AmCham Update Vol. 7 #093

Earning Retention Rules Eased for Mining Exporters, Danantara to Send $6.8 Billion in SOE Dividends to State Budget, NU Elects New Leader, Prabowo Turns Down IMF Loan Offer, Groundbreaking for Kalimantan Coal Gasification Plant, Gov’t Popularity Continues Decline in Latest Survey

Sep 01, 2026

Starting September 2026, AmCham Update will now be published twice a week, every Tuesday and Friday.

Earning Retention Rules Eased for Mining Exporters

The government has relaxed the provision on the placement of Natural Resources Export Proceeds (DHE SDA) for the mining sector through Article 18A of Government Regulation (PP) 21/2026.

According to the provision, mining exporters who meet the criteria can place 30 percent of their DHE SDA domestically for a minimum of three months, a relaxation from an earlier announcement of 100 percent of export proceeds placed for one year.

It also released the names of the countries covered by Article 18A – the United States, China, Hong Kong, Australia, and Canada. The five were selected based on the size of their investments in the Indonesian mining sector and existing bilateral trade agreements with Indonesia.

Secretary of the Coordinating Ministry for the Economy Susiwijono Moegiarso said in a written statement on Aug 30 that the relaxed scheme has several objectives.

“The three main objectives of the policy include supporting macroeconomic stability and deepening the domestic financial market, encouraging financing of development, especially investment and working capital for the acceleration of natural resource downstreaming, and increasing investment and export performance from the activities of exploration, management, and processing of natural resources,” he said.

The relaxation applies not only to the amount and duration, said Susiwijono, exporters can also place proceeds in designated foreign exchange banks. There are five state-owned and 10 privately owned foreign exchange banks.

The special facility is effective Sep 1. Exporters who meet the criteria but do not wish to use the facility may choose not to use the new provisions of DHE SDA by submitting a statement to Bank Indonesia no later than five working days after the announcement of the list of exporters.

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$6.8 Billion in SOE Dividends will go to the State Budget After All

In a reversal of its original intent, state asset fund Danantara is expected to remit Rp 120 trillion (US$6.8 billion) in dividends from state-owned enterprises (SOEs) to the state budget this year, according to Finance Minister Purbaya Yudhi Sadewa.

Purbaya revealed the sum on Aug 29 and said it had been agreed on with Danantara CEO Rosan Roeslani and President Prabowo Subianto.

The infusion could help narrow Indonesia's budget deficit, which reached 2.92 percent of GDP last year, near the legal maximum of 3 percent.

“All that’s left to decide is when to transfer it; around Rp 120 trillion. That’s what the President decided,” Purbaya said, as quoted by Kompas.com.

In 2024, the year before Danantara was established, SOEs transferred Rp 86.4 trillion in dividends to the state. When Danantara went into operation in 2025, it received the dividends, which were to be used for expansion and reinvestment.

That idea lasted a year.

Purbaya said the dividends would be recorded as nontax revenue. Asked whether the sum would be the same next year, the minister said that was up to the President.

The state budget is under pressure from the weakened rupiah and rising costs for energy imports due to unrest in the Middle East.

“We want to increase the efficiency of our revenue, and we want our budget to be more sustainable moving forward. We’ll make use of every avenue, including income from Danantara,” said Purbaya.

The Financing and Risk Management Directorate General said on Aug. 11 that government debt had reached Rp 10.3 quadrillion as of June 30, the highest ever in absolute numbers. In relation to the size of the economy, the debt stood at 41.26 percent of GDP at midyear, slightly exceeding the 41.1 percent of GDP seen at the end of 2021, when the country was battling the coronavirus pandemic.

Purbaya said that 2026 is not over yet and the debt “could go down a little bit.” He said the current figures are far from the 60 percent legal cap imposed after the monetary crisis in 1997 and 1998 that ended in the reformasi era.

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Nahdlatul Ulama Elects New Leadership

Nahdlatul Ulama (NU) has elected East Java cleric Abdul Hakim Mahfudz, widely known as Gus Kikin, as chairman for the 2026–2031 term during the organization’s 35th National Congress in Jombang, East Java, on Aug. 31.

Gus Kikin previously chaired the group’s East Java chapter and is caretaker of Pondok Pesantren Tebuireng; he is the great-grandson of NU’s founder, Hasyim Asy’ari.

He was unanimously elected by the nine-member Ahlul Halli wal Aqdi (AHWA) council from a shortlist of five candidates following closed-door deliberations.

“After deliberating on the five proposed candidates, AHWA members unanimously decided to select Abdul Hakim, commonly known as Gus Kikin, as NU chairman,” AHWA member Anwar Iskandar said on Aug. 31.

The other candidates were Zulfa Mustofa, Abdussalam Sochib, incumbent chairman Yahya Cholil Staquf, and Abdul Ghaffar Rozin. The AHWA also reappointed Miftachul Akhyar as Rais Aam, NU’s supreme leader, for the 2026–2031 term.

The congress was marked by protests over a rule requiring prospective chairmen who had held political office to observe a one-year cooling-off period before becoming eligible to run. Demonstrators objected and called for changes to the congress rules.

Organizing committee chairman Saifullah Yusuf, popularly known as Gus Ipul, described the tensions as part of the normal dynamics of the congress and said organizers were working toward consensus. In his inaugural remarks, Gus Kikin called for NU to strengthen unity and social cohesion, pledging to lead the organization in a calmer and more cohesive direction.

