JAKARTA — The open conflict between Iran and Israel continues to raise concerns about how global economic stability is running, including in Indonesia.
In dealing with the conflict in the Middle Eastern country, the government under the leadership of President Prabowo Subianto immediately promoted various economic mitigation efforts to minimize its negative impact on the people of the country.
Policy Analyst at the Directorate General of Economic and Fiscal Strategy, Ministry of Finance, Wahyu Septia W explained that the government had previously observed an increase in uncertainty, in fact this had occurred since early 2025.
“The government has actually observed this increase in uncertainty since the beginning of the year,” he said.
So, even though the Israel-Iran conflict occurred in June, we had previously monitored the increasing uncertainty,” said Septia at the Ngonten Fiskal event in Jakarta.
She emphasized that the government has prepared various fiscal buffers, including through budget efficiency and reallocation so that the negative impact of the conflict in the Middle Eastern country can be suppressed.
The efficiency steps are carried out by diverting the APBN to things that have a direct impact felt by all people in Indonesia.
“That’s why now it’s not a budget cut, but we are combing through bureaucratic inefficiencies, we are diverting it to spending whose impact can be felt more directly by the community,” explained Septia.
Furthermore, Minister of Manpower Yassierli also acknowledged that the conflict between Iran and Israel does have the potential to trigger layoffs, especially in the industrial sector that is oriented towards export activities.
“Of course this will have an impact on industries that export abroad, because of course geopolitical conditions will have an impact on global economic growth,” he said in South Jakarta.
Therefore, his ministry has also prepared various steps mitigation, including one of which is the Job Loss Guarantee (JKP) to protect affected workers.
Meanwhile, Minister of Industry Agus Gumiwang Kartasasmita emphasized the importance of diversifying national energy so that the industry is not shaken by conflict.
“The national industry must start relying on domestic energy sources, including new and renewable energy such as bioenergy, geothermal, and utilizing industrial waste as alternative fuels,” he said.
He also encouraged the downstreaming of domestic agro products and food technology innovation as a strategic step to maintain Indonesia’s food security and sovereignty amidst global dynamics. (*)
[edRW]
