Indonesia Seeks to Calm Investors After Stocks, Rupiah Slide

Indonesian officials will seek to address concerns among investors and other key economic players about an economic downturn in Southeast Asia's biggest economy following a stock market selloff and currency slump, an official said on Thursday, March 27. 

President Prabowo Subianto will meet with investors and others following the long Eid-al-Fitr holiday, which begins on Friday, aiming to correct misperceptions about the government's policies, said Raden Pardede, a special aide to Indonesia's senior economic minister Airlangga Hartarto. 

"The government will improve and intensify communication with economic players," Raden told Reuters. 

The rupiah has fallen to its weakest since 1998, following a slide of as much as 7.1% in the main stock index (.JSKE) last week, pressured by concerns over government policy, the country's fiscal position and its growth prospects. 

Analysts mentioned poor government communication on fiscal policies and strategies to achieve growth as one of the selloff triggers, in addition to pressure on the market from negative global sentiment. 

Key messages will include assurances that the government will not break the legal fiscal deficit ceiling at 3% of GDP and there will be no political interference in the newly set up sovereign wealth fund Danantara Indonesia, Raden said. 

"We are also preparing ways to deregulate the real sector, mainly to encourage the manufacturing industry, which creates jobs and is export-oriented," he said referring to a policy that seeks to make available 20 trillion rupiah (USD 1.21 billion) in credit for labour-intensive industries. 

The government and financial authorities will also provide more investment instruments to attract investors and will ensure the quality of companies listed on the stock exchange, finance ministry spokesperson Deni Surjantoro told Reuters. 

Bank Indonesia said it is ready to continue its intervention to stabilise the currency, but said economic indicators show the country is fundamentally strong and the situation is "totally different" from 1998 financial crisis. 

On Thursday, the rupiah strengthened as much as 0.24% against the dollar. It has rebounded since Wednesday with BI citing positive sentiment in stocks, bonds and FX markets. The current level at around IDR 16,500 is still near 1998's level of IDR 16,800. 

After stocks tumbled last week, the financial regulator eased buyback processes, and the market has since recovered. 

"Markets will keep an eye on the mid-year budget update to gauge if the shortfall in revenues has narrowed or further spending rationalisation is required to keep within the 3% of GDP deficit threshold," DBS Bank economist Radhika Rao said in an e-mail. 

The mid-year budget update is usually handed down in early July. 

Rao said a long holiday will provide a break to the market, which will be shut from March 28 to April 7. 

Source: Reuters 

French Foreign Minister Launches Port Safety Program During Jakarta Visit 

France and Indonesia are set to bolster security cooperation in the region focusing on initiatives on seaport safety among other issues discussed during a visit by French Minister for Europe and Foreign Affairs Jean-Noël Barrot to Jakarta as part of his Asia tour.  

The minister oversaw the signing of a letter of intent between the European Union and Expertise France, a public agency for international technical cooperation, on the launch of the Global Ports Safety project in South and Southeast Asia, including Indonesia.  

The four-year project, part of the Indo-Pacific defense strategy that aims to strengthen security in the region, would allow France and the EU to provide funding through Expertise France to provide safety in 12 ports in the region.  

“Ensuring secure maritime connections is more important than ever, supported by France and the EU,” Barrot said during the signing event in Jakarta on Wednesday.  

The initiative focuses on providing training and workshops on safety and incident management for targeted ports, as explained by Global Port Safety project manager Victoria Dussardier of Expertise France. 
 

Among the recipients of the 8.5-million-euro (USD 9.17 million) program are two Indonesian ports, Tanjung Priok in Jakarta and Tanjung Perak in Surabaya. Other participating countries include Malaysia, Thailand, the Philippines, Vietnam, Cambodia, Bangladesh and Sri Lanka.  

"[A lot of] traffic goes through these countries, so you have many incidents in all ports and you can never be too safe. So the point [of the project] is to improve security and share good practices," she said, noting that the program would involve ministries and port authorities of respective countries in its implementation.  

Defense at the center  

In Indonesia, the initiative builds upon the existing defense cooperation with France, as reaffirmed during Barrot’s bilateral meeting with his Indonesian counterpart Sugiono at the Foreign Ministry in Jakarta earlier on Wednesday.  

