Sector

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.

Latest News

June 25, 2026

The recently passed Police Law revision is difficult to view in isolation. Coming just over a year after the controversial revision of the Indonesian Military (TNI) Law, it forms part of a broader pattern in which Indonesia's security institutions are steadily gaining greater authority, flexibility and access to civilian spheres.

Since the House of Representatives designated the revision of the 2002 Police Law as a legislative initiative on May 20, the deliberation process moved at an unusually rapid pace. Less than three weeks later, lawmakers endorsed it in a plenary session on June 9. With parliamentary approval secured, the revised law is expected to be promulgated and published in the State Gazette in early July.

The amendments revise 10 articles and introduce seven new provisions. One of the most contentious issues concerns the placement of active police officers in civilian institutions. Observers have argued that the law contradicts the spirit of Constitutional Court jurisprudence requiring police officers to resign from active service when occupying positions outside the police institution.

Under the newly enacted law, however, there is no explicit provision requiring active officers assigned to external institutions to resign or retire from the police force. Instead, the law permits such assignments as long as they are deemed related to police functions.

That omission matters. National Police Regulation No. 10/2025 already identifies 17 ministries and state institutions that can be occupied by active police personnel. Yet rather than specifying such institutions in the law itself, lawmakers chose to leave the details to future government regulations.

This approach creates significant ambiguity. Without explicit limitations contained within the body of the law itself, questions inevitably emerge regarding the boundaries of permissible assignments and the mechanisms available to prevent institutional overreach.

Public resistance has also begun to emerge through both street mobilization and legal channels. The wave of demonstrations that spread across several cities since June 12, initially driven by economic grievances, increasingly incorporated demands related to democratic governance and security-sector reform.

For instance, student demonstrations in Semarang and public protests in Surabaya included calls on June 15 to return the TNI and the National Police to their core institutional functions and opposition to the revised Police Law. At the same time, a group of advocates reportedly filed a formal judicial review petition before the Constitutional Court on June 12, challenging both the legislative process and substantive provisions of the law.

This strengthening of the National Police cannot be separated from its relationship with Indonesia's other major security institution, the TNI. Rivalries between the two organizations have long been part of Indonesia's political and security landscape, historically revolving around access to political influence, bureaucratic positions, state resources and proximity to executive power. The simultaneous expansion of opportunities for both institutions to occupy civilian roles therefore introduces a new dimension to this longstanding dynamic.

Interestingly, under President Prabowo Subianto - whose political identity is closely associated with the military - the strengthening of the National Police has continued to receive substantial political support. This is particularly evident in the final stages of the legislative process.

A last-minute proposal submitted by Deputy Law Minister Edward Omar Sharif Hiariej introduced provisions allowing four-star police generals to remain in office beyond the previous retirement limit of 61 years. Under the revised law, they may continue serving for as long as the president deems their services necessary. Such provisions not only extend institutional continuity but also potentially enhance executive influence over senior police leadership.

The final aspect worth highlighting concerns fiscal power. Institutional influence is often reflected not only in legal authority but also in access to public resources. During a working meeting with Commission III of the House on June 17, the National Police proposed an additional Rp 66.1 trillion (US$3.71 billion) allocation for the 2027 fiscal year, arguing that the indicative ceiling of approximately Rp 118 trillion remained insufficient to meet organizational needs.

When viewed alongside expanded authority, broader opportunities for civilian placement, extended leadership tenure, and stronger political backing the budget proposal reinforces the broader pattern of institutional consolidation currently unfolding within Indonesia's security sector.

Taken together, these developments suggest that the current administration's approach is not oriented toward strengthening a single security institution. Rather, it reflects a broader strategy of consolidating the state's security apparatus by expanding the influence, flexibility and institutional reach of both the TNI and the National Police.

The revised Police Law thus represents not merely a technical legal amendment but part of a wider reconfiguration of state power and security governance in post-reform Indonesia.

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