Kadin: Business Sector 'Just Surviving' Amid Global Pressures

The Indonesian Chamber of Commerce and Industry (Kadin) has revealed that the business sector is holding back on investment expansion and opting for a survival strategy due to dual pressures from domestic and global factors. The statement was made by Kadin’s Deputy Chairman for Fiscal and Monetary Policy, Kamrussamad, during the INDEF Mid-Year Review National Seminar in Jakarta on Thursday (25/6/2026).

Kamrussamad explained that rolling blackouts remain a serious problem for domestic industries, including small and medium enterprises (UMKM) whose raw materials require 24-hour processing but are disrupted by a lack of electricity supply and minimal backup generators. On the global front, geopolitical conflicts over the past two to three years have disrupted trade flows and increased production costs, particularly for industries reliant on imported raw materials paid for in foreign currency while their products are sold in rupiah.

He noted that these conditions are forcing a number of companies to prepare options for furloughing employees with a maximum payment of 50 percent of their base salary without formal termination. From the 187 business associations gathered under Kadin, he observed that the situation in the real sector is not favourable, exacerbated by a global interest rate hike moving towards a high-rate regime in the last one to two months.

Kamrussamad also highlighted that volatile food inflation has already exceeded 6 percent, a stark contrast to the government’s narrative of controlled inflation. He argued that Indonesia is experiencing ‘premature deindustrialisation’ because the national economic structure over the past two decades has not been oriented towards strengthening manufacturing, instead relying on domestic consumption. He contrasted this with Malaysia’s development of the semiconductor industry or Singapore’s focus on hospitality, both of which are reflected in the composition of companies listed on their respective stock exchanges.

Regarding energy subsidies, Kamrussamad noted that the 2026 state budget allocation for energy subsidies and compensation reached Rp402.4 trillion, yet the supporting ecosystem for clean energy transition is still considered weak. This is reflected in the carbon market, which was launched in 2024 but has yet to see significant transaction growth. He urged that the use of green energy become part of the business world’s investment style, citing the example of a business group that successfully penetrated the European export market after its smelter adopted clean energy.