earn better returns, slowing the rush toward the exit.

The intuitive assumption is that a weakening rupiah is driven by businesses and individuals rushing to buy dollars to avoid a crash. This is true if those dollars leave Indonesia. But if the dollar remains within the country’s banking system, the pressure on the exchange rate is cushioned, making it easier for the central bank to manage.

To keep dollars in the system, BI introduced biweekly foreign-exchange swap auctions with commercial banks, giving businesses a way to hedge their dollar exposure without physically taking dollars out of the country. It also gave banks broader maturity options, or the liberty to choose how long they would like to park their US dollars with BI, making it more attractive to keep dollars in the Indonesian financial system.

The most counterintuitive decision, however, was what BI chose not to do. Before the crisis even occurred, BI had been burning through its foreign exchange reserves to artificially prop up the rupiah.

Chatib, along with the then-trade minister, Gita Wirjawan, argued and eventually convinced President SBY that this had to stop. The rupiah needed to be allowed to weaken in line with market fundamentals, rather than be defended at great cost.

Once BI stepped back from excessive intervention, reserves began to stabilize and eventually recover, climbing from a low of US$ 92 billion in August 2013 back to US$ 99 billion by the end of December and US$ 105 billion by April 2014.

But the decision to let the rupiah weaken was not merely about conserving reserves. It was also a deliberate policy tool in its own right. Economists call this expenditure switching, a policy in which the government attempts to shift consumption of foreign goods towards domestic goods. The way it works is that when a currency weakens, Indonesian exports become cheaper for foreign buyers, making them more competitive in world markets. At the same time, imports become more expensive for Indonesians, nudging domestic consumers toward local products.

One prudent lesson from the Taper Tantrum crisis was that BI could wield its monetary policy decisively, even if it meant sacrificing short-term economic growth.

Today, there is a perception that BI is under pressure to support the administration’s political agenda. This is evidenced by the “burden-sharing” arrangement, in which BI revives pandemic-era bond purchases to finance populist programs, effectively amounting to debt monetization and fiscal dominance. Last year, economists warned that this scheme could threaten BI’s independence, currency stability, and investor confidence.

And then there is the recent revision to the Financial Sector Development and Strengthening Law (UU P2SK), which now expands BI’s role to support economic growth. But even before UU P2SK was passed, BI had cut the policy rate three times last year, from 5.75 percent at the start of the year to 4.75 percent by the end of the year. Much like what the Fed did: with a lower interest rate, borrowing becomes cheaper, but saving becomes less attractive.

This is good for a pro-economic growth administration like Prabowo’s, as more capital can be used to support the government’s policy agenda, whether flagship or infrastructure programs. But it can be incredibly detrimental to the rupiah’s strength, as the currency becomes less attractive to hold for investors. What serves the government’s growth agenda, however, does not necessarily serve the rupiah.

Now, everyone has felt the effects of a weakened rupiah, despite President Prabowo’s claim that “villagers do not use the dollar”. Importing foreign goods has become increasingly expensive, raising the prices of everyday staples and — widely covered by the media recently — pharmaceutical products, impacting public health services and people with chronic illnesses.

After the US-Iran war erupted in February, BI still maintained the 4.75 percent policy rate through May. It was only after the rupiah exceeded Rp 18,000 and persistent external pressure that BI decided it was time to intervene in the interest rate. On 20 May, BI raised it to 5.25 percent, and only a week ago to 5.5 percent.

As soon as the hikes were implemented, the rupiah slowly recovered and dropped below Rp 18,000, signaling a return of market confidence and highlighting the need for monetary prudence amid geopolitical uncertainty.

Ripping the necessary fiscal band-aid

Monetary policy alone, however, would not have been enough to close the wound. During the Taper Tantrum, the deeper structural problem was Indonesia’s current account deficit (the difference between what the country earned from exports and what it spent on imports), driven specifically by fuel subsidies.

The government was subsidizing petrol and diesel prices so heavily that it was encouraging overconsumption, inflating demand for oil imports, and blowing out the budget. By 2013, if left unchanged, internal Finance Ministry estimates projected that the budget deficit would balloon to 5 percent of GDP, well above the 3 percent legal ceiling.

In a meeting with President SBY, Chatib lobbied that the current account deficit must be addressed through expenditure reduction, namely by reforming fuel subsidies. This was highly unattractive at the time, especially with the 2014 presidential elections right around the corner. The vast majority of Indonesians use petrol daily for personal and business consumption, so even a slight price hike would trigger a political uproar.

