AGP Executive Report

AI Governance & Diplomacy: Indonesia has joined China-initiated WAICO as a founding member, with Coordinating Minister Airlangga Hartarto saying the move is meant to keep Indonesia from falling behind in AI and to shape global AI governance under President Prabowo’s direction. Digital Transformation: In Shanghai, Hartarto also met Chinese tech firms to discuss AI and cloud investment, cybersecurity, digital talent, and greener data-centre energy—linking AI adoption to government services and MSMEs. Energy & Fuel Policy: President Prabowo launched Indonesia’s B50 biodiesel programme, saying the country is the first to run diesel with 50% palm-oil biodiesel and projecting major CO2 cuts while reducing dependence on imported diesel. Education & Social Inclusion: The Education Ministry is drafting policies for schools with low enrollment, using Dapodik data and working with regional governments on learning quality, teacher capacity, and facilities. School Safety & Parenting: A case involving a bomb threat sent via WhatsApp to a primary school during MPLS highlights the role of father involvement under GAMAS, with child experts stressing emotional security for kids. Regional Mobility (Tourism): TransNusa will launch direct Bali–Phuket flights from 9 September, while Singapore’s STB and Traveloka expand destination promotions across key source markets including Australia. Anti-Corruption / Cross-Border Finance: Malaysia’s MACC is investigating KWAP’s RM200m loss tied to Indonesia’s eFishery, as Malaysia’s PM/Finance Minister Anwar says he will explain the facts in parliament.

Anti-Corruption & Governance: Coordinating Minister Yusril Ihza Mahendra said Indonesia’s corruption fight won’t work without stronger ethical and moral awareness, arguing laws and institutions like KPK are not enough. Oversight & Politics: A coalition of academics and civil society launched Indonesia’s first citizen-led “shadow cabinet,” saying it’s meant to fill a checks-and-balances gap under President Prabowo’s Red and White Cabinet. Papua Security & Services: Indonesian troops secured the Balinggama airstrip in Papua Highlands after separatists destroyed a mission aircraft, clearing wreckage so flights for remote communities can resume. Economy & Jobs: Bank Indonesia’s survey shows employment growth slowed in Q2 2026, with manufacturing the biggest drag, while other sectors saw weaker but positive absorption. Energy Policy: President Prabowo claimed diesel imports have stopped since July 2026 after B50 biodiesel expansion, framing it as energy independence that keeps money circulating domestically. Digital Diplomacy: Indonesia invited Huawei and ByteDance to support digital transformation and cybersecurity, tying cooperation to WAICO’s push for open AI governance. Social Policy: The government marked National Children’s Day (HAN) with messages urging children to dream big and protect basic rights under the Golden Indonesia 2045 vision. Trade & Industry: Indonesia is exploring poultry exports to China and the Middle East to absorb supply surpluses, while improving distribution and market access. International AI: China’s WAICO signed up 29 founding countries including Indonesia, positioning Shanghai as the hub for global AI governance. Regional Human Rights: Amnesty International Indonesia reported a wave of alleged attacks on transgender women in Bogor, highlighting discrimination and harassment risks.

World AI Diplomacy: Indonesia’s economic minister Airlangga met China’s FM Wang Yi in Shanghai, with both sides highlighting Indonesia’s role as a founding member of the World AI Cooperation Organization and pushing deeper AI investment and coordination. Regional Connectivity: InJourney Airports promoted six regional airports to boost ASEAN–China air links, aiming to capture rising China–Indonesia travel demand. Governance & Corruption Watch: Malaysia’s MACC opened an investigation into KWAP’s RM200m loss tied to Indonesia’s eFishery after alleged fraud and financial report manipulation. Border Management: Indonesia’s border agency BNPP discussed electricity tariff gaps with Papua New Guinea to keep power flowing for border residents in Wutung, alongside plans for shared facilities. Security & Military Drills: Australia’s Pitch Black 2026 air combat exercise kicked off with participation from 20 nations, underscoring heightened Indo-Pacific tensions. Health Law Debate: A legal commentary argues Indonesia’s “medical risk” framing in the Health Law can function as broad physician immunity, raising accountability concerns in malpractice cases. Public Services: East Java said it leads Sekolah Rakyat rollout, with land funded by the state budget and rapid campus construction progress.

