This Week in Indonesian Politics (25-31 May 2026)

The week of 25–31 May 2026 was bookended by solemnity and ceremony: the nation mourned the passing of a distinguished soldier-statesman, marked the eve of Pancasila Day with reflection on national identity, and grappled with a raft of consequential economic policy shifts, all while the international order continued its turbulent unravelling in ways that Indonesia can scarcely afford to ignore.

A Nation Bids Farewell to Ryamizard Ryacudu

The most emotionally charged story of the week was the death of retired General Ryamizard Ryacudu, former Army Chief of Staff and Defence Minister under President Joko Widodo, who passed away at RSPAD Gatot Soebroto Hospital in Jakarta on the afternoon of Sunday 31 May at the age of 76. The outpouring of tributes was immediate and extensive, drawing together political figures across generational and partisan lines. Former President Megawati Soekarnoputri, who had appointed Ryamizard to senior military command, described him as a “true statesman-soldier” and recalled with particular emotion his swift deployment of military engineers to construct Bailey bridges in the aftermath of the 2004 Aceh tsunami, restoring access to devastated communities within days. Former Vice President Jusuf Kalla praised his contributions to national security, while Presidential Staff Chief Dudung Abdurachman, who served under him, called him a “professional warrior” and spoke of profound personal loss.

What distinguished the tributes was a recurring emphasis on Ryamizard’s humanistic approach to soldiering. During operations in Aceh, he famously instructed his troops that the local population was not the enemy – a philosophy that, according to multiple colleagues, helped rebuild trust between the military and civilians in one of Indonesia’s most conflict-scarred provinces. Former TNI Commander Gatot Nurmantyo recalled that Ryamizard turned “impossible” projects into reality, including the establishment of the Raider units and the reconstruction of Aceh’s road network. President Prabowo Subianto, who shared military academy memories with Ryamizard – including being made to climb power poles together as punishment for forgetting the Sapta Marga oath – attended the state military funeral at Kalibata National Heroes’ Cemetery on 1 June. His passing closes a chapter in the generation of officers who shaped post-New Order military reform.

Prabowo’s Paris Diplomacy and the Italy Confusion

While the nation mourned, President Prabowo had only just returned from a four-day state visit to France, where he held talks with President Emmanuel Macron and secured four new commercial agreements spanning energy security, trade, and defence cooperation. The visit, his third to Paris this year, produced concrete outcomes: confirmation of Rafale fighter jet deliveries, a joint military exercise under the Pegasus Mission scheduled for September 2026, and progress on the Indonesia-EU Comprehensive Economic Partnership Agreement. The deepening of the Indonesia-France Comprehensive Strategic Partnership reflects Prabowo’s clear intent to position France as Indonesia’s primary European interlocutor – a relationship rooted in shared defence interests, technology transfer ambitions, and what multiple analysts described as genuine personal rapport between the two leaders.

The visit was, however, briefly overshadowed by an information muddle. Social media reports and a statement from Gerindra spokesperson Sugiat Santoso suggested the trip would also include stops in Italy, Austria, and Hungary. The Government Communication Agency’s head Muhammad Qodari and the Presidential Palace both denied any additional official visits, confirming the itinerary was confined to France. The episode, minor in itself, nonetheless illustrated the persistent gaps between the administration’s communication machinery and its party apparatus – a structural tension that has recurred throughout Prabowo’s first year in office.

The DHE SDA Policy: Tightening the Foreign Exchange Grip

Perhaps the most consequential policy development of the week came not from the palace but from the Finance Ministry and Danantara. Effective 1 June 2026, Indonesia’s new DHE SDA regulations require exporters of natural resources to repatriate foreign exchange earnings domestically – 100% for non-oil and gas exporters, held in domestic banks for at least 12 months, and 30% for oil and gas producers for three months. The policy is accompanied by a 0% income tax incentive for compliant placements, compared to the standard 20% rate.

Simultaneously, the government launched PT Danantara Sumberdaya Indonesia (DSI) as the mandatory reporting and oversight channel for exports of coal, crude palm oil, and ferroalloy, with the CEISA 4.0 customs platform used for compliance. Coordinating Minister Airlangga Hartarto framed the initiative as a direct response to years of under-invoicing, transfer pricing, and capital flight – the Finance Minister notably named all 10 of Indonesia’s largest CPO exporters in a random sample as having used Singapore shell companies to undervalue shipments.

