By: Rivka Mayangsari )*
Global geopolitical tensions have again escalated following the outbreak of war between the United States and Iran, which also involves Israel. The escalation of conflict in the strategic Middle East, particularly around the Strait of Hormuz, has raised concerns about the stability of global energy supplies and food distribution chains. Amid this uncertainty, the Indonesian government has reaffirmed its commitment to maintaining public purchasing power and ensuring national economic growth remains on track.
Coordinating Ministry for Economic Affairs Spokesperson Haryo Limanseto emphasized that the government is moving quickly and in a coordinated manner. The Coordinating Ministry for Economic Affairs has closely coordinated with the Ministry of Finance to ensure the state budget is prepared to mitigate the impacts of the conflict, particularly in the energy and food sectors, which are highly sensitive to global volatility. According to Limanseto, the various policies currently being implemented aim to ensure that people’s purchasing power is not disrupted while maintaining the momentum of domestic economic growth.
As a concrete step, the government is expediting the distribution of food aid, consisting of 10 kilograms of rice and 2 liters of cooking oil, to 35.04 million beneficiary families (KPM). This intervention is designed to mitigate potential price pressures on staple foods due to global distribution disruptions. Furthermore, the government is preparing follow-up policies ahead of Eid al-Fitr to ensure price stability and the availability of basic necessities amidst seasonal consumption spikes.
To maintain macroeconomic stability, the government also continues to coordinate with Bank Indonesia. Haryo confirmed that Indonesia’s foreign exchange reserves reached US$154.6 billion as of January 2026, a figure considered relatively safe as an instrument for maintaining rupiah exchange rate stability. The resilience of these foreign exchange reserves provides a crucial buffer against potential external pressures and capital outflows that often accompany global uncertainty.
Regarding national security, National Police Chief General Listyo Sigit Prabowo also highlighted the impact of global conflict on the Indonesian economy. He urged the public to remain vigilant, as geopolitical turmoil is believed to have a ripple effect on national economic stability. However, Listyo emphasized that preparedness must be accompanied by optimism and cooperation from all elements of the nation.
According to him, maintaining a conducive investment climate is one of the keys to sustaining economic growth. Stable security and public order (kamtibmas) are the main foundation for sustainable development. Without security stability, economic activity will be disrupted and investor confidence will weaken. Therefore, synergy between security forces, the government, and the public is crucial in this uncertain global situation.
Listyo also urged all parties to continue supporting the Astacita program and the downstreaming agenda launched by President Prabowo Subianto. Downstreaming is considered a fundamental strategy for strengthening the national economic structure and making it less vulnerable to external fluctuations. By strengthening domestic added value, Indonesia can reduce its dependence on raw material exports and strengthen long-term economic resilience.
Meanwhile, Amin Ak, a member of Commission XI of the Indonesian House of Representatives (DPR RI), warned the government not to underestimate the potential further impacts of the conflict. He stated that the escalation around the Strait of Hormuz could develop into a geoeconomic wave that would impact the national economy through energy price spikes and financial market volatility. Therefore, he urged swift and targeted extraordinary measures.
The first recommended step is budget reallocation. The government is being asked to review projects deemed less strategic and redirect them to supplement direct cash assistance for energy and food subsidies. This policy is considered crucial for maintaining the purchasing power of lower-income groups when price pressures begin to be felt. By strengthening social protection, the direct impact on vulnerable groups can be minimized.
The second step concerns energy diplomacy. The government is encouraged to seek sources of oil supplies from areas unaffected by conflict to reduce dependence on distribution channels at risk of disruption. Diversifying energy supplies is a crucial strategy to ensure price stability and maintain domestic energy availability.
The third step relates to monetary policy. Amin asked Bank Indonesia to maintain the stability of the rupiah against potential capital outflows without aggressively raising interest rates. There are concerns that overly tight interest rates could suppress credit growth, particularly for micro, small, and medium enterprises (MSMEs), the backbone of the national economy.
These various perspectives demonstrate that the government and all stakeholders recognize the enormity of the global challenges they face. However, within these challenges lies an opportunity to strengthen the foundations of the national economy. Fiscal and monetary coordination, strengthening social protection, maintaining security stability, and accelerating economic transformation are key pillars in addressing global turmoil.
Indonesia is not a country that is passive in the face of global dynamics. With strong foreign exchange reserves, solid policy coordination, and the support of all elements of the nation, the national economy is believed to be capable of surviving and even growing amid external pressures. Amid the shadow of conflict, the government has emphasized that stability, resilience, and the welfare of the people remain its top priorities.
*) Economic observer