But the SBY administration was brave enough to rip the band-aid. In June 2013, following heated parliamentary debate and nationwide protests, the prices of subsidized petrol and diesel were increased by 44 percent and 22 percent, respectively. To cushion the blow, the government directed Rp 9.3 trillion from the savings toward direct and conditional cash transfers to 15.5 million low-income households, as well as Rp 7.2 trillion towards rural infrastructure spending.

In his testimony, Chatib cited a 2012 World Bank report which estimated that a fuel price increase of roughly Rp 1,500 per liter would push an additional 0.7 percent of Indonesians into poverty. Thus, fuel subsidy reform, in any capacity, has to be backed with progressive shock measures that take lower-income citizens into account.

Fast forward to 2026, and similar policy efforts seem to be underway in a poorly designed manner.

Just a few days ago, state energy company Pertamina hiked the price of non-subsidized petrol from Rp 12,300 to Rp 16,250 overnight. This followed the previous price increase, which occurred a couple of months earlier in March.

For economists, the increase was expected, given that the price of crude oil rose sharply from around US$ 57 per barrel at the start of the year to over US$ 120 per barrel at the peak of the US-Iran War in April. This is reflected in the state budget, which projected only that crude oil prices would hover between US$ 70 and US$ 95.

Yet, even if it was to be expected, public communication for this policy has been lackluster. The price increase happened overnight, without warning, and came not from the President but from an announcement by Pertamina’s subsidiary, Pertamina Patra Niaga. Talks of a new direct cash transfer program also came from National Economic Council (DEN) head Luhut Pandjaitan, who was called to the Presidential Palace for a completely different agenda.

Meanwhile, at his latest public address, President Prabowo showed no qualms about mentioning the price hike. Instead, he continued to mock dissent by calling on attendees to ignore those who snide at the government, insinuating his infamous rhetoric about foreign stooges.

Like Prabowo, then-president SBY was not brave enough to announce the price increase himself. But many of his ministers stepped in to assure the Indonesian public that they would be compensated, including Finance Minister Chatib Basri and Coordinating Economic Affairs Minister Hatta Rajasa.

Notably, the SBY administration had already warned the Indonesian public about a price hike for months, even before the Taper Tantrum, which assured the finance minister that fuel subsidies had to go.

They understood that managing a crisis was as much about managing perception as about managing the budget, especially for a politically sensitive issue like the fuel subsidy.

That lesson, it seems, has not made the trip from one administration to the next.

Lessons for the present day

Learning from this experience, Indonesia should be able to overcome today’s economic spiral despite widespread signs of pessimism. The key, however, lies in whether the current administration is willing to show enough humility and take the necessary steps to address systemic policy gaps.

As Chatib employed policy mechanisms in 2013, the same framework can be applied today to reverse the trend. In fact, in his recent public appearance at the Grab Business Forum, he provided a glimpse into the country’s current economic outlook.

He mentioned that the role of the finance minister is simple: either to earn more revenue, spend less, or borrow more money to ensure the stability of the Indonesian economy. Easier said than done, but entirely possible given the government’s ability to stabilize the economy a decade prior.

In his diagnosis, Chatib also pointed to Indonesia’s rising Credit Default Swap (the premium a lender pays to protect itself against the risk that a sovereign entity defaults on its loans) well before the war between the United States and Iran erupted. Take a look at this graph:

At the start of January this year, the CDS stood at around 68 basis points (bps). By the end of February, right before the US-Iran war started, that number jumped to 83 bps, up 14 bps, or roughly 22 percent.

This meant that even before the war brought about an oil crisis, foreign lenders had already begun to lose confidence in how the Indonesian government was carrying out its policies, to the extent that they were willing to pay a higher premium to protect themselves against the risk that the government might fail to repay its loans.

But the CDS serves more as a perception-based insight than as a reliable reflection of whether Indonesia will spiral into a great recession. It means the higher the CDS, the more foreign investors perceive Indonesia as riskier to invest in than before; nonetheless, they remain willing to invest in the country if they are better protected.

For the government, as Chatib explained, the rising CDS cannot be attributed to external factors alone. Rather, it is a reflection of questionable domestic policies that have strained capital trust.

External shocks are one thing. But what matters more is that investors want to see clean and prudent governance. Instead, they see the problematic implementation of the state-budget-straining Free Nutritious Meal (MBG) program, the rent-seeking tendencies of the centralization of commodity exports, and the increasingly prevalent criminalization of policymakers.

The Taper Tantrum was just as unexpected as the US-Iran War. Yet the government was willing to make unpopular decisions quickly and communicate them honestly to ensure long-term stability of the Indonesian economy.

