Middle East Conflict Claimed Not to Disrupt Domestic Trade
The Indonesian Minister of Trade, Budi Santoso, believes that the conflict between the United States–Israel and Iran does not disrupt domestic trade. ‘If we talk about the impact of the war, it does not disrupt us domestically,’ he said at the Ministry of Trade complex in Jakarta on Thursday, 5 March 2026.
He also touched on the prices of foodstuffs which, in his view, remain stable, particularly in areas affected by floods in Sumatra. In addition to price considerations, Budi said there is currently no disruption to the domestic supply of foodstuffs.
On the purchasing power side, Budi said public demand is rising. He noted that the increase in purchasing power signals a positive condition amid global geopolitical dynamics.
Budi said household consumption is the largest contributor to gross domestic product (GDP). ‘We must maintain that momentum so that it is not greatly affected later by this war,’ he said.
Although domestic trade is not disrupted, Budi said geopolitical turbulence will influence changes in the export map. He said political dynamics also disrupt global supply chains, thereby hindering exports and imports. However, he stated there are gaps that entrepreneurs can exploit as a consequence of supply-chain disruptions.
The approach is to encourage entrepreneurs to diversify markets toward countries experiencing supply shortfalls due to global supply-chain disruptions. For example in Africa or Southeast Asia. ‘But we also must be vigilant, we survey properly to determine whether that region is indeed heavily affected,’ he said.
The exporters targeted for market diversification are micro, small and medium enterprises (MSMEs). He said the majority of MSME entrepreneurs are still new to exporting, making them more adaptable to short-term market diversification.
Budi said he plans to meet with Indonesian exporters’ representatives, including the Indonesian Exporters Association. He explained the meeting aims to discuss problems faced by exporters, including potential market diversification. Moreover, there are exporters who also import raw materials for their production processes.
He stated the Ministry of Trade has not yet calculated the potential decline in Indonesia’s export performance due to the Iran conflict. He admitted he had not received explanations from entrepreneurs. However, he said he had conducted a study of the potential decline in exports with the Trade Policy Agency of the Ministry of Trade. ‘We hope that our expectations will be fulfilled; the war ends quickly,’ he said.