Prabowo Tells MSCI Indonesia Is Not Afraid
President Prabowo Subianto has responded to a warning from global stock index provider Morgan Stanley Capital International (MSCI) concerning Indonesia, saying he is not afraid of the threat.
As reported by detikcom on Thursday (22 October 2026), Prabowo was responding to MSCI’s proposal to downgrade Indonesia from emerging-market to standalone-market status. If implemented, the move could cause Indonesia’s capital market to lose substantial foreign investment inflows.
Reuters reported that foreign investors began selling shares, triggering capital outflows, on Friday (16 October), shortly after MSCI proposed the downgrade. The Jakarta Composite Index (IHSG) fell by as much as 11.6% that day.
The IHSG weakened again in trading on Monday (19 October), closing down 3.6%. The combined decline over the two trading days was steeper than any fall during the 1998 Asian financial crisis. The benchmark also hit a six-year low during the session.
In a separate Reuters report, several banks estimated that an MSCI downgrade could trigger passive outflows of US$3–6 billion, or Rp54–108 trillion.
Banking giant JPMorgan put potential passive outflows at US$4.8 billion, or Rp86.4 trillion, while UBS warned that active investors could withdraw a further US$15 billion, or Rp270 trillion.
Prabowo says Indonesia is not afraid
Prabowo addressed the warning during a cabinet meeting marking the second anniversary of his administration. He said MSCI’s announcement was intended to frighten Indonesia.
“We continue to face obstacles. There’s this and that — MSCI, all sorts of things,” Prabowo said in his briefing at the meeting, held at the Presidential Palace in Jakarta on Wednesday (21 October).
Speaking to his ministers, Prabowo said Indonesia was not afraid of MSCI’s announcement and described the country as one that does not give up easily.
“They want to frighten us. I will simply say to MSCI: the Indonesian nation fears no one and will not be intimidated,” Prabowo said.
“Ladies and gentlemen, we are not afraid. We have strength, we have courage, and we are willing to make sacrifices; we do not know the meaning of surrender,” he added.
Economic Affairs Minister says MSCI will not directly affect SEZ investment
Earlier, Coordinating Minister for Economic Affairs Airlangga Hartarto said sentiment following MSCI’s announcement would not directly affect investment in special economic zones (SEZs). He said MSCI’s concerns related only to governance in the capital market.
“MSCI has no connection with SEZs, because it relates only to governance in the capital market,” Airlangga said at the AA Maramis Building in Central Jakarta on Wednesday (21 October), as quoted by detikFinance.
Investment realised in SEZs reached Rp46 trillion from January to September 2026, equivalent to 67% of the 2026 target of Rp69.1 trillion. Airlangga remained optimistic that the target could be reached by the end of the year.
“SEZs are at 67% through the third quarter. We hope to reach 100% in the fourth quarter, as all the projects are currently under construction,” he added.