Unified Export Control: Is Indonesia Moving Toward 'State Advancement, Private Retreat'?

Follow Shanhai Map — Mountains and Seas Are All Chartable. Indonesia’s ambitions are growing ever larger. After Prabowo assumed office, the government established the national sovereign wealth fund Danantara, aiming to bring more strategic resources under state control. DSI — Danantara Sumberdaya Indonesia — is the Danantara subsidiary responsible for strategic resource exports. In short, DSI may soon be involved in *all* of Indonesia’s resource export business. Market anxiety mounted — prompting DSI recently to hold a closed-door briefing, revealing several key points. We’ll now unpack these insights for your reference. For decades, Indonesia has served as a global supplier of natural resources. While resources flowed steadily overseas, the Indonesian government observed a troubling reality: higher export volumes did not necessarily translate into higher national revenue. From Jakarta’s perspective, current resource exports suffer from two major forms of value leakage: First, under-invoicing. For example: A shipment of coal with an actual market value of USD 100 million might be declared at only USD 80 million for export purposes. As a result, export duties and resource taxes collected by the government shrink accordingly — while the unreported profit remains offshore. Second, transfer pricing. Many multinational conglomerates first sell their Indonesian-produced goods at artificially low prices to their own overseas affiliates (e.g., in Singapore, Hong Kong, or Dubai), which then resell them at market rates to end customers. Though the resources originate in Indonesia, profits ultimately accrue in low-tax jurisdictions — draining Indonesia of tax revenue, domestic profit retention, and resource-added value. Hence, since the Jokowi administration, Indonesia has emphasized keeping not only resources but also processing — and, crucially, profits — within its borders. Why ban nickel ore exports? To compel foreign firms to build smelters and battery plants locally, rather than merely purchasing raw ore. Why promote domestic smelting? To shift exports toward high-value finished products — not just commodities. Why establish Danantara? To centralize strategic resource management and maximize national returns. The launch of DSI follows precisely the same logic — except this time, the reform focus shifts from the *production* side to the *export* side. DSI stands for PT Danantara Sumberdaya Indonesia, a wholly owned subsidiary of the national sovereign fund Danantara. Under the current plan, exports of coal, crude palm oil (CPO), and ferroalloys (primarily nickel-based products) will all require DSI involvement. Many readers immediately worry: Does this mean *all* exports must now be sold exclusively to the government? DSI clarifies it intends to function primarily as a “transaction facilitation platform” — not a state-run trading company. What does that mean? Enterprises retain full autonomy to negotiate contracts and pricing directly with overseas buyers and complete transactions independently. DSI’s role centers on overseeing export procedures, verifying transaction prices, and enhancing overall transparency across the export system. This approach proves significantly more moderate than earlier market expectations. Below, we analyze five critical commitments announced by DSI.

Indonesia’s 2026 Economic Indicators Overview: Three Core Dimensions to Understand New Opportunities for Overseas Expansion

• More Focused Industrial Investment: Foreign investors are prioritizing new-energy sectors (lithium-ion batteries, electric vehicles), semiconductors, mineral smelting, and the digital economy. For instance, BYD and VinFast have confirmed plans to commence localized EV production in Indonesia in March 2026; multiple semiconductor firms are likewise expanding their Indonesian investments — accelerating downstream industrial transformation. • More Balanced Regional Deployment: With six newly designated economic zones now operational, foreign investment is gradually spreading beyond Java Island. Kalimantan focuses on green-energy manufacturing; West Java builds an EV industry cluster; East Java specializes in halal industries. These new zones — offering tax incentives, streamlined approval processes, and other preferential policies — have become fresh hotspots for foreign capital inflows, effectively alleviating previous regional development imbalances. Additionally, Indonesia is actively pursuing accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It expects to formally launch its accession process in 2026; successful entry could boost foreign direct investment (FDI) by 11%, further broadening channels for inbound capital. III. Import-Export Statistics: Trade Surplus Continues, Structure Progressively Optimizes As an export-oriented economy, international trade remains a pillar of Indonesia’s economic growth. In 2026, Indonesia sustained its multi-year trade surplus, with both import and export volumes expanding steadily — while trade composition continued improving: non-oil-and-gas goods became the dominant export category, and imports increasingly aligned with domestic industrial development needs. 1. Exports: Clear Targets, Non-Oil-and-Gas Goods as Core Drivers The Indonesian government has set a 2026 export target of USD 315.31 billion — a 7.09% year-on-year increase, slightly below the 7.1% growth projected for 2025, reflecting the high base effect following recent rapid export expansion. Preliminary data shows that in January 2026 alone, exports reached USD 22.16 billion — up 3.39% year-on-year — laying a solid foundation for achieving the annual target. By composition, non-oil-and-gas exports dominate: In January 2026, such exports totaled USD 21.26 billion — up 4.38% year-on-year — driven strongly by surging shipments of vegetable and animal oils (+46.05%), nickel and related products (+42.04%), and electrical machinery and parts (+16.27%), which offset declines in oil-and-gas exports. Meanwhile, oil-and-gas exports fell sharply to USD 890 million — down 15.62% year-on-year — dragged down by falling natural gas exports and zero crude oil exports. By destination, China, the United States, and India remain Indonesia’s top three non-oil-and-gas export markets. Together, they accounted for 43.77% of Indonesia’s total exports in January 2026 — with exports to China alone reaching USD 5.27 billion, underscoring the deepening trade ties between the two nations. 2. Imports: Demand-Driven Growth, Composition Aligned with Industrial Needs In January 2026, Indonesia’s imports totaled USD 21.20 billion — up 18.21% year-on-year. Oil-and-gas imports amounted to USD 317 million (+27.52% y-o-y), while non-oil-and-gas imports reached USD 1.804 billion (+16.71% y-o-y). Imports across all categories posted year-on-year growth, reflecting robust demand tied to industrial development priorities.

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