AmCham Update Vol. 7 #102

Prabowo keeps Shuffling the Cabinet Deck, Career Diplomat takes over Foreign Minister Job, West Java Data Center Project Suspended, Trade Surplus Spikes in August, Danantara to Open Hong Kong Office

Oct 02, 2026

Prabowo Continues to Reshuffle Cabinet

President Prabowo Subianto reshuffled his cabinet on Oct 1, appointing 18 officials, including new leaders for the National Police, political and security affairs, industry, foreign affairs and downstream industrialization.

Suyudi Ario Seto, formerly head of the National Narcotics Agency (BNN), was appointed National Police chief, replacing Listyo Sigit Prabowo, a close ally of President Joko Widodo. House of Representatives (DPR) Commission III completed Suyudi’s fit-and-proper test on Oct. 1 after receiving Subianto’s nomination the previous day. Suyudi was subsequently inaugurated and promoted to four-star general.

Listyo was appointed Presidential Chief of Staff, while former Army Chief of Staff Dudung Abdurachman became Coordinating Minister for Political and Security Affairs, replacing Djamari Chaniago.

The reshuffle appeared to take aim at some allies of Widodo and may be seen as a way for Subianto to further consolidate power.

Golkar Party Secretary-General Muhammad Sarmuji, was appointed Industry Minister, replacing Agus Gumiwang Kartasasmita, who was appointed to the post by Widodo in 2019. Sarmuji said labor-intensive industries, including textiles and footwear, would be among his priorities, with the ministry also expected to coordinate with other ministries on investment, trade and industrial incentives.

Bahlil Lahadalia retained his position as Energy and Mineral Resources Minister while taking on the new role of Coordinating Minister for Downstream Industrialization and Energy Transition. The new coordinating ministry is intended to bring downstream industrialization and the energy transition under a single coordinating structure.

“The president considers downstream industrialization and energy transition important, as part of Indonesia’s commitment under the Paris Agreement,” Bahlil told reporters on Oct. 1.

Other appointments included Luky Alfirman – who was previously dismissed as Director General of Budget Financing by then Finance Minister Purbaya Yudhi Sadewa – and Nurkholisoh Ibnu Aman as deputy finance ministers; Nuzran Joher as head Ombudsman; and Dedi Prasetyo as head of the National Agrarian Reform Agency.

Subianto also moved political appointee Sugiono out of the foreign minister’s post to become coordinating minister for human development, replacing Pratikno. Career diplomat Arrmanatha Nasir became foreign minister.

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Career Diplomat takes over Foreign Minister Job

President Prabowo Subianto has appointed Arrmanatha Christiawan Nasir as the new Foreign Minister, marking his second senior cabinet change within the past three weeks, the other being the sacking of Purbaya Yudhi Sadewa as Finance Minister. Arrmanatha was sworn in along with 17 other officials as part of a major cabinet reshuffle.

Former Foreign Minister Sugiono, a political appointee, was reassigned as Coordinating Minister for Human Development and Cultural Affairs, replacing Pratikno.

Speaking to reporters following his appointment on Oct. 1, Arrmanatha said that he would ensure that the country’s diplomacy maintained its consistency amid a complicated global landscape.

“Whoever assumes the role of foreign minister has a clear reference: our laws, our foreign policy, [point to] the free and active principle,” he said, adding that Indonesia’s bid for a non-permanent seat at the UN Security Council for the 2029-2030 period was also a priority action.

Born in Bangkok in 1971, Arrmanatha has served in a wide range of roles in the Ministry of Foreign Affairs. Notable appointments include serving as Ambassador to France and as Indonesia’s Permanent Representative to the United Nations. He also served as the ministry’s spokesperson during President Joko Widodo’s first term. In 2021, Subianto appointed him deputy foreign minister.

Dewi Fortuna Anwar, foreign policy analyst at the National Research and Innovation Agency (BRIN), said the appointment heralds a central role again for the foreign ministry in shaping Indonesia’s foreign policy.

"He can be a foil to Prabowo," Dewi said, adding that the foreign ministry will be under pressure to scrutinize every diplomatic deal more carefully. The post of foreign minister is traditionally held by a senior diplomat. Sugiono came from Subianto’s Gerindra Party and is not a trained diplomat.

Arrmanatha said he will continue Indonesia’s foreign policy in line with Subianto’s directives. “We will continue what Mr. Sugiono has done very well, and we will also follow the directives of the president because, ultimately, the foreign policy mandate rests with the president,” he said at the Foreign Ministry after his inauguration.

There are currently no plans to fill Arrmanatha’s former role, leaving the ministry with two deputy ministers: Arif Havas Oegroseno and Anis Matta.

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West Java Data Center Project Suspended Over Permit Concerns

West Java Governor Dedi Mulyadi has temporarily halted construction of a 640-megawatt (MW) artificial-intelligence data center owned by Singapore-based BDx Data Centers’ in Jatiluhur, Purwakarta over an incomplete environmental impact assessment and other permits.

“The project was not halted because it violated environmental rules, no. It was halted because the permits have not been issued,” Dedi said on Sept 29 in a video posted to his YouTube account.

