Prabowo's Efforts and Hopes Amid the US-Israel War Truce with Iran

Amid the current global dynamics shrouded in uncertainty, where global logistics have yet to return to normal, lead times, insurance costs, and shipping fees remain high, supply chains have not recovered, and energy uncertainty is significant, there are always seeds of hope for a better tomorrow.

For this reason, wise and bold initiatives are needed to end the current gloomy period. Despite being enveloped in numerous problems, Indonesia still possesses potential and seeds to realise a better future, thanks to the investment commitments secured by President Prabowo Subianto from his series of working visits to several countries.

These days, many communities in various countries are enduring difficult times for various reasons, primarily due to war. This includes the entire Indonesian society. Since March 2026, 85 countries have had to raise fuel prices.

The main reason for the fuel price hikes is supply disruptions due to the closure of the world’s main oil distribution route, the Strait of Hormuz.

A two-week ceasefire in the US-Israel war with Iran has indeed been implemented. However, this ceasefire will not immediately change the situation, as there is no agreement regarding access to traffic in the Strait of Hormuz.

This means that the agreement does not alter the current level of uncertainty, as the warring parties continue to hurl threats at each other.

Moreover, from behind the scenes of the world’s public monitoring, there is information about covert sabotage actions, where tactical intelligence records the use of unidentified Unmanned Underwater Vehicles (UUVs) that have damaged underwater fibre optic cables and pipelines around Fujairah port.

This is not merely a ship blockade; it is an attempt to sever the logistical communication nerves. Perhaps this explains why maritime insurance companies like Lloyd’s and others have raised war risk premiums to very high levels.

Indonesia has not or has yet to raise fuel prices. However, the situation in the Gulf region still has the potential to escalate unavoidable problems. Before the war began, Indonesia was already facing several issues.

After a state budget deficit of more than Rp240 trillion in the first quarter of 2026, the budget is now under even greater pressure due to having to bear the surge in subsidy costs as a logical consequence of the spike in global oil prices.

Indeed, the government has expressed its determination not to adjust (raise) fuel prices. However, there are always consequences that the state must bear. For example, public questions about the sufficiency of LPG gas in the coming times.

The budget deficit is an indicator of the weakening performance of the national economy. Similarly, the performance of the national business world is marked by the bankruptcy of many companies, including millions of micro, small, and medium enterprises (MSMEs). These facts and trends have led to a bubble in unemployment figures. As a result, the income of millions of families has shrunk, with the excess effect continuing to weaken purchasing power or consumption.

Does the policy of not raising subsidised fuel prices currently affect domestic production costs? It is common knowledge that spikes in oil prices ignite a domino effect in the form of increased production costs across various industrial sectors.

In addition to energy spending becoming more expensive than before, swelling production costs are inevitable due to rises in prices of oil-derived raw materials, such as plastics. When production costs rise amid weak consumption or household spending, production volumes are typically adjusted to be smaller.

When factories or producers adjust to market absorption capacity, their ability to absorb labour also diminishes.

The impacts are already being felt these days. Plastic prices have risen sharply, by more than 50 percent. The price increase is due to supply disruptions of naphtha raw materials for producing plastic pellets. Domestic demand for plastics is high, but Indonesia relies on imports.

The situation is becoming more complicated, not only triggered by the surge in the US dollar exchange rate that makes imports more expensive than before, but also indications of actions by large business players converting wealth from Indonesia’s banking system, which is threatened with sanctions, into crypto assets and foreign property.

Such is the chain of excesses from the current gloomy global dynamics. No one knows when global harmony can be restored. However, this uncertainty should not be accepted as a dead end.

On the contrary, this series of difficulties must be responded to with the courage to conceive and pursue new initiatives to obtain strategies or ways to repair all the damage caused by the aforementioned uncertainty.

Fortunately, Indonesia has the potential to emerge from the current dire situation. While urging the government to wisely address energy availability, particularly fuel and LPG gas, collective attention should also be directed towards the seeds of hope brought by President Prabowo Subianto from his series of working visits to several countries.

The seeds in question are the substantial value of foreign investment commitments to develop their businesses domestically.

As is widely known, upon returning from working visits to Japan and South Korea at the end of March to early April 2026, President Prabowo brought home investment commitments from both countries totalling Rp575 trillion, approximately $35.4 billion.

Commitments from Japanese businesspeople reached Rp401 trillion or $23.6 billion, while those from South Korea amounted to Rp173 trillion through the signing of 10 Memorandums of Understanding (MoUs).

Businesspeople from both countries are interested in developing their ventures in several sectors that are considered highly strategic for the current era and the future. Including the energy transition sector.