In 2013, Indonesia surprised the world. Whether it can do so again depends less on the complexity of the policy tools available and more on the political will to use them.

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The arrest of Dadan Hindayana, the Head of the National Nutrition Agency (BGN), along with his two deputies, was nothing short of dramatic. But are we surprised?

We all saw it coming. The agency, which administers the implementation of President Prabowo’s flagship Free Nutritious Meal (MBG) program, has been under public scrutiny due to its massive Rp 268 trillion in state funding. But the nationwide initiative was rolled out under a cloud of systemic vulnerabilities: vague accountability mechanisms, opaque kitchen partnerships, and a rush for scale.

The Attorney General’s Office (AGO) alleged that Dadan and his deputies funneled lucrative kitchen management contracts through personal, closely tied foundations. It exposes how vulnerable the program was to greed. A multi-billion-dollar procurement budget, coupled with the decentralized distribution of daily meals and a lack of strict governance, has turned public welfare into a private feeding frenzy.

Yet, as devastating as this scandal appears in the headlines, it offers the government a rare political gift: a clean slate to start over.

It’s no secret that bureaucratic failures often trigger defensive PR campaigns to save face. But in BGN’s case, there is no need to play defensive. There is no face left to save for the previous management. Now that the rot has been excised, the government should just openly admit that the initial governance framework was deeply flawed.

This arrest may not be the death knell of the MBG program, but rather a signal of a chaotic, necessary rebirth towards its institutional maturity.

That said, we are seeing somewhat encouraging indications that the new leadership intends to use this crisis wisely.

Immediately after her appointment, the new BGN head, Nanik S. Deyang, announced a moratorium on the construction of new Nutrition Fulfillment Service Units (SPPGs). Despite her own controversies (which include dismissing criticisms of MBG), Nanik’s new direction for MBG is a necessary operational brake the program needs.

Civil society groups have warned for months that the expansion of these partner kitchens without established standards was fertile ground for procurement fraud. Pausing the expansion, on the other hand, will allow the government to freeze the bleeding, audit existing sites, and restructure operations without the pressure to hit arbitrary rollout targets.

Nanik also mentioned that she would refocus the program to prioritize beneficiaries in the “left-behind” (frontier, outermost, and disadvantaged, or 3T) regions. This is a welcome change. Rightly so. But Nanik was quick to follow up by stating that MBG in the 3T regions should be funded through contributions from foreign partners and philanthropies rather than relying on the state budget.

That statement makes one raise their eyebrows as it brings us back to square one: BGN sees evidence of inefficiency, but immediately shifts the burden elsewhere rather than addressing the root cause. If stopping MBG is out of the question for this administration, then at least they must stop the leakage of trillions of public funds.

Learning from this brouhaha, the new administrators should acknowledge that corrupt officials have been exploiting blind spots in MBG implementation, which originated from the administration’s impetuous appetite to achieve “greatness” (millions of people fed, thousands of kitchens built, millions of new jobs created) overnight.

Thus, if they want to go on, this is the momentum to first rethink what MBG wants to achieve and, thus, how best to design the program to get there. (We’ve previously argued in this article that MBG is unsure of what problem it wants to solve.)

Obviously, when they figure this out, they also need to address operational problems that have been the cherry on top of this whole fiasco: ensure standardized and transparent procurement, empower independent oversight, and prioritize quality over velocity.

A chance to course-correct

The President’s decisive purge of the old guard proves that the administration understands the stakes. Let’s be realistic: the MBG program cannot and will not be rolled back. It is the defining campaign promise of this administration, and millions of families are already counting on it. But precisely because it is here to stay, the government must treat this crisis as an unprecedented, probably unrepeatable opportunity to course-correct.

The moratorium and the arrests are aggressive first steps in the right direction, but they are just the prologue. We urge the government to follow through with absolute, unyielding structural reforms. This is the moment to drop the political theater, build the system the right way from the ground up, and ensure that a program meant to nourish the nation’s children would not serve to line the pockets of its elites, ever again.

This article first appeared in Kenapa Harus Peduli in Indonesian, written in response to The Reformist’s vol. 28 on cultural heritage and museum management reform.

In recent years, public discourse about cultural heritage has gotten increasingly popular. At first glance, it gives the impression that the state has been paying serious attention to the largely ‘abandoned’ cultural sector. However, such narratives primarily grapple with surface-level debates that overlook a fundamental issue: how is culture actually understood, and for whose interests are these agendas executed?

That is why we found this Reformist article titled “Why is it so difficult for ‘Wonderful Indonesia’ to make culture a priority?” both intriguing and ironic.