Founded in 1926, NU has built a century-long legacy as an organization deeply rooted in Islamic tradition, making it the world’s largest Islamic organization. The Congress was opened and closed by President Prabowo Subianto, showcasing the importance of the organization to the government as a moral force and a massive bloc of votes.

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Prabowo Rejects IMF Offer, Seeks to Limit Foreign Borrowing

President Prabowo Subianto has said Indonesia turned down an International Monetary Fund (IMF) loan offer, maintaining that the country could finance development without relying heavily on external borrowing.

“Thank you, but Indonesia can still manage without an IMF loan,” Subianto said on Aug. 31 at the closing of Nahdlatul Ulama’s 35th National Congress in Jombang, East Java.

The offer was first disclosed in April after Finance Minister Purbaya Yudhi Sadewa attended the IMF-World Bank Spring Meetings in Washington, DC. Purbaya said the IMF and World Bank had prepared around $20-30 billion in support for countries facing geopolitical and energy-market pressures, but Indonesia did not need the financing because its fiscal position remained relatively strong.

At the time, Purbaya pointed to a fiscal reserve of nearly $25 billion and said the State Budget remained adequate without additional support.

Subianto said the government would continue to limit borrowing while remaining open to investment.

“We are now trying not to borrow too much from various sources. Investment is welcome. But if we borrow money, we want loans with the lowest possible interest rates,” Subianto said.

The president also said the government was pursuing large-scale savings, including through the restructuring and closure of underperforming state-owned enterprises. He put annual savings at around Rp 300 trillion, although he did not provide a detailed breakdown.

Indonesia’s external debt stood at $453.4 billion in the second quarter of 2026, up 4.4 percent year-on-year, according to Bank Indonesia. Government external debt accounted for $216.3 billion, while private external debt stood at $194.6 billion.

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Ground Broken for Landmark Kalimantan Coal Gasification Plant

The government broke ground on Indonesia’s first coal gasification plant at the Batuta Chemical Industrial Park (BCIP) in East Kalimantan on Aug 31, setting in motion a long held vision of converting low grade coal into methanol.

Attempts had been made during the administration of former President Joko Widodo on such a project but those deals stumbled over a variety of hurdles. The new National Strategic Project is designed to produce around 1.3 million tons of methanol annually and could reduce foreign exchange spending by as much as Rp 7.1 trillion ($400.6 million) per year by replacing imports, according to the government.

“This groundbreaking marks the beginning of concrete steps to develop a coal-based methanol industry,” Deputy Energy and Mineral Resources Minister Yuliot Tanjung said in a statement. “The project is part of our efforts to increase the added value of natural resources, strengthen domestic industries, reduce dependence on imports, and support national energy security and self-sufficiency.”

The project is being developed by Bumi Etam Chemical (BEC), a joint venture between Arutmin Indonesia and Kaltim Prima Coal, on a site of approximately 943 hectares. The project will use low-calorie coal, which has limited export value, as feedstock to produce higher-value products.

%uFEFFOnce operational by 2029, the facility is expected to process up to 7.78 million tons of coal annually.

The coal will be converted into methanol to meet domestic demand, largely from the petrochemical and formaldehyde industries. It is also expected to support the production of Fatty Acid Methyl Ester (FAME), a component of the biodiesel used for the coming B50 program, which blends diesel fuel with 50 percent biodiesel.

Yuliot said the project also will generate broad economic benefits in the form of jobs and growth in supporting industries.

BEC President Director Rio Supin said engineering work on the project began in July. “This first coal gasification project in Indonesia is ready to enter the implementation stage, with commissioning targeted for 2029,” Rio said.

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Public Approval of Government Performance Continues to Decline

Support for the cabinet and programs of President Prabowo Subianto’s government has continued to decline, according to a new national poll released by Poltracking Indonesia on Aug 31.

The survey found public satisfaction with government performance dropping to 55.1 percent in August 2026 from 72.2 percent in May and 58.4 percent in July.

Senior Poltracking researcher Masduri Amrawi said on Aug 31 that the government continues to enjoy a public trust rating of 63.2 percent, which gives it room to address areas of concern.

The overall decline is due to public concerns over the price of basic needs, unemployment and the performance of the government’s priority programs, the pollster said.

Satisfaction with the cabinet also fell, with 51.9 percent of respondents saying ministers are underperforming and a reshuffle is needed. 27.9 percent said no reshuffle is necessary.

The survey highlighted concerns over several government programs, particularly the Free Nutritious Meals (MBG) initiative. While over 90 percent of those surveyed were aware of the free meals program, that did not translate into satisfaction.

Hanta Yuda AR, chairman of Poltracking Indonesia, said the main challenge for the MBG is implementation. “MBG has succeeded in terms of its program’s vision, but has failed to translate or implement that vision effectively, which has instead become its weakness or shortcoming,” Hanta said.

Satisfaction with the National Nutrition Agency (BGN), which oversees the program, stood at 42.1 percent. The figure has steadily declined from 53.5 percent in October 2025.

Support for continuing the program has also fallen, with just 42.1 percent of respondents wanting MBG to continue, down from 51.9 percent in May and 46.8 percent in July. Respondents cited concerns including the taste and nutritional quality of the food, unsuitable side dishes and food poisoning incidents.

As a result of the survey, Poltracking had several recommendations for the government. These are:

1. Protect Purchasing Power and Create Jobs

2. Improve Priority Programs

3. Improve Governance and Public Communication

4. Strengthen Law Enforcement and Anti-Corruption Efforts

5. Strengthen Checks and Balances

The survey was conducted face-to-face with 1,220 adult respondents in August.

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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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