World AI Governance: 29 countries signed in Shanghai to establish the World Artificial Intelligence Cooperation Organisation (WAICO), headquartered in the city, with Indonesia among founding members as it pushes “open and inclusive” AI governance. Indonesia–China Tech Ties: Coordinating Minister Airlangga invited Huawei and ByteDance to deepen Indonesia’s AI, cloud, cybersecurity, and digital government/SME transformation, while Chinese FM Wang Yi met Airlangga to reaffirm cooperation. Energy & Industry: Indonesia is courting Chinese firms for 100 GW solar power projects and is also moving ahead with biofuel policy talk (B50/B60) and the E20 push, including plans for up to 50 ethanol plants. Food Security & Land: The land agency says legal certainty over land rights is central to food security, alongside protection of agricultural land and cross-sector harvest coordination. Education Safety: The human development minister unveiled a seven-step strategy to make schools violence-free, including child protection teams and reporting systems. Governance & Corruption Spillover: Malaysia’s MACC opened an investigation into KWAP’s RM200m eFishery losses tied to alleged financial manipulation. Transboundary Haze: Singapore and the region brace for a “severe” haze season later this year, with Brunei, Indonesia, Malaysia and Singapore flagged as high-risk. Regional Diplomacy & Trade: Indonesia explores poultry export markets to China and the Middle East amid domestic oversupply, while KADIN discusses investment links with Pasay City in the Philippines.

National Energy Policy: President Prabowo says Indonesia will fully stop diesel imports from July 2026 after scaling the B50 biodiesel program, aiming to keep money circulating domestically and cutting emissions. Food Price Stabilization: The government expands Red and White Village Cooperatives into “offtakers” that buy key crops when prices fall below benchmarks and route social aid through the co-ops. Agriculture Overhaul: Prabowo pushes to complete sugarcane replanting nationwide within two years to boost sugar output and support bioethanol. Defense & Harvest Mobilization: Indonesia launches a nationwide military-assisted harvest across 43 locations, with TNI units supporting rice, sugarcane and soybeans. Domestic Industry Push: Prabowo signals a national electric motorcycle launch in weeks and a broader plan for locally built vehicles. AI Governance Diplomacy: Indonesia is among founding members of WAICO, a China-led global AI cooperation body headquartered in Shanghai, as Xi urges AI not to be dominated by one country. Regional Media Ties: Türkiye and Indonesia agree to deepen media and strategic communications cooperation. International Weather Risk: El Niño warnings intensify, with experts urging fast preparation for heat, droughts and floods that threaten food security. Sports (Indonesia in region): Indonesia beats the Philippines in SEA V Cup volleyball, while Alas Pilipinas falls to Indonesia and heads to classification matches.

AI Governance & Diplomacy: 29 countries signed an accord in Shanghai to establish the World Artificial Intelligence Cooperation Organization (WAICO), with Indonesia among founding members, as China’s Xi urged AI “symphony” cooperation and safeguards against single-country dominance. Copyright & Tech Regulation: Indonesia’s draft copyright overhaul would explicitly recognize AI in content creation, ban AI imitation of a creator’s distinctive style, require disclosure of AI use, and require platforms to compensate for news aggregation and AI training—setting up a potential clash with major tech firms. Energy Security & Industry: President Prabowo pushed a two-year sugarcane overhaul toward full sugar self-sufficiency, while also reviewing the Masela LNG push and stressing local hiring; separate coverage highlights Indonesia’s efforts to prevent blackouts through grid and fuel-supply coordination. Public Administration & Rural Economy: Red and White Village Cooperatives (KDMP) logged Rp56.8b in 2026 transactions, and the government plans to route subsidized goods and social aid through cooperatives to strengthen rural distribution and welfare. Law Enforcement: Police and customs raided a North Jakarta home-based etomidate drug production site, arresting a Singaporean suspect. Digital Crackdown: Indonesia says it has blocked 3.7m illegal gambling websites since 2024, suspending tens of thousands of bank accounts. Disaster Response: BNPB reported a Labuan Bajo wildfire fully extinguished after burning 25 hectares.