First of all, we’d like to concede that the author has commendably mapped valid problems. The Indonesian government has indeed paid little attention to its cultural heritage, as proven by the lack of budgetary support. They also astutely contextualize the repatriation of artifacts within the history of Dutch colonialism in the archipelago.

The problem, however, is the author’s state-centric approach, reducing the cultural crisis to mere managerial issues. Cultural heritage is imagined as an inanimate object that needs to be “managed well” in museums, strictly through administrative reform.

While this perspective is not entirely wrong, it becomes problematic when it fails to recognize that neither cultural heritage nor museums is ever a neutral entity.

We’d like to offer three critical notes. First, The Reformist’s article positions the government as the primary actor in managing cultural heritage, while it might not be. Second, the article’s illusion of decolonization stops at the repatriation of artifacts, without dismantling coloniality. Third, the article tends to center institutional reform as the primary solution without examining its accompanying limits and contradictions.

What is a “cultural heritage” and who decides?

Just as our understanding of inheritance often becomes an object of dispute, cultural heritage is equally an arena of contestation. Something becomes cultural heritage not simply because of its high intrinsic value, but because an authority in power deems it worthy of preservation and institutionalization.

This dynamic is captured by the concept of the Authorized Heritage Discourse (AHD), which describes the professional practices that institutionalize cultural heritage to legitimize an “official interpretation” of the past. The government has a structural advantage that enables it to play a dominant role in defining the nation-state’s identity.

In the context of The Reformist’s article, AHD is highly apparent when the Indonesian government is positioned as the principal actor in determining the direction of cultural preservation. But studies have indicated that this framework poses significant problems for public participation, or the lack thereof.

The current regulation, Law No. 11/2010 on Cultural Heritage, has yet to fully grant latitude to non-governmental actors to independently determine what cultural heritage is important to them and the best ways to preserve it for future generations.

Indigenous peoples and local communities are treated as the Other, whose voices and knowledge are not truly considered a valid epistemic foundation. Furthermore, heritage discourses tend to fixate on material dimensions alone.

Stripped of its living context, cultural heritage is prone to being reduced to something purely technical: a problem that can be resolved simply through governance reform, institutional modernization, and regulatory improvements.

It is unsurprising, then, that the “success” of cultural heritage is measured by how professionally it is managed and by the extent to which it meets global standards that stem directly from Western knowledge paradigms.

Half-hearted decolonization

If we are to truly address the “elephant in the room” when talking about Indonesia’s cultural heritage issues, the next necessary step should be to deconstruct the reality that its management systems and interpretations remain highly centered on the interests of those in power—and the coloniality that has yet to crumble.

Obviously, Indonesia is no longer under Dutch East Indies rule, but many of its cultural heritage institutions operate with a mindset akin to that of the former colonizer. Even the National Museum of Indonesia participates in reproducing the colonial gaze in its representation of Indonesian history.

This coloniality feels increasingly palpable when we observe the celebrations surrounding the repatriation of artifacts to Indonesia.

Repatriation becomes a stage for state political performance; celebrated as a diplomatic victory and a resurgence of national dignity, with state ceremonies and heroic narratives about bringing the nation’s history home.

Cultural heritage, here, manifests as “symbolic capital”. A value of prestige and honor that converts into political legitimacy for the regime.

Such is the very issue that needs to be criticized about the approach taken in The Reformist article. The author moves too swiftly toward institutional optimism without sufficiently challenging the colonial nodes that still shape the understanding and management of cultural heritage in Indonesia today.

We could see it in the way the state fails to resolve various crucial issues within the domestic cultural landscape, from evicting indigenous people from their living spaces and the commercialization and illegal sale of artifacts, to the destruction of cultural heritage and the marginalization of local communities from decision-making processes related to their cultures.

Indigenous communities’ cultural heritage, having been uprooted from its living context by European colonialism during the Dutch occupation, is at risk of undergoing a second uprooting through the centralization of Indonesia’s cultural heritage authority.

Repatriation brings heritage items home—yes. But it merely shifts the center of historical legitimacy from the colonial metropole to the national capital.

Another problem arises when museum reform in Indonesia is directed to follow the standards of Western institutions. The Reformist article views the British Museum model as a crucial step toward more professional museum governance. The issue is that the British Museum itself grew from the accumulation of colonial wealth and to this day remains the most naked symbol of colonialism itself.

Therefore, we must be deeply cautious when adopting such institutional models, as blindly replicating them risks importing the very power dynamics we seek to dismantle.

