Middle East Turmoil: Immigration Policy as an Instrument of Economic Resilience

Amidst global geopolitical uncertainty, the escalation of conflict between Iran, Israel and the United States has created “high volatility fluctuations” in the global trade balance. Should the conflict map expand further, Indonesia’s immigration policy will no longer merely serve administrative functions. The governance of human mobility across borders will become increasingly interlinked with trade stability, investment, and national supply chain resilience.

This situation is exacerbated by strict protocols implemented in the Strait of Hormuz, a critical distribution route through which one-fifth of global oil supply and one-quarter of global liquefied natural gas supply passes. This has driven energy import prices beyond US$100 per barrel. For Indonesia, the impact is directly felt on the fiscal side. Rising global oil prices risk significantly increasing energy import expenditure whilst constraining fiscal space through increased subsidy burdens.

The pressure extends beyond the energy sector alone. Global supply chain disruptions that frequently accompany geopolitical conflicts can trigger rising logistics costs and disrupt domestic industrial activities. In such circumstances, Indonesia is strengthening economic resilience through reconfiguration of global supply chains towards more resilient models and de-risking strategies through international trade cooperation schemes. This is undertaken to exploit alternative market opportunities available to fill supply gaps resulting from such disruptions.

One of the most significant developments is the finalisation of the Agreement on Reciprocal Trade (ART) with the United States in February 2026. This agreement creates broader opportunities for Indonesian exports to the US market through tariff reductions on various flagship products. Simultaneously, Indonesia is strengthening trade cooperation with Iran through a Preferential Trade Agreement (PTA) scheme that opens export-import access for several strategic commodities.

The economic benefits of such trade agreements will not be optimal unless the mobility of business operators, investors, and professional workers across borders is managed adaptively. Human movement often serves as a gateway to business partnerships, technology transfer, and the development of broader production networks.

Without responsive immigration policies, plans for strategic alliances to integrate more resilient global supply chains will be difficult to realise fully. This will directly impact Indonesia’s strengthening position as an Indo-Pacific economic hub.

Here, reformulation of immigration policy emerges as a strategic pillar to strengthen economic collaboration with Iran and the United States whilst building national resilience. Initiatives to strengthen immigration policy can be focused on three fundamental areas:

First, facilitating talent and investor exchanges to support supply chain diversification. Global geopolitical tensions are driving many countries, including Indonesia, to reduce dependence on Middle Eastern energy supplies. Through more flexible policies such as talent visas, investor visas, or skilled worker visas processed more expeditiously, Indonesia can attract investors and experts to develop alternative supply chains. This scheme also creates opportunities for talent exchange, increased remittances, knowledge transfer, and the formation of joint ventures with companies from the United States and Iran in non-energy sectors.

Second, maintaining stable implementation of the Preferential Trade Agreement between Indonesia and Iran. This agreement opens trade access for products such as processed foods, pharmaceuticals, textiles, and rubber from Indonesia, as well as imports from Iran including oil, chemicals, and aluminium. Strengthening immigration policy through business mobility programmes allows Iranian business operators to invest in Indonesia’s manufacturing sector without excessive bureaucratic obstacles. This is important because geopolitical conflict is pushing Iran to seek new economic partners outside Western regions, whilst Indonesia requires investment to strengthen domestic industries.

The same approach is equally relevant to the implementation of the ART with the United States. The mobility of business operators, investors, and business executives will intensify for investment negotiations, industrial inspections, and technology transfer. Reformulation of immigration policy through expedited business visas, investor visas, talent visas, and programmes such as Second Home Visas can accelerate investment realisation whilst strengthening trade cooperation.

Third, immigration policy can serve as a strategic instrument to maintain stability of the national trade balance. With a neutral and pro-business approach, Indonesia can attract alternative investment from non-conflict countries such as European and East Asian nations, whilst expanding diversification of trading partners.

Strengthening immigration policy also encompasses protection for Indonesian migrant workers. Well-managed repatriation and reintegration programmes can ensure remittance flows remain stable. This is important because remittances from Indonesian workers in the Middle East reach billions of dollars annually and contribute towards domestic consumption and stability of the national balance of payments.

Turmoil in the Middle East demonstrates that immigration policy is no longer merely related to border control. In an increasingly interconnected global economy, the management of human mobility has become part of the strategy to maintain trade, investment, and national economic resilience amidst increasingly dynamic global geopolitical change.