AmCham Update Vol. 7 #091

Destry Promises Pro-Growth Policies at BI, Prabowo Says Oil and LPG Imports will end in Three Years, New Export Monitoring Body Names Commissioners in Formal Launch, AmCham meets New US Chargé d’Affaires, Malaysia Offers Cloud-Seeding Help, Manpower Law Revision Nears Completion

Aug 26, 2026

Destry Promises Growth and Stability as BI Governor ahead of Fit and Proper Test

As the sole candidate nominated to become the next Bank Indonesia governor, acting head Destry Damayanti is almost certain to pass the fit and proper test underway on Aug 26 in the House of Representatives (DPR). She will be the first woman to head the central bank.

As the proceedings began she told DPR Commission XI that she will support growth and job creation while ensuring financial stability if she gets the job.

The process comes at an edgy time for Indonesia, with businesses and investors uneasy about fiscal management, central bank autonomy and stock market transparency among other issues.

"BI is not only tasked with maintaining the stability %u2060of the rupiah exchange rate, the stability of the payment system and the stability of the financial system, but also with implementing a policy mix that can create an economic environment conducive to real sector growth and job creation," Destry told Commission XI in her opening remarks.

With the legislature dominated by parties allied with President Prabowo Subianto, Destry is widely expected to be confirmed following the sudden resignation in late July of former Governor Perry Warjiyo.

Destry needs to pass a plenary vote before being officially appointed by the president. A decision is expected on Aug 27 following the formal interview process.

Destry, a senior deputy governor previously, has been the front runner since Perry left. The announcement of her candidacy on Aug 10 gave a boost to the rupiah, which is currently trading at about 17, 700 to the US dollar after spending weeks below 18,000.

The rupiah is among Asia's worst performing currencies, down about 6 percent against the US dollar, while Indonesian stocks have fallen more than 25 percent this year.

Destry said exchange-rate stabilization efforts will continue under her leadership through smart intervention and pro-market monetary operations to ensure adequate liquidity for the economy.

Economists have said Cornell-educated Destry should bring policy continuity and stability to the Bank while maintaining a good working relationship with the president.

At her first meeting as interim governor last week, the central %u2060bank held rates steady, prioritizing rupiah stability. Analysts said the policy tone was unchanged from that of Perry.

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Prabowo Pledges to End Oil and LPG Imports within Three Years

President Prabowo Subianto has said Indonesia will end oil and liquefied petroleum gas (LPG) imports within three years as part of his push for energy self-sufficiency.

Speaking at the launch of the government’s 100 gigawatt-peak (GWp) solar power program in Jembrana, Bali, on Aug 25, Subianto said the target would be supported by expanded solar and geothermal capacity, increased gas development, and higher domestic oil output.

“With 100 gigawatts, with our geothermal resources, gas fields, and oil lifting that must continue to rise, we must not import even a single barrel of oil anymore,” Subianto said.

Subianto pointed to the rollout of B50 biodiesel as an early step toward reducing fuel imports. The government said Indonesia stopped importing diesel fuel following the launch of the 50 percent palm oil-based biodiesel in July, with the energy ministry estimating potential foreign-exchange savings of up to Rp 170 trillion.

However, the higher biodiesel blend increases domestic demand for crude palm oil (CPO). The Indonesian Palm Oil Association (GAPKI) estimates annual CPO requirements for B50 at around 16 million tons, about 3 million tons above B40 needs, raising the possibility of lower exports if production remains stagnant.

“If the implementation of B50 leads to a decline in exports, what will happen is a rise in global vegetable oil prices,” GAPKI Chairman Eddy Martono said, adding that tighter supply could also push up domestic CPO prices.

Indonesia remains heavily reliant on imported crude oil and refined products, consuming substantially more oil than it produces domestically. Subianto said expanding domestic generation and fuel production would be critical to narrowing that gap.

The target of 100 GW of new solar capacity within three years is a big ask compared to the existing 88 GW of national power-generation capacity from coal, oil, gas, geothermal and other sources.

Energy and Mineral Resources Minister Bahlil Lahadalia said the solar program would require substantial investment, while the government is also exploring compressed natural gas as a substitute for subsidized 3 kg LPG cylinders.

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New Export Monitoring Body Names Commissioners in Formal Launch

Danantara formally launched its new export arm, PT Danantara Sumber Daya Indonesia (DSI), on Aug 24 to tighten government control over the country’s key commodity exports, but the eventual role of the new company is still not clear.

CEO Luke Mahony, an Australian veteran of Vale Indonesia, said at the launch ceremony that DSI was still evaluating a plan to become an intermediary in exports of coal, palm oil and ferroalloys. Mahony was appointed in May to head DSI.

“An intermediary is where exports go through DSI. [In] the role of an intermediary, the relationship still remains between the current buyer and seller,” Mahony told reporters after the launch.

At the launch, DSI’s commissioners were also named. Tony Wenas, the CEO of Freeport Indonesia (PTFI), and Mari Elka Pangestu, who currently serves as presidential envoy for international trade and multilateral cooperation, are both commissioners. Defense sector businessman Syaifurrahman “Cipung” Noer is DSI’s president commissioner.

DSI was established as part of President Prabowo Subianto’s desire to plug what he describes as “leakages” in commodity exports, that include underinvoicing and transfer pricing.

In creating DSI on May 20, the president described it as a state-owned enterprise (SOE) that would export strategic commodities to monitor pricing before returning the export proceeds back to the original businesses. DSI began operations June 1.

It is unclear, however, which vision guides DSI. Danantara CEO Rosan Roeslani said on Aug. 14 that the government “had never planned” for DSI to become a sole exporter and that long-term contracts would not change.

