Indonesia’s President Prabowo Subianto has announced a major overhaul of the country’s natural resource export system. Under the new policy, the Indonesian government will appoint state-owned enterprises (BUMN) as the sole channels for exporting the nation’s natural resource commodities abroad. The policy was introduced during a plenary session at the Indonesian House of Representatives (DPR) in Jakarta on May 20, 2026.
The regulation is formalized through a Government Regulation (Peraturan Pemerintah/PP) on the Governance of Natural Resource Commodity Exports. According to President Prabowo, the objective of the policy is to improve the management of Indonesia’s resource exports and ensure that the country’s wealth contributes more directly to public welfare.
Prabowo explained that exports of strategic commodities including crude palm oil (CPO), coal, and ferroalloys must now be conducted through government-designated state-owned enterprises acting as single exporters. In practice, the appointed BUMN will serve as a centralized marketing and transaction facility.
Revenues from exports will still flow back to the private companies or operators producing the commodities, but the sales process itself will be supervised through the state entity. The government argues that this system will strengthen transparency, monitoring, and state control over export activities. It also aims to improve Indonesia’s bargaining position in global commodity markets by consolidating export channels.
As a follow-up to the regulation, Danantara Indonesia announced the establishment of a new subsidiary called PT Danantara Sumber Daya Indonesia. According to Danantara CEO Rosan Roeslani, the new entity will focus on ensuring transparency in export transactions and implementing the government’s export governance policy.
During the initial transition period from June to December 2026, exporters will only be required to report their transactions through the new system. This indicates that the government may adopt a phased implementation before enforcing full centralization.
The policy represents one of the most significant interventions in Indonesia’s commodity export sector since the downstream industrialization push introduced during the administration of Joko Widodo. It reflects a broader economic nationalism strategy aimed at increasing state influence over strategic resources.
One major benefit of the policy is stronger state oversight. Indonesia has long struggled with issues such as underreporting of exports, transfer pricing, illegal shipments, and tax leakage in the natural resource sector. By centralizing export transactions through a state-appointed entity, the government could potentially improve data accuracy and increase state revenues. Better monitoring may also reduce corruption and strengthen compliance with export regulations.
Another advantage is increased bargaining power in international markets. Indonesia is one of the world’s largest producers of coal, palm oil, nickel, and other commodities. If exports are coordinated through a centralized institution, the government may gain more leverage in determining prices, negotiating contracts, and stabilizing supply. This model resembles certain commodity marketing boards used historically in sectors such as oil and agriculture.
The policy may also support Indonesia’s industrialization goals. By controlling export flows more tightly, the government can prioritize domestic downstream industries and ensure raw materials are allocated strategically. This aligns with Indonesia’s ambition to move beyond exporting raw commodities and instead develop higher-value manufacturing industries such as electric vehicle batteries, steel processing, and biofuel production.
However, the policy also faces significant challenges and weaknesses. One of the biggest concerns is market efficiency. Centralized export systems can create bureaucratic bottlenecks, slower transaction processes, and administrative inefficiencies. Private exporters may face delays in approvals, payments, and documentation. International buyers who are accustomed to dealing directly with producers may also become uncertain about the new mechanism.
Another major risk is the creation of excessive state monopoly power. When a single entity controls exports, transparency becomes critical. Without strong governance, the system could create opportunities for rent-seeking, favoritism, political intervention, or corruption. Critics may question whether the appointed BUMN can operate competitively and professionally in highly dynamic global commodity markets.
There are also concerns about investor confidence. Indonesia has already implemented various resource-nationalist policies in recent years, including export bans on raw minerals. While these policies aim to strengthen domestic industry, foreign investors may perceive additional centralization as regulatory uncertainty. This could reduce long-term investment potentials, particularly from multinational commodity firms.
Operational capability is another issue. Managing Indonesia’s massive commodity export volumes is an enormous logistical and financial challenge. Coal, palm oil, nickel, and mineral exports involve thousands of companies, shipping arrangements, insurance contracts, and international trading relationships. The success of the policy will depend heavily on whether PT Danantara Sumber Daya Indonesia possesses the expertise, infrastructure, and credibility to manage these activities efficiently.
There is also the possibility of international trade tensions. Countries importing Indonesian commodities may argue that centralized exports distort market competition or violate free trade principles. If pricing becomes more politically controlled, Indonesia could face scrutiny from trading partners or international organizations.
In conclusion, Prabowo’s export governance reform represents an ambitious attempt to increase state control over Indonesia’s strategic natural resources. The policy could improve transparency, strengthen fiscal revenues, and strengthen Indonesia’s bargaining power in global markets.
At the same time, it introduces substantial risks related to bureaucracy, monopoly power, investor confidence, and implementation capacity. Its long-term success will depend on regulation, governance quality, institutional transparency, and the ability of state-owned enterprises to operate efficiently in the highly competitive global commodity trade environment.