AI Governance Push: Indonesia is drafting a National AI Strategy, Road Map and ethics rules to move from basic AI use to deeper capability across government, health, finance and public services. Regional AI Diplomacy: 29 countries signed the agreement in Shanghai to create the World Artificial Intelligence Cooperation Organization (WAICO), with Indonesia among founding members. Economy & Finance: Indonesia cut micro-loan interest rates to 8% to support MSMEs, while investment growth remains subdued and the government is weighing long tax holidays for the planned Indonesia International Financial Center. State Business Watch: Pos Indonesia’s bond repayment default triggered a Fitch downgrade to “C,” raising questions about SOE resilience and Danantara’s support role. Energy Projects: Work is advancing on the Abadi Masela LNG project, with Prabowo and Inpex pushing construction and development plans. Security & Courts: Indonesia’s military probed an ammunition depot blast in East Java, while the Philippines’ Bar Works fraudster Renwick Haddow is set for sentencing after a long wait. Humanitarian: UN agencies warn that more than 500 Rohingya refugees may have died after two boats sank off Myanmar.

Abadi Masela LNG Launch: President Prabowo broke ground on the US$20.9bn Abadi Masela LNG project, calling it a cornerstone for Indonesia’s industrial push and insisting benefits must be shared fairly with investors. Energy Security & Domestic Priority: The government says at least 60% of gas will go to domestic use via PLN, PGN and Pupuk Indonesia, with Japan prioritized for the remaining export share. Regional Diplomacy: Prabowo also reiterated Indonesia is open to partnerships with all countries on mutual benefit, framing the project as proof of business certainty. Food & Trade: Agriculture Minister Andi Amran said Indonesia will pursue rice exports by leveraging higher global prices, surplus production and Bulog reserves, while talks with Malaysia and Singapore continue. Information Integrity: ANTARA urged a presidential regulation to strengthen state media’s role in combating disinformation. Digital Safety for Youth: The communications ministry backed school device restrictions to protect children from cyber risks, citing child online protection rules and a new education circular. Labor Rights at Sea: A report highlights Indonesian migrant fishers exploited on foreign fishing vessels after false promises. Humanitarian Crisis: UN agencies fear more than 500 Rohingya refugees died after boats capsized off Myanmar, underscoring ongoing dangerous sea journeys.

Free Meals Overhaul: President Prabowo orders a review of MBG beneficiaries, prioritizing low-income families and high-stunting areas, with possible removal of those deemed not in need and a push to update beneficiary data. Family Planning Push: Indonesia’s Population and Family Development Ministry targets households in the lowest income deciles to expand long-term contraception and accelerate stunting reduction through tighter coordination across health posts, clinics, and village administrations. Defense Diplomacy: Indonesia and Singapore reaffirm defense cooperation in Jakarta and launch a new Defense Alumni Forum to deepen military-to-military ties. Monetary Policy & Markets: Bank Indonesia says its June rate hikes helped pull in about Rp105 trillion in foreign inflows to government bonds and BI Rupiah Securities, supporting exchange-rate stability. Aviation & Training: Four T-50i jets and a C-130 support aircraft head to Australia for the Pitch Black 2026 exercise to boost interoperability. Capital Markets Watch: The IDX adds 37 firms to its high shareholding concentration list, using a new price impact ratio screening method amid heightened investor scrutiny. BRICS Labour Track: BRICS adopts a Labour and Employment Ministers’ Declaration in Hyderabad and India launches BRICS CONNECT for skilling and labour cooperation. Energy Policy Context: Indonesia’s B50 biodiesel push and nickel market policy shifts remain key drivers for commodities and downstream costs.

