President eyes US$908 billion in “lost” revenue as Jakarta plans a state-controlled export gateway and tighter FX rules.
Indonesia will force key commodities like coal and palm oil through a single state-appointed exporter and lock all export earnings into state banks, in a sweeping bid by President Prabowo Subianto to tighten control over natural resources and shore up the weakening rupiah.
Centralised Export Gate For Key Commodities
In a fiery May 20 speech to Parliament, President Prabowo Subianto said his government will issue a regulation requiring major commodities, starting with palm oil and coal, to be sold abroad only via a government‑selected state-owned enterprise (SOE) acting as sole exporter. He claimed Indonesia had lost as much as US$908 billion in revenues over the past 34 years because raw materials were “sold on the cheap.” “All sales of our resources, from palm oil, coal must be through a state-owned enterprise selected by the government,” he said, framing the move as a constitutional duty to ensure that “the earth, water and all the resources within it must be enjoyed by all Indonesians.”
Phased Rollout And Danantara Oversight
Senior Economic Minister Airlangga Hartarto said the first phase will cover coal, palm oil and ferroalloy, with a review every three months to decide which commodities to add. There will be a three‑month transition period during which exporters and buyers can continue trading as usual, while the appointed SOE monitors transactions. Rosan Roeslani, head of sovereign wealth fund Danantara Indonesia, said this transition could be extended until the end of 2026. After that, all covered exports must go through the state‑appointed firm, which will itself be overseen by Danantara.
100 Per Cent FX Retention To Support Rupiah
As part of a separate regulation effective June 1, all exporters of natural resources will be required to park 100 per cent of their export earnings in Indonesian state-owned banks. Airlangga said the rule is intended to stabilise the rupiah, which has slumped to record lows in recent days. By forcing foreign exchange to remain onshore, officials hope to strengthen liquidity in the domestic currency market and slow capital outflows, even as market participants worry about reduced flexibility and higher transaction costs.
Market Jitters And Fears Of New Distortions
Rumours of the centralised export plan had already rattled investors, triggering concerns about future pricing mechanisms and squeezed trader margins. Jakarta’s benchmark stock index fell 3.5 per cent on May 19 and dropped another 2 per cent on May 20 before trimming losses. University of Indonesia trade economist Rizki Siregar warned that a new export‑control agency “may create more distortions instead of being the solutions to the distortions, on top of already severe distortions that exporters face.” Critics fear added bureaucracy, politicised allocation of export rights and reduced competitiveness for Indonesian suppliers in global markets.
Resource Nationalism Versus Revenue Reality
Prabowo argues that, despite Indonesia’s status as a G‑20 member and the world’s largest exporter of thermal coal and palm oil, the state has failed to capture enough value from its resource endowment. The new measures target under‑invoicing and opaque transfer pricing, which officials say erode tax and royalty collections. Supporters see the plan as a long‑overdue assertion of resource nationalism; sceptics question whether centralisation and tight FX retention will genuinely boost state revenue or simply discourage investment and drive more trade into informal channels. For Indonesians and Singaporeans, the outcome will shape regional commodity flows, pricing and investor sentiment in a market closely watched by global energy and agribusiness players.
Indonesia’s push to centralise key commodity exports and force foreign‑exchange earnings into state banks reflects President Prabowo’s determination to squeeze more revenue from coal and palm oil while propping up a fragile rupiah. Whether the strategy delivers higher state income or deepens market distortions will depend on how transparently the new export gateway is run, how quickly investor confidence can be maintained, and whether broader fiscal and monetary credibility is strengthened alongside headline‑grabbing controls.
Sources: Straits Times (2026) , Reuters (2026)
Keywords: Centralised Export Agency, State Owned Enterprise Sole Exporter, Airlangga Hartarto Announcement, Danantara Indonesia Oversight, 100 Per Cent FX Retention Rule, Market Distortion Concerns
