The national policy on export proceeds (DHE) from natural resources has been revised for a third time after repeated attempts failed to significantly bolster foreign exchange (forex) reserves or deepen onshore foreign currency liquidity. The latest revision relaxes the mandatory rupiah conversion requirement from 100 percent to 50 percent and requires the placement of DHE in Association of State-Owned Banks (Himbara) members. While this is intended to ease pressure on exporters, it raises questions about whether locking DHE onshore can be effective in the long run without undermining export competitiveness.

Rather than safeguarding justice, Indonesia's legal instruments are increasingly being bent to serve institutional interests. The standoff between the Constitutional Court (MK) and the National Police over the assignment of active officers to civilian posts exposes not merely regulatory inconsistency, but a deeper disregard for constitutional authority.

Indonesia's current account balance returned to a surplus in the third quarter (Q3) of 2025, but the improvement was overshadowed by one of the sharpest capital outflows in recent years. Bank Indonesia (BI) reported that the current account swung into a surplus of US$4 billion, or 1.1 percent of GDP, the first surplus in 10 months. However, this gain was more than offset by a steep financial account deficit of US$8.1 billion. As a result, Indonesia posted an overall balance of payments deficit of US$6.4 billion in Q3.

The administration of Prabowo Subianto is reforming the disbursement of fuel and electricity subsidies to improve state budget efficiency. These subsidies have long been criticized for disproportionately benefiting upper-middle-class households, who consume more energy, rather than the poor and vulnerable groups they are intended to support. As a result, the government now aims to better target subsidy distribution and reduce its long-standing fiscal burden. The urgency to optimize subsidy spending has also grown amid rising expenditures for several major government programs.

Grief has engulfed Sumatra. Flash floods and landslides have devastated the provinces of Aceh, North Sumatra and West Sumatra, leaving behind not only the ruins of homes and infrastructure but also the deepening realities of hunger, displacement and profound uncertainty. Yet the government's decision to slash disaster funding to its lowest level in years is now testing its ability to help the affected rebuild their lives.

After last month's controversial passage of the revised Criminal Law Procedures Code (KUHAP) bill, concerns have emerged regarding a significant legal loophole: wiretaps. Activists say that if left unchecked, law enforcement agencies like the National Police will have leeway to wiretap anyone at any time without formal mechanisms and restrictions once the KUHAP comes into force on Jan. 2.

The flash floods and landslides that ravaged Aceh, North Sumatra and West Sumatra should prompt far deeper scrutiny than they have so far received. While Cyclone Senyar intensified the rainfall, the scale of destruction reflects decades of unchecked ecological degradation that have left communities acutely exposed.