Centralisation of Natural Resource Exports Is Not the Right Solution

Indonesia’s government decision to centralise the export of natural resource commodities through a one-stop mechanism involving state-owned enterprises (BUMN) as announced by President Prabowo Subianto in his speech to the House of Representatives (DPR RI) on 20 May 2026 marks a very drastic paradigm shift in the governance of the national economy. The government justifies it on the basis of strengthening the sovereignty of natural resources in line with the interpretation of Article 33 of the 1945 Constitution, with the main argument that the state must have full control over strategic commodities to prosper the people. Operationally, the government has established a scheme called a ‘marketing facility’, whereby all processes of exporting commodities such as palm oil, coal, and ferroalloys must pass through a designated state-owned enterprise. Producing companies continue to manufacture, but international transactions, pricing, and foreign exchange receipts are managed by that state entity. The government’s objectives are highly ambitious: to improve transparency of transactions, curb foreign exchange leakage estimated at hundreds of billions of US dollars, and root out underinvoicing and transfer pricing that have harmed the state. The government aims to optimise state revenue, which it believes has been eroded by exporters’ non-compliance in reporting the actual export values. Underinvoicing is a criminal act, a form of economic crime involving falsified documents or tax evasion that breaches customs and taxation laws. As a criminal matter, its handling should be through firm law enforcement, forensic investigations, and the use of better monitoring technologies, not by transforming the market structure into a state monopoly. If the government feels the need to take over export channels simply because it cannot eradicate the underinvoicing mafia, this implicitly acknowledges the weakness of the law enforcement system itself. Changing business players into entities that must pass through the BUMN to avoid crime is not proportionate. Legally, the actions punished by underinvoicing are clearly provided for in the Customs Act and the General Provisions on Taxation Act. If a mafia is rampant, then the institutions that should be addressed are the supervisory agencies such as the Directorate General of Customs and Excise and the Directorate General of Taxes, not by weakening exporters’ autonomy. The legal approach must remain within the framework of enforcing the law, not through a market-manipulating system that creates new barriers for a growing domestic business sector. Furthermore, this policy creates dangerous overlaps of authority in the monetary sector. By fully controlling export proceeds in dollars and centralising them in the hands of the state or the BUMN, the government is effectively taking over the function of monetary stabilisation that should reside with Bank Indonesia. If the state controls all export proceeds (DHE), the foreign exchange mechanism will be significantly distorted. Bank Indonesia, which should act as the conductor in maintaining rupiah stability through monetary policy, would lose a natural market instrument because dollar liquidity would be controlled by government administrative policy. This could generate high uncertainty in financial markets, where exporters lose direct access to the dollar liquidity they need for working capital and to meet foreign currency debt obligations. The most worrying negative consequence of this centralisation is the risk of economic-political rent-seeking behaviour. When the government designates the BUMN as the main gateway for exports, there will be a bottleneck highly attractive to rent-seekers. Centralising exports on the basis of rentier economics is essentially a transfer of sovereignty from a market that is supervised to a closed bureaucracy labyrinth, where corrupt practices are no longer merely private residue, but metamorphose into a concrete wall of power immune to public oversight.