Education & Digital Safety: Indonesia’s Education Ministry urges parents to enforce the “3S” rule (screen time, screen zones, screen breaks) as it pushes a circular limiting student gadget use in schools. Nuclear Research: BRIN has restarted the TRIGA 2000 reactor in Bandung after modernization, supporting radioisotope and radiopharmaceutical development through 2027. Anti-Corruption & Justice System: President Prabowo ordered a direct report on the Febrie Adriansyah corruption/money laundering case after he resigned and was named a suspect; the government says anti-graft efforts continue. Free Meals Program Fallout: Catering operators protest the downsizing and moratorium on new kitchen centers tied to Prabowo’s free school lunch scheme, threatening legal action over sunk costs. Energy & Fisheries Support: Indonesia sets a special diesel price of Rp15,000 per liter for fishing vessels (30–200 GT) funded via BPDP, following Prabowo’s directive. Urban Governance: Jakarta plans to extend the LRT from Manggarai to Dukuh Atas, targeting completion by 2028. Environment & Health Risk: A study finds 52% of Jakarta schools sit within 5 km of documented contaminated sites, raising exposure concerns for hundreds of thousands students. Agriculture & Exports: The agriculture minister targets coffee exports to Rp100 trillion (US$6.25b) and promotes a one-stop export policy to improve commodity price bargaining power. International Ties: Indonesia and Vietnam sign a five-year action plan aiming to lift annual trade to US$18b by 2028, including defense and security cooperation.

Anti-Corruption Institutions: Indonesia’s AGO and the National Police chief publicly played down “rift” talk after police scrutiny tied to former special crimes prosecutor Febrie Adriansyah, as the probe follows raids that reportedly seized Rp 476 billion in cash and 74kg of gold. Macroeconomic Signal: S&P reaffirmed Indonesia’s BBB rating with a stable outlook, citing prudent fiscal/monetary policy, political stability, and relatively low public debt. Housing Policy: The agrarian ministry says Indonesia is preparing satellite cities to tackle the housing backlog, identifying 129,000 hectares of potential state land across multiple provinces. Energy & Transport: Rail operator KAI North Sumatra switched from B40 to Biosolar B50, aiming to cut emissions while keeping services stable; separately, a new container terminal at Patimban Port opened with Japanese support. Governance & Economy: The government is preparing inflation-control measures focused on volatile foods and packaging costs. International Links: Indonesia seeks defense cooperation with Finland (cybersecurity, data protection, maritime awareness) and invites Indonesian investors to Pakistan’s Sindh for ports and AI data centres.

Credit Confidence: Bank Indonesia welcomed S&P’s affirmation of Indonesia’s BBB investment-grade rating with a stable outlook, saying any fiscal and external weakening is temporary and should improve as policy implementation stabilises. Anti-Corruption Shock: Indonesia’s top anti-graft prosecutor resigned after police seized gold and cash, renewing questions about how police and prosecutors work together. Free Meals Fallout: Thousands of free-meals kitchen operators protested a moratorium tied to budget savings, saying permits were approved but kitchens can’t operate, risking lost investments. Biodiesel Politics & Supply: The B50 rollout is pushing demand for more CPO; industry says 2026 supply may be “safe,” but future output hinges on harvest conditions and El Nino. Energy Subsidy for Fishers: The government set a special Rp15,000 per liter diesel price for 30–200 GT fishing vessels, with the gap funded via BPDP rather than the state budget. Climate & Forest Carbon: Indonesia is expanding forest carbon trading, backed by rules to issue forestry carbon units and broaden community participation. Foreign Policy De-escalation: Indonesia urged the US and Iran to respect the Islamabad peace MoU and stop hostilities in the Strait of Hormuz. Trade Diplomacy: Indonesia and Vietnam reaffirmed a target of US$18 billion in bilateral trade by 2028, while also expanding cooperation on maritime security and digital economy.

South Jakarta Security: Police arrested a suspect over a bomb threat sent via WhatsApp to SD Srengseng Sawah 15 Pagi, triggering searches by bomb squad teams; no explosives were found and the case carries a 5–20 year sentence range. Energy & Climate Policy: President Prabowo pushed B50 biodiesel as a key step to cut CO2 and reduce reliance on imported diesel, while also announcing solar buildout and new dams as part of energy self-sufficiency. Anti-Corruption & Power Outages: Indonesia transferred the case file of former Deputy Attorney General Febrie Adriansyah for prosecution in a coal procurement scandal tied to massive losses and rolling blackouts. Food Governance: The free nutritious meal program is engaging about 148,000 local suppliers, with officials stressing rural economic spillovers and local sourcing. Waste-to-Energy Push: Danantara selected conditional partners for eight waste-to-energy clusters across 20 areas, following the first Bali project launch. Regional Diplomacy: Bulog continues talks with Malaysia and Singapore on rice export deals, with Prabowo instructing agreements must protect farmers. Digital Rights & Culture: A new defense policy classifies the “spread of LGBTQ culture” as a nonmilitary threat, aligning with broader criminal provisions. Environment Risk: A minister warned Jakarta faces rising sea levels and land subsidence, pointing to stricter spatial planning and a planned “Giant Sea Wall.”