The project, known as CGK4, broke ground on Sept 22 and is expected to be developed over three years. BDx said it has secured 845 megavolt-amperes (MVA) of grid capacity from state electricity company PLN, as part of more than 1.2 gigavolt-amperes (GVA) secured across its AI campuses in Indonesia.

The suspension has also drawn attention to the project’s high demand for water. The facility is located around 5 km from the Jatiluhur Dam, a major source of water for Greater Jakarta and irrigation in West Java. The project is expected to initially require around 6,000 cubic meters of water per day, with demand potentially rising to 384 liters per second as the facility expands.

Dedi has called for the project’s water-use and environmental assessments to be made public, particularly to ensure that the data center does not affect water supplies for farmers. He said the provincial government respects private investment projects but civil society groups have called for a deeper assessment of the project’s potential impact on local water resources.

The allocation is said to be below Purwakarta’s 3-cubic-meter-per-second drinking water allocation from the Jatiluhur reservoir set by the Public Works Ministry.

The suspension comes as Indonesia seeks to expand data center capacity to support its digital economy and artificial intelligence development. Coordinating Minister for Economic Affairs Airlangga Hartarto has said national data center capacity is expected to increase from around 580 MW to 1.5 gigawatts with anticipated new investments.

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Indonesia’s Trade Surplus Beats Expectation for August

Indonesia exceeded expectations by posting a $3.55 billion trade surplus in August, Statistics Indonesia (BPS) data showed on Oct 1, well above market expectations. It was the largest surplus since September 2025, and beat the forecast in a Reuter’s poll of $630 million.

BPS official Aten Hartono said on Oct 1 that exports increased across Indonesia’s main commodities – crude palm oil (CPO) and coal, as well as iron and steel. “Indonesia’s export value in August reached $26.61 billion, up 6.72 percent compared with August 2025,” Aten said.

The large surplus could help calm nerves about Indonesia's worsening fiscal condition, after the country posted its biggest deficit since 2018 %u2060in the April-June quarter.

Imran Faiz, an economist at Bank Danamon, said the surplus provides a near-term foreign exchange buffer but the figure is "precarious rather than structural." He attributed the improvement to softer-than-expected imports.

Imports rose 19.09 percent on a yearly basis to $23.06 billion, below the 31.14 percent rise the Reuters poll forecast.

"We therefore remain cautious on the external outlook, particularly as the terms-of-trade backdrop has become less favorable," said Imran.

Danamon also expects Bank Indonesia to further tighten monetary policy due to external pressures, he said.

In addition, the annual inflation rate rose slightly to 3.28 percent in September from 3.19 percent the previous month, BPS data showed on Oct 1, in line with market expectations and within the central bank's target range.

Meanwhile, the S&P Global Purchasing Managers’ Index (PMI) rebounded back into confident territory increasing from 49.8 in August to 52.4 in September, exceeding the 50-point threshold that separates expansion from contraction.

The improvement was led by stronger demand, as new orders increased at the fastest rate since February. Export orders also increased for a second consecutive month and at the fastest rate since May 2022.

The improvement in new business translated into an increase in manufacturing output. “The Indonesian manufacturing sector had a strong end to the third quarter,” said Trevor Balchin, economics director at S&P Global Market Intelligence, in the report that was released on Oct 1.

Strong import growth is expected with improvement in the PMI, while exports could face softer demand, said Bank Permata economist Faisal Rachman.

He forecast the current account deficit to widen to 2.49 percent of GDP in 2026 and stay around that level in %u20602027, which may push Bank Indonesia into keeping its tighter monetary policy stance.

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Danantara to Open Hong Kong Office

Indonesian sovereign wealth fund Danantara will establish a branch office in Hong Kong as it looks to expand its investment footprint, Bloomberg reported on Sept 29.

Danantara registered holding and finance subsidiaries in Hong Kong on March 23, Bloomberg wrote.

Citing anonymous sources, Bloomberg reported the fund is looking for seasoned investment specialists and scouting for an office location in Hong Kong.

Danantara has yet to issue a statement on the matter.

The report said Hong Kong-based executive Sisi Liu would lead Greater China and North Asia investments for Danantara. Her LinkedIn profile shows nearly 20 years of investment experience.

According to the government, Danantara manages assets worth roughly $900 billion. However, the majority is non-liquid and consists of infrastructure for state-owned enterprises (SOEs).

In August, Danantara chief investment officer Pandu Sjahrir said the fund intends to outsource some of its investments to hedge funds as a way to diversify its portfolio.

A separate Bloomberg report said the fund had allocated a $1 billion private credit mandate that same month to Swiss global equity firm Partners Group, a move Pandu said was part of the fund’s mandate to invest both domestically and globally.

In early August, Danantara invested $2.5 billion in a joint venture for the Australian and New Zealand operations of Brazil’s JBS NV, the world’s largest meat processor, giving it a 25 percent stake in the new venture.

Danantara has also signed deals with sovereign funds in Jordan, Qatar, China and Russia. On Sept 24, it announced the signing of a memorandum of understanding with French defense firm Thales to explore projects in AI, defense systems, digital technologies and cybersecurity in Indonesia.

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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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