“We will maintain the sanctity of contracts. For now, DSI’s role is to evaluate and monitor transactions, and most importantly, ensure transparency so that everything runs properly,” Rosan said at the launch event.

Danantara says DSI is connecting price, volume, quality, and other factors to gain an understanding of the real value of Indonesia’s strategic commodity exports.

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AmCham meets New US Chargé d’Affaires

AmCham Indonesia met with Joy M. Sakurai, the new US Chargé d’Affaires ad interim (CDA) for the US Mission to Indonesia, on Aug. 24 at the US Ambassador’s Residence. This was AmCham’s first engagement with Sakurai since her appointment on June 30.

The warm coffee discussion provided an opportunity for AmCham and its member companies to get acquainted with Sakurai, learn more about her and her team’s priorities, and exchange perspectives on the opportunities and challenges shaping Indonesia’s business environment. The discussion also touched on key policy developments affecting the business community and the broader trajectory for US-Indonesia economic relations.

Participants underscored many positive stories and strong opportunities in Indonesia, despite ongoing challenges. Regulatory clarity and certainty remain key factors in enabling American companies to operate, invest and expand in Indonesia.

We would like to thank CDA Sakurai for her time and valuable insights. We look forward to continued collaboration with the US Embassy in strengthening the US-Indonesia partnership and advancing shared opportunities for business in both countries. We also extend our gratitude to our members for their participation in the session.

Malaysia Offers Cloud-Seeding Help to Extinguish Indonesian Fires

With the annual plague of forest and peat fires in Kalimantan and Sumatra worsening, Malaysia has offered to help by conducting cloud-seeding operations to spur rainfall in Indonesian airspace.

The offer was unveiled on Aug 24 after Malaysia’s natural resources minister, Arthur Joseph Kurup, spoke with his Indonesian counterpart, Jumhur Hidayat, by phone.

Arthur said in a statement that Malaysia is ready to help extinguish the fires if the Indonesian government asks for assistance.

He also thanked Jakarta for granting Malaysia permission to use Indonesian airspace for cloud-seeding operations in shared border locations, noting that Malaysia’s disaster management agency and meteorological department are now preparing an operational schedule, which will be coordinated with the Indonesian Military (TNI).

The move comes as fires, fueled by a prolonged dry season and an intensifying El Niño, have created thousands of hot spots in Kalimantan and Sumatra, triggering a choking haze that threatens neighboring countries.

Malaysia’s Sarawak, which borders three of Indonesia’s Kalimantan provinces, has been worst hit by the haze, with six districts recording unhealthy air pollution readings this week, according to data released by Malaysia’s environment department.

Rains that could put out the fires are not expected before November.

Jumhur said that he welcomed Malaysia’s request, describing the planned cloud-seeding operations as mutually beneficial.

It is still unclear, however, that the cloud seeding will happen. TNI spokesperson Muhammad Nas said the authority over such operations falls under the Transportation Ministry because the aircraft involved are not military planes.

Other government agencies referred questions to other officials. Meteorology, Climatology and Geophysical Agency (BMKG) deputy for weather modification Tri Handoko Seto said the agency "had not issued any permit or other form of approval" for Malaysia to conduct operations in Indonesian territory.

Malaysian Prime Minister Anwar Ibrahim and Brunei Sultan Hassanal Bolkiah also have agreed to raise the issue at the ASEAN level.

President Prabowo Subianto visited fire-struck areas in Riau and South Sumatra on Aug 24. He ordered police to investigate companies suspected of being involved in the fires, which are often set to clear land for oil palm planting.

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Manpower Law Revision Nears Completion

Indonesia’s House of Representatives (DPR) is pushing to complete the revised Manpower Law as it tries to reconcile competing proposals from labor unions and employers, with outsourcing, severance benefits and job creation among the remaining areas of debate.

House Commission IX lawmaker Edy Wuryanto said around 80 percent of proposals submitted by labor groups had been accommodated in the draft. He said the positions of labor groups and the Indonesian Employers Association (APINDO) were around 70 percent aligned. The DPR is targeting completion of the bill by October.

However, Indonesian Labor Confederation (KSPSI) President Andi Gani Nena Wea said labor groups still do not know which proposals have been incorporated.

“We were told that 80 percent of inputs from the Grand Coalition for the Struggle of Indonesian Workers were accommodated, according to Commission IX leadership, but we do not know what that 80 percent is,” Andi said at the DPR complex on Aug 24.

He urged lawmakers to maintain transparency and carefully consider labor proposals as deliberations move forward.

The revision follows Constitutional Court Decision 168/PUU-XXI/2023 in October 2024, which partially revised employment-related provisions under the landmark Job Creation Law and instructed lawmakers to establish a standalone Manpower Law. The ruling addressed issues including foreign workers, fixed-term employment contracts, outsourcing, wages, termination and severance benefits.

House Commission IX member Netty Prasetiyani Aher said the new law must also respond to changes in the labor market, including the growing number of workers employed through digital platforms.

“The working world has changed. Regulations should also be able to follow changes to avoid workers being put under grey areas and losing protection,” Netty said on Aug 20.

APINDO Chairwoman Shinta Kamdani said the legislation should balance worker protections with the need to expand employment opportunities.

“I think this is important because job creation is also a key issue. So, whatever we call it, the important thing is that the substance of the policy must reflect that balance,” Shinta said on Aug 24.

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Update is AmCham’s regular newsletter on developments related to investment, the economy, regulations and issues related to doing business in Indonesia. It comes out three times a week. It is edited by AmCham Managing Director Donna Priadi and written by the AmCham Staff.

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