Foreign Media Suddenly Highlights '9 Dragons', What's Happening?

The South China Morning Post (SCMP), a Hong Kong-based media outlet, has suddenly turned its attention to the dynamics between the Indonesian government and the group of tycoons often dubbed the ‘Nine Dragons’. According to analysts cited by the media, the landscape of relations between the state and big business is entering a new chapter as the government’s role in economic management grows. In its report titled ‘Are Indonesia’s Prabowo and ultra rich ’9 Dragons’ on a collision course?‘, SCMP explains that the term ’9 Naga’ is not an official group but a long-used label to describe several of Indonesia’s largest conglomerate families. Their businesses span various sectors, from banking and property to palm oil, mining, and consumer goods. SCMP assesses that the direction of Indonesia’s economic policy indicates a larger role for the state, particularly in the management of natural resources and export proceeds. Policies under the spotlight include the mechanism for Export Proceeds (DHE) and the establishment of Danantara Sumberdaya Indonesia (DSI) to manage exports of strategic commodities. Chief Investment Officer of Four Capital, Ricky Ho, stated that practices like under-invoicing and transfer pricing are a concern for the government, especially regarding large exporters. He noted that the government’s measures aim to strengthen oversight of foreign exchange flows and export activities. Meanwhile, Bhima Yudhistira Adhinegara, Executive Director of the Center of Economic and Law Studies (CELIOS), assessed that such policies could be seen as a signal for large business groups to align more closely with the government’s policy direction. However, he also cautioned about the need to maintain market confidence to avoid triggering concerns over the investment climate or capital outflows. On the other hand, University of Melbourne Professor Vedi Hadiz judged that the relationship between the state and conglomerates in Indonesia remains fundamentally symbiotic. He noted that large business groups still derive most of their revenue from domestic activities, while the government needs private sector support to finance its strategic programmes. He described the relationship as a ‘symbiosis’ that is likely to continue. SCMP also highlighted the Patriot Bonds instrument, which is offered to institutional investors and large business groups. Some analysts view this programme as an effort to broaden private sector participation in financing national projects, although its implementation has also sparked various discussions among economic observers. Overall, the media concluded that Indonesia’s policy changes reflect an effort to strengthen the state’s role in managing the economy. However, analysts interviewed predicted that the relationship between the government and the major conglomerates is expected to remain intact, as both parties have intertwined interests in supporting national economic growth.