Rice Diplomacy: Indonesia’s Bulog is still negotiating rice export deals with Malaysia and Singapore, waiting for counterparts to be ready on pricing and commercial terms—while President Prabowo wants any agreement to protect farmers. Education & Youth Governance: Indonesia’s deputy education minister urged students to join school councils as “miniature community life,” paired with weekly library reading habits to build literacy and character. Family Policy: The population minister pushed fathers to be more involved in parenting, including a policy allowing fathers to arrive late on a child’s first school day without pay cuts. Energy Security: Pertamina Patra Niaga received 45.9k tons of US LPG to secure domestic reserves, underscoring integrated procurement-to-distribution planning. Health System Upgrade: Indonesia and Takeda announced a multi-phased plasma-derived medicinal product ecosystem, starting with a $30m plasma donation and fractionation push. Cooperatives for Migrant Workers: KP2MI promoted stronger cooperatives to help migrant workers and families build sustainable livelihoods. EU Child Safety: EU officials backed age limits for social media use, recommending no access under 13 unless platforms prove safety. Regional Security: Indonesia’s Navy sent a warship and special forces to Russia for joint drills in Vladivostok, extending defense cooperation. Food Program Local Sourcing: The free nutritious meals scheme now involves about 148,000 local suppliers and will increasingly use Red and White Village Cooperatives to strengthen rural food self-sufficiency.

Healthcare Diplomacy: Takeda and Indonesia’s government announced a plasma ecosystem push after the Ministry of Health granted Takeda a plasma fractionation license, with an initial up to $30m investment to expand access to plasma-derived medicines. Public Health Accountability: A TB-focused campaign argues Indonesia and other countries must move beyond outdated microscopy and ensure every patient gets accurate, rapid testing to prevent missed cases and ongoing transmission. Finance & Policy Debate: Indonesia’s planned Indonesia International Financial Center (PFII) is pitched on Rp 300–500t inflow potential, but economists warn it’s a long-term aspiration given competition from established hubs. Environment & Governance: A major landfill fire near Jakarta has renewed calls to end open dumping, highlighting how methane and poor site management make fires hard to detect and extinguish. Regional Security: Russia says its strategic partnership with Indonesia and ASEAN has built a solid foundation for future ties, pointing to last year’s declaration. Rural Economy Push: President Prabowo unveiled “Red and White” village cooperatives offering micro and super-micro loans at 8% interest, aiming to circulate Rp223t annually within villages. ASEAN Peace Effort: ASEAN foreign ministers urged Myanmar to show demonstrable progress under the Five-Point Consensus, including detainee releases and humanitarian access.

Budget & Food Security: Indonesia’s Agriculture Ministry plans to boost agricultural development funding for Papua to accelerate priority commodities, improve farmers’ welfare, and strengthen food self-sufficiency. Child Protection in Religious Schools: The Religious Affairs Minister launched a National Movement for Safe and Comfortable Spaces for Children in pesantren and madrasah, pushing prevention, safe facilities, and cross-ministry coordination. Digital Infrastructure & Investment: The government is courting Nvidia to expand data center capacity by 1.3GW, alongside other big-tech and Telkom-linked plans. Internet Governance: Indonesia backs preparations for ICANN87 in Bali (Oct 17–22), with Komdigi coordinating with PANDI and ICANN. Regional Fiscal Pressure: The Home Ministry told local governments not to furlough PPPK contract workers, instead cutting nonessential spending first and using revenue-sharing support if needed. Creative Economy: The Creative Economy Minister highlighted Batak opera as a way to preserve culture and grow local jobs and MSMEs. Corruption Watch: KPK named a regent suspect in an infrastructure bribery and gratuities case, adding to a growing list of regional corruption probes. Energy & Environment: Indonesia is drafting an extended producer responsibility rule to make plastic packaging producers fund waste management via a Packaging Recovery Organization.