Economist Supports Police Probe into Alleged Energy Sector Irregularities

Economist Ferry Latuhihin has expressed his support for the National Police’s Corruption Eradication Corps (Kortas Tipidkor) in thoroughly investigating alleged irregularities in the national energy supply chain. According to him, professional, transparent, and comprehensive law enforcement is key to restoring public and investor confidence while safeguarding national economic stability. Ferry stressed that the fight against corruption must not stop at field-level perpetrators. He urged Kortas Tipidkor to examine all parties suspected of having knowledge of, involvement in, or connections to the case, including the Junior Attorney General for Special Crimes (Jampidsus) if the investigation uncovers leads pointing in that direction. “The courage of Kortas Tipidkor in uncovering alleged irregularities in the energy sector is a step that deserves appreciation and support, because firm law enforcement is key to improving overall energy governance, restoring public and investor confidence, and preventing future state losses,” Ferry said in a statement received on Wednesday (9/7). He noted that the alleged irregularities in the national energy supply chain not only impact potential state losses but could also erode public trust and affect macroeconomic stability. He assessed that the preliminary investigation, which indicated weaknesses in procurement, distribution, and supervision, could potentially trigger an investor confidence crisis if not addressed promptly. He cautioned that amid rising food inflation and increasing global bond yields, negative sentiment from the case risks accelerating capital outflows and putting pressure on the rupiah exchange rate. Ferry also assessed that disruptions to the energy supply chain could reduce industrial competitiveness, diminish foreign investment interest, and hinder job creation. If the issue is linked to systemic weaknesses in coal procurement or electricity supply, the impact is expected to widen, increasing production costs, disrupting energy-intensive industrial operations, slowing economic growth, and intensifying pressure on the rupiah. To prevent broader impacts, Ferry urged swift, transparent, and thorough law enforcement, accompanied by a comprehensive audit of PLN and the national energy supply chain. He argued that an audit is necessary to uncover the root of the problem, including possible discrepancies between supply needs and realisation, weak oversight, or practices that benefit certain parties. Ferry added that restoring market confidence can only be achieved through a combination of firm law enforcement, comprehensive audits, and consistent information disclosure. These steps are considered important for maintaining rupiah exchange rate stability while protecting the national economy from greater systemic risks.