The policy has not been universally welcomed. The Indonesian Coal Mining Association (APBI) warned that routing exports through a single state channel could fundamentally alter the coal trade’s structure, disrupting the quality-consistency and legal liability frameworks that international buyers rely on. Palm oil smallholder groups reported a sharp drop in fresh fruit bunch prices following the announcement, with market panic driving private mills to purchase below government-set reference rates. The Agriculture Ministry threatened licence revocations for non-compliant mills. Danantara announced that DSI’s management board would be revealed the following week, with a transition period running until December 2026.

Democratic Tensions and Civil Society’s Warning

A separate but significant thread ran through the week: a mounting chorus of concern about the trajectory of Indonesian democracy under the Prabowo-Gibran administration. At Gadjah Mada University, hundreds of civil society organisations, academics, and activists convened a self-styled “Republic Conference” to address what they described as military encroachment into civilian spheres, institutional weakening, economic inequality, and democratic regression. Speakers including former Energy Minister Sudirman Said warned that state power had been reduced to an “electoral machine” serving a handful of families. The conference produced three key demands, including the drafting of a White Paper on pro-people economic policy.

The Lemhanas Governor’s endorsement of the Ministry of Defence’s plan to establish Territorial Development Battalions (BTP) across Java’s districts and cities drew particular scrutiny from academics, who argued the initiative blurs the boundary between military and civilian governance that post-1998 reforms were designed to enforce. SMRC founder Saiful Mujani went further, warning that he would call for a boycott of the 2029 elections if democratic standards continued to deteriorate. Meanwhile, a Komnas HAM dispute over the revision of the Human Rights Law – with the commission claiming it had been excluded from the drafting process – added another layer to concerns about institutional independence.

The KPK, Customs Corruption, and Legal Accountability

The anti-corruption front produced two notable developments. The Corruption Eradication Commission was under pressure to explain why Customs Director-General Djaka Budhi Utama had not been questioned despite his name appearing in court documents related to the Blueray Cargo bribery case, with money laundering expert Yenti Garnasih calling the omission “strange” and urging the Finance Minister to suspend the official. Separately, the KPK unveiled allegations against former Pekalongan Regent Fadia Arafiq, who stands accused of mobilising outsourced workers to support her regional election campaign under threat of dismissal – a scheme labelled “political outsourcing” – and of receiving Rp46 billion in illicit funds channelled through family members.

The Hanania Travel Fraud and Consumer Protection

Closer to everyday life, the Hanania Travel umrah fraud case continued to expand in scale and political salience. The company’s director, Ahmad Syah Farhan, was formally detained by Jakarta Metropolitan Police on charges of fraud, embezzlement, and money laundering, with reported losses of Rp12.14 billion across at least 128 documented victims. DPR members called for mandatory audits of travel agencies and urged the Ministry of Hajj and Umrah to publish an official list of accredited operators. A dedicated complaint desk was opened at Polda Metro Jaya for additional victims. The case has reignited longstanding calls for tighter oversight of the pilgrimage travel industry, an issue that recurs with depressing regularity in Indonesia’s consumer protection landscape.

Looking Ahead

The week ahead will open with Pancasila Day ceremonies on 1 June, a moment of symbolic significance as President Prabowo serves as inspecting officer and former President Megawati is expected to attend – a rare appearance that will be read, in the current political climate, as something rather more than a simple act of patriotism. The DSI export regime takes effect in earnest, and markets will be watching closely to see whether the transition produces the revenue gains the government promises or the market disruption that industry associations fear. The Sumbawa Island Alliance’s planned provincial-status protests on 2 June, involving coordinated demonstrations across five regencies, will test both the government’s tolerance for regional autonomy demands and its capacity to manage dissent through dialogue rather than suppression. And the KPK will face continued public pressure to summon the Customs Director-General – a test, in microcosm, of whether Indonesia’s anti-corruption institutions retain the independence to pursue powerful figures or merely the peripheral ones.