On 2 October, 26 political figures took an oath in the State Palace to give the president unvarnished counsel as members of the Presidential Advisory Board (‘Wantimpres’). The press predictably focused on spectacles, like political critic Rocky Gerung — famous for his often controversial commentaries on the Joko “Jokowi” Widodo administration — now stepping into the corridors of power he once ridiculed. Sure, Rocky’s appointment makes a striking headline, but the media circus surrounding a single maverick obscured a far more consequential story unfolding in the room:

Why does President Prabowo Subianto need 26 more advisors to tell him how to govern?

Law No. 19/2006 established the Presidential Advisory Board as a deliberately lean body of nine distinguished figures. But a 2024 amendment (Law No. 64/2024) scrapped that limit, and a 2026 Presidential Decree ballooned the structure into a clunky apparatus comprising a chair, a deputy chair, a secretary, and twenty-three members. Even if one interprets this expansion as a well-intentioned attempt to satisfy the constitutional mandate that the president be advised, the advisory does not exist in a vacuum.

President Prabowo Subianto already appointed ten Special Advisors (‘penasihat khusus’) for politics, economy, national security, defense, energy, healthcare, hajj affairs, communications, civic technology, and labor affairs. And then there’s the National Economic Council (‘DEN’) — an eight-member economic advisory council chaired by Luhut Binsar Pandjaitan, who sits on both bodies. If we remove the overlaps and count each individual once, we get 43 prominent figures with formal, state-funded appointments explicitly tasked with advising one person.

Prabowo’s advisory crowd works alongside the largest cabinet in the country’s history: an executive branch of 49 cabinet ministers and more than 50 deputy ministers. Add the Chief of Staff, the Cabinet Secretary, the State Secretary, and dozens of government bodies to this tally, and you get 166 people in the president’s cabinet.

It takes a leap of imagination to believe a specific national policy decision genuinely improves after running through a gauntlet of over 100 ministers, deputies, and advisors. It is even harder to picture the logistical reality of a working meeting where 43 advisors are given the floor to debate complex state affairs.

Then there’s the burden on the public treasury. Presidential Regulation No. 15/2026 fixed each advisory board member’s monthly salary at Rp 76.5 million, paired with ministerial-level facilities such as official vehicles, healthcare, and housing allowances. So it’s roughly Rp 918 million per year per advisor before taxes.

For the Board alone, the basic compensation package approaches Rp 24 billion annually, excluding the substantial operational costs of dedicated secretariats, travel budgets, security details, and office facilities. Under the 2007 regulation, an advisory board member received a monthly stipend of around Rp 17.5 million.

An additional dozens of billion per year for just the Presidential Advisory Board would already be difficult to justify under the best economic circumstances. But this becomes indefensible against the broader policy landscape.

The administration approved the raise after beginning its term with a sweeping austerity decree that ordered cuts to public spending totaling hundreds of trillions of rupiah. Civil servants were instructed to cut down operational expenses, cancel seminars, and conserve office stationery. The government constrained fiscal transfers to local governments and ordered state universities, regional hospitals, and public infrastructure funds to absorb significant cuts. The public was asked to sacrifice for fiscal discipline. Meanwhile, the palace quadrupled the cost of its counsel.

Inherently, advisory councils are not problematic. A president who actively seeks diverse expert perspectives outside his immediate political party is desirable. But when his advisory circle reaches this size, the public has reasonable grounds to ask whether these appointments are meant to produce sound policy or serve as a comfortable landing pad for retired political elites. A quick review of the appointee list — like a former coordinating minister and retired police and military generals — might suggest these positions often serve as political consolations rather than functional think tanks.

If these 43 advisors are to justify their drain on public resources, their work must be subjected to public scrutiny. Taxpayers have a right to know the basic operational metrics of these councils. How frequently do the advisors convene as a collective body? Do these advisors produce concrete, written recommendations, and if so, are those documents accessible to lawmakers in the House of Representatives, journalists, and the public? What measurable policy outputs have they produced during their tenure?

These are not trivial; they are central to executive governance. Major national initiatives under Prabowo’s administration have frequently arrived as abrupt public pronouncements rather than visible output of structured policy deliberation.

We don’t dispute the President’s right to seek counsel. But taxpayer-funded advice should leave a public trail. The Presidential Advisory Board, the Special Advisors, and the National Economic Council should publish regular reports on their meeting agendas, the policy questions referred to them, and executive summaries of the advice they delivered. Strategic intelligence and sensitive national security discussions can remain confidential, but the daily output of state-funded advisory bodies should never be treated as a secret.

The public deserves to know what counsel their President receives and exactly what they pay for.

Want to share your views on public policy reforms or other political issues?

Write to us: connect@thinkpolicy.id

In September, Jakarta Governor Pramono Anung met with New York City (NYC) Mayor Zohran Mamdani and exchanged remarks at the U20 Mayor’s Summit. Among the things they discussed were municipal bonds — debt securities issued by governmental entities to finance infrastructure projects — and how NYC historically used them to build the Big Apple into what it is today (the best city in the world, according to a new Oxford economics study).

Municipal bonds had already been on Pramono’s radar for some time. In a July meeting, he said Jakarta plans to issue Rp 3.5 trillion in 7-year bonds starting in June 2027. Since then, the planned amount has risen to Rp 5.2 trillion.

Decentralization optimists see the policy as a step toward real fiscal autonomy in Indonesia, with other localities watching closely to see how it plays out.

Before Purbaya Yudhi Sadewa was removed from the Finance Minister post, he questioned why Jakarta wanted to issue loans, since the city administration is by far the richest province in the country.