Sugiono expressed his appreciation for the French parliament’s move to ratify the defense cooperation agreement with Indonesia. He also noted that both ministers agreed to hold a  dialogue between foreign and defense ministers of both countries to further discuss regional and global issues.  

“We have agreed to further enhance our partnership in this sector, as we consider maritime collaboration essential to ensure a stable, peaceful and prosperous Indo-Pacific,” Sugiono said during a press briefing after the meeting.  

After meeting Sugiono, Barrot headed to the State Palace to meet with President Prabowo Subianto. The President emphasized that defense cooperation, particularly in military modernization and technology transfer, remains a top priority for national stability, alongside collaboration in other sectors. 
 

Barrot was the second French minister to visit Jakarta and to meet with Prabowo and his cabinet members this year.  

French Armed Forces Minister Sébastien Lecornu came to Jakarta on Jan. 31, received by Defense Minister Sjafrie Sjamsoeddin at the Defense Ministry office in Jakarta. The meeting resulted in agreements on personnel exchange and training, joint military equipment production and technology transfer.  

Defense cooperation between Indonesia and France was established during Prabowo’s tenure as former president Joko “Jokowi” Widodo’s defense minister. At that time, the ministry oversaw several major defense procurements, including Rafale fighter jets and Scorpène Evolved submarines.  

Prelude to Macron’s visit  

Barrot’s visit to Indonesia also served as preparation for French President Emmanuel Macron’s visit to Jakarta later in May to mark the 75th anniversary of Indonesia-France diplomatic relations.  

“President Macron’s visit in May will mark the beginning of a new chapter in our relationship, with projects planned for the years and decades to come in various areas,” Barrot told reporters.  

Among issues on the agenda is regional security, as France is pursuing strategic partnerships with various Indo-Pacific countries and organizations, including Indonesia and ASEAN, as part of its strategy to address multilateral issues in the region, including security and defense. 
 

The Indo-Pacific region is undergoing profound strategic shifts amid China’s growing influence and territorial claims, alongside transnational threats driven by climate change. At the same time, France recognizes the region as a key driver of global growth, offering significant market opportunities.  

“As France, like Indonesia, upholds the identity of a non-aligned nation, favoring cooperation over confrontation,” Barrot said.  

Jakarta was Barrot’s second stop after visiting Singapore on Tuesday. He then continued his trip to China on Thursday and Friday.  

On Thursday, he met with Chinese counterpart Wang Yi, at which time he urged Beijing to help bring Russia to talks over ending its war in Ukraine, AFP reported. Both ministers also discussed economic ties, with Beijing and the EU both facing down tariffs by the United States and a trade spat of their own. 

Source: The Jakarta Post 
 

US Withdrawal to Not Affect JETP Funding: Minister

The United States' withdrawal from the Just Energy Transition Partnership (JETP) will not affect the funding commitment of the other nine member countries, Coordinating Minister for Economic Affairs, Airlangga Hartarto, has said. 
 
 

The US officially withdrew from the Paris Climate Agreement, and eventually, the JETP on March 5, 2025, based on the decision of President Donald Trump's administration. 
 
 

"America's withdrawal from the Paris Agreement and also the JETP does not reduce the commitment of the nine other countries to support net-zero emissions in Indonesia. So, there is no change from there," Hartarto said at a press conference here on Monday. 
 
 

Currently, the leadership of the JETP program has been handed over to Germany and Japan. The other members of the program consist of Denmark, England, Italy, Canada, Norway, France, and the European Union. 
 
 

These countries are members of the International Partners Group (IPG) and aim to help Indonesia achieve its emission reduction target of 31.89% independently and up to 43% with international support by 2030. 
 
 

As part of the JETP implementation, 54 projects have received international funding support with a total commitment of US$1.1 billion. 
 
 

Nine projects have received funding via loans or equity, while 45 projects have received grants worth USD 233 million. 
 
 

"Among others, Muara Laboh in West Sumatra is a program for geothermal and is expected to operate in 2027," Hartarto informed while enumerating the projects that have received funding support. 
 
 

"There are also several projects in the pipeline, both photovoltaic such as in Saguling, and also several other projects such as decarbonization or phasing out of Cirebon power," he added. 
 
 

The IPG has also secured a guarantee worth USD 1 billion through the Multilateral Development Banks (MDB) Guarantee to accelerate the implementation of clean energy transition projects. 

Source: Antara News