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Trading
Indonesia, a developing country rich in natural resources and boasting the 4th largest population in the world, maintains an extensive trade presence. In 2023, the national trade balance reached US$480.7 billion, having grown significantly compared to the pre-pandemic period in 2019, when it stood at US$338.96 billion. Moreover, as of March 2024, the country has officially recorded a trade balance surplus for its 47th consecutive month.
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Trading
Indonesia, a developing country rich in natural resources and boasting the 4th largest population in the world, maintains an extensive trade presence. In 2023, the national trade balance reached US$480.7 billion, having grown significantly compared to the pre-pandemic period in 2019, when it stood at US$338.96 billion. Moreover, as of March 2024, the country has officially recorded a trade balance surplus for its 47th consecutive month.
In terms of exports, Indonesia’s top export commodity has historically been mineral-based fuels, especially coal. However, in the global market, Indonesia is a superpower in the exports of vegetable oils, particularly palm oil, having captured roughly 20 percent of the market with a total export value of US$35.2 billion in 2022. Behind that, Indonesia also leads in nickel exports, with a total export value reaching US$5.8 trillion or 14 percent of global exports.
In 2023, China emerged as Indonesia’s top partner for both exports and imports, with a total annual value of US$62.3 billion and US$62.2 billion, respectively. Meanwhile, the nation’s next top export destination is the US, with a total annual value of US$ 23.2 billion, while the next top import country of origin is Japan, with a total annual value of US$ 16.4 billion.
For trades on the level of individual consumers, the main driver of growth has been the rise in e-commerce throughout the past few years. E-commerce gross market value (GMV) grew by 20 percent from US$48 billion in 2021 to US$58 billion in 2022. This growth persisted to 2023, as e-commerce GMV grew by 7 percent to US$62 billion. E-commerce grew rapidly as it provided a means for Indonesian consumers to maintain access to goods and services during the pandemic period of 2020-2022. However, by the time the pandemic ended, e-commerce had grown ubiquitous and became a staple in the day-to-day lives of the average Indonesian.
Meanwhile, the domestic retail sector in Indonesia is driven by the sale of automotives. The retail of automotives alone in the country reached a gross domestic product (GDP) of US$174.35 billion in 2023, contributing to roughly 13.53 percent of Indonesia’s total GDP of US$1.3 trillion for that year at current market prices. Moreover, the country also achieved a per capita GDP of US$ 4,919.
Strong trade growth followed by increasing access to goods has bolstered local consumer confidence in Indonesia despite the period of uncertainty throughout 2023. According to Bank Indonesia’s monthly consumer confidence survey, Indonesians entered 2024 with high confidence, with the confidence index rising from 123.8 in December 2023 to 125.0 in January 2024. Moreover, this increase is even higher compared to same period the previous year, as a consumer confidence index of 123.0 was recorded for January 2023.
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The country’s long-running food estate ambition is entering a new and larger phase with the conversion of vast forest areas in South Papua into non-forest zones, or areas for other uses (APL). Initially framed as a strategy to achieve rice self-sufficiency, the program has now expanded under President Prabowo Subianto to also pursue energy security, with palm oil positioned as a key commodity to serve both goals.
The food estate initiative was launched in 2020 under President Joko “Jokowi” Widodo, following warnings from the Food and Agriculture Organization that the COVID-19 pandemic could trigger global food shortages. Framed as a matter of national defense, the program was assigned to then-defense minister Prabowo.
At the time, the Defense Ministry proposed Merauke Regency as the project site, citing abundant available land. The Merauke administration said it had at least 2.5 million hectares suitable for development, half of which had previously been allocated to the Merauke Integrated Food and Energy Estate (MIFEE) project under the administration of Susilo Bambang Yudhoyono. The project ultimately failed, largely because wetlands in the area proved unsuitable for rice cultivation.
Political considerations played a role in Jokowi’s decision not to revive the MIFEE, as a successful revival could have bolstered Yudhoyono’s legacy at a time when his Democratic Party sat in opposition. Jokowi opted instead to develop food estates in Central Kalimantan but that effort also faltered, in part because peatland is similarly ill-suited for farming rice.
Yet Merauke never fully disappeared from the policy agenda. On Apr. 19, 2024, after Prabowo had been declared president-elect, Jokowi issued Presidential Decree No. 15/2024 on establishing a sugar and bioethanol self-sufficiency task force. He then appointed his investment minister Bahlil Lahadalia to lead the task force, which was assigned to implement its program in Merauke, the original location proposed by the Defense Ministry.
Prabowo immediately followed suit, moving to redirect the food estate program back to Merauke. To get an early start, he brought in Jhonlin Group owner Andi “Isam” Syamsuddin, facilitated by Isam’s cousin Amran Sulaiman, who was agriculture minister at the time. Jhonlin began clearing land and building infrastructure for rice paddies, deploying 2,000 excavators imported from China worth Rp 4 trillion (US$236.94 million). When Prabowo took office in October 2024, Amran was retained as agriculture minister.
The sugar and bioethanol self-sufficiency project soon ran into institutional hurdles. A budget deadlock and the absence of a regional spatial plan (RTRW) for South Papua, newly established in 2022, prompted the formation of a high-level coordination team led by Coordinating Food Minister Zulkifli Hasan via Presidential Decree No. 19/2025, issued on Aug. 5. The team designated the food estate as a national strategic project (PSN) and declared Merauke, Mappi, Asmat and Boven Digoel as national food, energy and water self-sufficiency areas under Coordinating Economy Minister Regulation No. 16/2025.
To support the food estate PSN, 489,940 ha of forests in Merauke, Boven Digoel and Mappi were reassigned non-forest area (APL) status on Sept. 18 through Forestry Minister Regulation No. 591/2025. Oil palm development plans include 143,000 ha of these newly converted forests and 326,000 ha of illegal plantations seized by the forest area enforcement task force (Satgas PKH).
The National Procurement Agency (LKPP) issued Regulation No. 3/2025 on Sept. 22, to accelerate state funds disbursement by eliminating electronic bidding and feasibility study requirements for vendors of self-sufficiency areas.
This regulatory change enabled Jhonlin to bill the 2025 state budget for work done in 2024 to a tune of Rp 7 trillion, Rp 1 trillion of which has been paid.
Further cementing the program’s footprint, the Agrarian and Spatial Planning Ministry issued decrees on Jan. 11, 2026, granting right to build (HGB) and right to cultivate (HGU) for 328,000 ha of land redesignated as APL. This includes customary forests for which indigenous Papuan communities have long sought formal recognition.
