Energy Sovereignty as Indonesia's New Economic Path
Indonesia has long been known as a country rich in natural resources. Nickel, tin, palm oil, coal, gold, coffee, rubber, and various strategic commodities originate from Indonesian soil. Yet natural wealth does not automatically make a nation strong. For years, Indonesia has often merely been the place where commodities are mined or harvested. Prices, financing, trade, insurance, and most of the added value are determined and enjoyed abroad.
For this reason, President Prabowo Subianto’s plan to establish a mineral and strategic commodity exchange is one of the most intriguing ideas in the 2027 State Budget speech at the Nusantara Building, Parliament Complex, Senayan, Jakarta, on Friday (14/8/2026). The government is targeting the exchange to begin operations on 1 January 2027 under the supervision of the Financial Services Authority (OJK).
The idea is simple but strategic: Indonesia is no longer content to be merely a major producer. Indonesia must help shape prices, standards, data, and the global commodity trading ecosystem.
This step continues the government’s policy direction in safeguarding export revenue and foreign exchange. PT Danantara Sumber Daya Indonesia is said to have managed around US$14 billion in export proceeds, monitored more than 6,500 transactions, and identified potential additional foreign exchange of around US$5 billion in just over two months of operation.
These figures show that economic leakage does not always occur in the form of budget corruption. Leakage can also emerge through underinvoicing, price discrepancies, quality manipulation, transfer pricing, and export proceeds that do not enter the domestic financial system optimally.
The government’s efforts to close these gaps deserve appreciation. Every dollar of revenue saved can strengthen foreign exchange reserves, stabilise the rupiah, enlarge state revenue, and provide development financing.
In this context, the role of Minister of Energy and Mineral Resources Bahlil Lahadalia has become one of the key drivers of Indonesia’s natural resource sovereignty transformation. Under his coordination, mineral downstreaming policy, particularly for nickel, continues to be accelerated and has become a milestone in changing the national economic structure.
Indonesia is no longer merely exporting raw ore but has become one of the key players in the global electric vehicle battery supply chain. Exports of nickel derivative products, ferronickel, and stainless steel have increased significantly in recent years, strengthening Indonesia’s position in the future energy industry.
In addition, the energy and mineral resources sector has also recorded important achievements in strengthening non-tax state revenue. The contribution of the mineral and coal sector remains one of the largest contributors to the state budget, while also demonstrating the effectiveness of tighter supervision and mining permit arrangements.
In the energy sector, the acceleration of the energy transition is also becoming visible. The development of new and renewable energy such as geothermal, solar, and bioenergy continues to be promoted. Indonesia is currently among the countries with the largest geothermal potential in the world, and its utilisation continues to increase gradually.
Village electrification programmes and reducing dependence on fossil energy in remote areas are also part of the ministry’s broader agenda. This not only affects energy efficiency but also promotes more equitable access to electricity.
Efforts to strengthen mining governance have also become an important focus. Cracking down on illegal mining permits, digitalising licensing, and supervising production are steps that improve the extractive industry ecosystem, which has long been vulnerable to leakage.
However, the commodity exchange must not become merely a new building, a trading board, or an administrative obligation. The exchange must have liquidity, credible prices, a transparent database, quality standards, storage facilities, transaction settlement systems, hedging instruments, and the trust of both producers and international buyers.
The government needs to ensure that small players are not pushed aside. Coffee, rubber, and cocoa farmers, fishermen, small-scale legal miners, and regional processing businesses must gain access to price information and markets. If the exchange can only be used by large companies, price sovereignty will not automatically translate into public welfare.
For this reason, the exchange needs to be linked to warehouse receipt systems, production cooperatives, banking, insurance, testing laboratories, and digital platforms. Farmers with quality commodities should be able to store their products, obtain financing, see prices directly, and choose a more profitable time to sell.
Economic sovereignty is also visible in downstreaming policy. The government has initiated a number of projects to process coal into dimethyl ether, copper and gold, industrial salt, alumina into aluminium, and waste into energy. Downstreaming is necessary so that Indonesia does not continue to export jobs and added value along with its raw materials.
Yet downstreaming must not stop at building smelters. Its measure of success must include how much local content is used, the technology mastered, the Indonesian workers who are upskilled, the downstream industries that are born, and the share of added value that remains in the country.
The plan to optimise state-owned enterprise assets carries a similar spirit. The government has stated that it has closed 290 unproductive SOEs and entities and is targeting a leaner number of SOEs. Assets such as land, buildings, networks, airports, and underutilised areas will be opened for cooperation with the private sector through competitive and accountable processes.
This direction makes sense. The state does not have to operate all economic activities directly. The state’s role is to maintain strategic ownership, ensure the community