Reform, or commodification?

During his tenure as the Director-General of Culture in the then-Ministry of Education and Culture, Hilmar Farid proposed improving and utilizing “cultural infrastructure” as a form of “cultural investment”. But the use of cultural infrastructure, including museums, should not limit public participation, technological upgrades, or improvements in internal management.

Enthusiasm for the repatriated artifacts must be followed by practical understanding of their management and use, for the good of the people, education, and science. Even if some repatriated artifacts possess neither sacred value nor functional use in our modern society, access to them as research objects must be guaranteed.

Law no. 66/2015 on Museums specifically mentions the use of museums, among other things, for research, thereby making such research compulsory for museum administrators, individuals, or customary law communities (masyarakat hukum adat) under the authorization of the head of the museum.

But despite being legally mandated, information on the authorization process for conducting research in museums is not yet widely available. Thus, the stereotype of museums as decrepit institutions hinders effective research efforts.

The establishment of the Culture Ministry, however, has led to significant changes in the conception of Indonesia’s cultural policies, focus, and budgets. But even before making Cultural Affairs a standalone ministry, the establishment of the Indonesian Heritage Agency (IHA) as a Public Service Agency (BLU), which manages state-owned museums nationwide, shifts a considerable share of operational costs onto museums, forcing management to address funding challenges.

This has led museums to be rebranded as recreational destinations. For instance, the installation of Imersifa room in the Indonesian National Museum, which on the surface provides a pragmatic solution: the public goes to the museum, pays the entry ticket, enjoys the installation, takes some pictures, and then departs.

This approach to public participation could be misinterpreted as viewing the public as a market for the museum, shifting museums from activating their spatial place as a part of public space in a balanced way to extreme commodification. The selection of artifacts installed in the exhibition hall and the museum’s main narratives would become subjects that constantly adapt to changing public tastes and political interests.

Indeed, museums have recently become photogenic weekend destinations, yet all the artifacts on display become meaningless. It looks modern, but the relationship between society and its cultural heritage becomes severed and distant.

If we keep on positioning the state as the authoritative party on interpreting and developing Indonesian culture, every change of ruling groups in Indonesian politics, with their own logic on the collection management issues, would impact the public access to the artifacts and the kind of narratives that have been manufactured by it, in turn reducing public initiatives.

Beyond our time

Cultural heritage always becomes an arena of negotiation between political and economic interests. It also became an arena for creating kinds of memories that would be passed down to future generations.

Museum reforms should be understood as an interactive process. Both the public and the government should act as equal partners in utilizing the obtained cultural heritage for the betterment of all. Limiting our view to the government as the only authoritative party would narrow the room for exploration together. The public has the right and the capacity to participate even more deeply in the cultural ecosystem, since they are, in fact, the main engine driving it.

The repatriated cultural heritage as a part of the assets of the Indonesian cultural ecosystem offers massive potential to explore new fields of research, development of new disciplines and methodological approaches, and even provides a new career pool for humanities scholars and workers, especially with the emergence of new opportunities for researching the artifacts, or other activation programs.

Following the 2022-2023 Indonesian repatriation program, the Cultural Heritage Scholarship Programme for Indonesia (CHS) was established in 2024 through a joint Dutch-Indonesian effort, targeting early scholars and master’s students from Indonesia interested in enrolling in graduate programs at four leading Dutch universities.

Intensive cooperation between Indonesia and the Netherlands also commenced via the Rijksdienst van het Cultureel Erfgoed (RCE), which itself is part of the Ministry of Education, Culture and Science of the Kingdom of the Netherlands. Other overseas counterparts on the joint works also include the cultural consultative agency DutchCulture and a bipartisan agreement between Dutch and Indonesian universities.

The “caderization” of new researchers using education as the channel is the first important step. Preparing the implementation of the new knowledge gained by these first waves of cultural heritage specialists who are intended to manage the Dutch repatriated artifacts should become the next top priority.

Another issue is knowledge reproduction. The development of cultural heritage management in Indonesia should never depend solely on frameworks and methods derived from foreign countries or foreign researchers. Specific problems of cultural heritage management in Indonesia would never be similar with other countries.

There would also be different interpretations of the artifacts and their utilization for the Indonesian public. This would breed different results, methods, theories, and actions. Foreign researchers’ contributions in this field should be positioned as guidelines and tools for comparison.

Active public participation in cultural heritage issues would help foster a closer connection with the objects themselves, ensuring a more reflective and grounded approach to the creation of Indonesian history as a shared collective memory. This subsequently produced a more critical approach to Indonesian national consciousness.

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