The Price of Safeguarding Sovereignty

Sukarno’s Trisakti concept reminds us that sovereignty does not end with political recognition. A nation may possess a flag, territory, government, and international recognition, yet remain fragile if its economic foundation is controlled by external forces. Political sovereignty without economic independence easily becomes a dependent form of freedom.

Indonesia’s history offers harsh lessons. The recognition of sovereignty through the Hague Round Table Conference on 2 November 1949 did not come without cost. The Republic had to accept a federal state structure and shoulder the Dutch East Indies’ debt burden. A bitter choice, yet one leaders deemed necessary to secure international recognition of Indonesia’s political independence. Some issues could be resolved later; the priority was ensuring Indonesia’s sovereignty was acknowledged and preserved.

This historical lesson is vital, as each generation faces its own sovereignty test. Where political recognition was once the primary challenge, today’s battleground is economic: can the state fully control its strategic natural resources, or merely serve as a nominal owner stripped of added value?

This fundamental question resurfaced when President Prabowo Subianto announced the restructuring of natural resource commodity exports on 20 May 2026. The policy is being implemented through the establishment of PT Danantara Sumber Daya Indonesia (DSI), a new state-owned enterprise under the Danantara Investment Management Agency. This move aims to expose practices long felt and known but rarely discussed openly—such as mismatched export volume reporting, underreported export values below market prices, and cross-border transaction structures that dissipate profit margins without returning benefits to the nation.

Technically, these practices harming state revenue are termed under-counting, under-invoicing, and transfer pricing. Constitutionally, the issue strikes at the heart of the state’s ability to uphold Article 33 of the 1945 Constitution.

Article 33(3) states that land, water, and natural resources within them are controlled by the state and used for the greatest prosperity of the people. This is more than an economic clause; it is a constitutional directive that Indonesia’s natural wealth must serve public interest, not just private gain.

The pre-amendment explanation of Article 33 emphasised that ‘the welfare of the community must be prioritised over individual prosperity.’ This is the essence of Article 33. Natural resources must not be treated merely as ordinary commodities; they are part of the constitutional promise that Indonesia’s wealth must benefit its people.

The Constitutional Court has provided crucial interpretations. In several rulings, it stressed that ‘controlled by the state’ must not be read as mere formal ownership. State control encompasses policymaking, regulation, management, and oversight. In electricity-related cases, the Court affirmed that Article 33 does not exclude private involvement as long as the state maintains control over vital production sectors and public welfare. In the BP Migas case, the Court warned that institutional designs distancing the state from effective control of natural resources may violate Article 33.

This means the state must do more than issue permits, collect taxes, or receive post-transaction reports. The state must ensure natural resource value is accurately recorded, monitored, and returned as public benefit.

This is the core issue. Owning natural resources does not automatically mean controlling their value. A nation may possess mines, plantations, and strategic commodities yet lose control over pricing, volumes, buyers, foreign exchange, and margins within trade chains. The state may be present at the start through permits and at the end through levies, but absent from the critical point: how value is truly created, recorded, and returned to the public.

Civilisational history shows sovereignty does not always fall to military attacks; it erodes when a state loses control over revenue sources and strategic decisions. Ibn Khaldun’s Muqaddimah dissects how power declines when fiscal stability can no longer sustain the state. Similarly, Paul Kennedy’s The Rise and Fall of the Great Powers demonstrates that great powers endure only through a balance between economic foundations and strategic capacity. Sovereignty, ultimately, is not preserved through symbols and ceremonies but through the governance of economic foundations.

Thus, when the state seeks to regulate strategic commodity exports, resistance is inevitable. Those comfortable with old governance structures rarely accept changes easily. Resistance may manifest as policy criticism, investor concerns, market volatility threats, or narratives that the state is taking excessive risks.