Indonesia's Prabowo expands state export watchdog role, flags $5 billion gap

Indonesian President Prabowo Subianto said on Friday that the newly formed state export entity, Danantara Sumberdaya Indonesia (DSI), will broaden its oversight of key commodity shipments, though it will not take direct control of exports. The announcement came during his second Independence Day address to parliament, where he framed the move as a safeguard against the exploitation of the nation's natural resources.

"We do not want the Indonesian people to be cheated anymore," Prabowo said, adding that the entity has identified a potential $5 billion in export proceeds stemming from discrepancies between reported and actual prices. The plan, first unveiled in May, initially rattled global commodity markets as it targeted palm oil, coal, and ferroalloy exports to combat under-invoicing.

In its first two months, DSI has monitored over 6,500 transactions across the three key commodities, overseeing exports worth $14 billion. Prabowo stated that this monitoring will soon expand to cover 50 ports and, in the short term, will manage all strategic commodity exports, not just the initial three.

Acknowledging ongoing challenges, the president conceded that not all national problems have been resolved. However, he expressed confidence that investment will create jobs and that economic growth could reach 6% by the end of the year. His administration has faced headwinds this year, including a depreciating rupiah, a weak stock market, and concerns over fiscal discipline and central bank independence.

Later on Friday, the government is set to unveil its 2027 budget proposal, a key event for investors seeking clarity on policy direction and credit rating risks. Prabowo also touted achievements in his self-sufficiency drive, citing success in eight food commodities and secure food supply despite El Nino threats, alongside a crackdown on illegal tin mining and improvements at state companies.