Indonesia’s President Prabowo Subianto has announced a major overhaul of the country’s natural resource export system. Under the new policy, the Indonesian government will appoint state-owned enterprises (BUMN) as the sole channels for exporting the nation’s natural resource commodities abroad. The policy was introduced during a plenary session at the Indonesian House of Representatives (DPR) in Jakarta on May 20, 2026.
The regulation is formalized through a Government Regulation (Peraturan Pemerintah/PP) on the Governance of Natural Resource Commodity Exports. According to President Prabowo, the objective of the policy is to improve the management of Indonesia’s resource exports and ensure that the country’s wealth contributes more directly to public welfare.
Prabowo explained that exports of strategic commodities including crude palm oil (CPO), coal, and ferroalloys must now be conducted through government-designated state-owned enterprises acting as single exporters. In practice, the appointed BUMN will serve as a centralized marketing and transaction facility.
Revenues from exports will still flow back to the private companies or operators producing the commodities, but the sales process itself will be supervised through the state entity. The government argues that this system will strengthen transparency, monitoring, and state control over export activities. It also aims to improve Indonesia’s bargaining position in global commodity markets by consolidating export channels.
As a follow-up to the regulation, Danantara Indonesia announced the establishment of a new subsidiary called PT Danantara Sumber Daya Indonesia. According to Danantara CEO Rosan Roeslani, the new entity will focus on ensuring transparency in export transactions and implementing the government’s export governance policy.
During the initial transition period from June to December 2026, exporters will only be required to report their transactions through the new system. This indicates that the government may adopt a phased implementation before enforcing full centralization.
The policy represents one of the most significant interventions in Indonesia’s commodity export sector since the downstream industrialization push introduced during the administration of Joko Widodo. It reflects a broader economic nationalism strategy aimed at increasing state influence over strategic resources.
One major benefit of the policy is stronger state oversight. Indonesia has long struggled with issues such as underreporting of exports, transfer pricing, illegal shipments, and tax leakage in the natural resource sector. By centralizing export transactions through a state-appointed entity, the government could potentially improve data accuracy and increase state revenues. Better monitoring may also reduce corruption and strengthen compliance with export regulations.
Another advantage is increased bargaining power in international markets. Indonesia is one of the world’s largest producers of coal, palm oil, nickel, and other commodities. If exports are coordinated through a centralized institution, the government may gain more leverage in determining prices, negotiating contracts, and stabilizing supply. This model resembles certain commodity marketing boards used historically in sectors such as oil and agriculture.
The policy may also support Indonesia’s industrialization goals. By controlling export flows more tightly, the government can prioritize domestic downstream industries and ensure raw materials are allocated strategically. This aligns with Indonesia’s ambition to move beyond exporting raw commodities and instead develop higher-value manufacturing industries such as electric vehicle batteries, steel processing, and biofuel production.
However, the policy also faces significant challenges and weaknesses. One of the biggest concerns is market efficiency. Centralized export systems can create bureaucratic bottlenecks, slower transaction processes, and administrative inefficiencies. Private exporters may face delays in approvals, payments, and documentation. International buyers who are accustomed to dealing directly with producers may also become uncertain about the new mechanism.
Another major risk is the creation of excessive state monopoly power. When a single entity controls exports, transparency becomes critical. Without strong governance, the system could create opportunities for rent-seeking, favoritism, political intervention, or corruption. Critics may question whether the appointed BUMN can operate competitively and professionally in highly dynamic global commodity markets.
There are also concerns about investor confidence. Indonesia has already implemented various resource-nationalist policies in recent years, including export bans on raw minerals. While these policies aim to strengthen domestic industry, foreign investors may perceive additional centralization as regulatory uncertainty. This could reduce long-term investment potentials, particularly from multinational commodity firms.
Operational capability is another issue. Managing Indonesia’s massive commodity export volumes is an enormous logistical and financial challenge. Coal, palm oil, nickel, and mineral exports involve thousands of companies, shipping arrangements, insurance contracts, and international trading relationships. The success of the policy will depend heavily on whether PT Danantara Sumber Daya Indonesia possesses the expertise, infrastructure, and credibility to manage these activities efficiently.
There is also the possibility of international trade tensions. Countries importing Indonesian commodities may argue that centralized exports distort market competition or violate free trade principles. If pricing becomes more politically controlled, Indonesia could face scrutiny from trading partners or international organizations.
In conclusion, Prabowo’s export governance reform represents an ambitious attempt to increase state control over Indonesia’s strategic natural resources. The policy could improve transparency, strengthen fiscal revenues, and strengthen Indonesia’s bargaining power in global markets.
At the same time, it introduces substantial risks related to bureaucracy, monopoly power, investor confidence, and implementation capacity. Its long-term success will depend on regulation, governance quality, institutional transparency, and the ability of state-owned enterprises to operate efficiently in the highly competitive global commodity trade environment.