Pramono responded that the provincial government must find new ways to source income amid repeated budget cuts to central government transfers. “After all, the Jakarta government knows its own needs. Purbaya said Jakarta has a lot of money. But we are also being told to build a lot, and building takes money,” explained the governor.

Pramono has a point. Since the new millennium, a variety of new laws have reshaped the relationship between the central and regional governments after three decades of authoritarian rule under President Suharto. Among them was greater local fiscal autonomy.

Read our volume about decentralization and local fiscal autonomy:

22 years ago, Law No. 33/2004 on Financial Balance Between the Central Government and Regional Governments (HKPD) gave local governments a clear legal route to borrow from the public. Article 57 states that regions “may issue regional bonds in Rupiah on the domestic capital market,” and that the proceeds must go to “public sector investments that generate revenue and benefit the community.”

Yet, despite over two decades of legal breakthroughs and amendments, no regional government has ever dared to issue its own loans, or at least until Jakarta does so next year.

What does this really mean for Jakarta and the country’s other local governments? In this edition of The Reformist, we’ll cover why Jakarta is opting to borrow, lessons learned from NYC, and the paradoxical reality that this income source may be available only to a select few localities.

Why Jakarta wants to issue bonds

When you look at Jakarta’s total annual budget, especially compared with the other 37 provinces, Purbaya may have been right. Why must Jakarta, a local government with a regional budget (APBD) of Rp 81.32 trillion, take on loans when its budget is two and a half times larger than West Java’s, the second-largest economic budget in the country?

Pramono has cited at least two reasons: (1) narrowing fiscal space from budget cuts, and (2) public transport financing.

This year, the central government slashed Rp 14.5 trillion of annual cash transfers to Jakarta, depleting the province’s budget from Rp 95.3 trillion to Rp 81.32 trillion overnight. A couple of weeks back, Jakarta’s budget agency further decreased the budget to Rp 79.6 trillion after final accounting measures.

These austerity measures follow a pattern set by the current administration since President Prabowo Subianto first came to power. In 2025, President Prabowo issued his first presidential decree, slashing central government transfers by 5.5 percent from Rp 919 trillion to 849 trillion. This year, the central government has since cut the transfers again by Rp 716 trillion.

Pramono and Jakarta saw this as the final straw, prompting the idea of issuing municipal bonds to exercise fiscal independence.

The second, more forward-looking reason is financing public transit. This raises questions, since public transportation is almost always a loss-making business venture. It barely makes any profit, is hard to establish, and is difficult to maintain. How would the province then pay back the loan?

Jakarta’s bus network, TransJakarta, for example, depends heavily on the provincial government to subsidize its operations. This year, TransJakarta received Rp 3.75 trillion to cover the difference between its subsidized user fare and its actual price.

Since 2005, TransJakarta has increased its fares only once, from Rp 2,000 to Rp 3,500, despite two decades of inflation. To put the numbers in perspective, Jakarta’s minimum wage has risen by over 600 percent since 2005, from Rp 819,000 to Rp 5,73 million. The actual cost of TransJakarta ridership is estimated at around Rp 13,200 per rider, meaning the Rp 9,700 difference is fully subsidized by TransJakarta and, by proxy, the provincial government.

Read our volume on TransJakarta:

Only recently, in late September, did a governor finally dare to rip the band-aid and announce that fares will be readjusted at the beginning of next year.

And this should be okay! Because despite public transport being a costly public good, it is highly beneficial for a city and its people. The more people use public transportation, the more agglomeration occurs, spurring up economic activity in urban areas. One Universitas Indonesia study estimates that every Rp 1 trillion endowed for TransJakarta generates Rp 3.2 trillion in national economic output. Ridership has also grown year after year.

Last year alone, public transportation ridership across all modes eclipsed 461 million passengers, even though over 70 percent of Jakarta citizens still primarily use private vehicles.

This means there is still plenty of potential. Yet operational costs are the smaller problem. Suppose fares and a healthy subsidy cover buses, drivers, and fuel. They still would not pay for a new LRT line or a new bus fleet. That is capital spending: huge sums up front for assets that serve riders for 30 to 50 years. No fare, however well set, can raise that money in the year it is needed.

For example, the existing 15.7-kilometer MRT line, which connects Central and South Jakarta, cost the provincial government Rp 16 trillion. It received initial capital from the Japan International Cooperation Agency (JICA) through a 40-year loan, with a burden-sharing scheme that involved a 49 percent grant from the State Budget (APBN) while the rest of the loan is paid off through Jakarta’s ABPD.

A generous gesture from the central government, but one that is dependent on its benevolence. A similar price tag appears in the recently inaugurated 12.2-kilometer Manggarai–Kelapa Gading LRT line, which needs around Rp 12.1 trillion in capital funding.

This is the problem municipal bonds help to solve. A bond lets a city borrow today and repay over decades, spreading the cost across the people who will actually use the asset.

Governor Pramono has revealed that Rp 2.7 trillion from the Jakarta bonds would be used to extend the Manggarai–Kelapa Gading LRT route to Dukuh Atas, further connecting the city. The remaining Rp 2.9 trillion would finance the Sumber Waras Hospital project, which has been delayed for over 14 years.

The public transit financing logic applies to many other capital-heavy infrastructure projects with minimal profit margins. Public goods like hospitals (as seen through Pramono’s pledge), schools, and social housing require upfront capital to kickstart construction; municipal bonds can help provide it.

How NYC used bonds to build a connected city

In the United States, over 50,000 local governments and institutions participate in the bond market. The US is also the country where municipal bonds finance almost two-thirds of cities’ infrastructure and urban development. Among their many uses, municipal bonds often fund new public transportation infrastructure.

Perhaps the most famous use case was the creation of the New York City subway system. In 1894, the New York State Legislature passed the Rapid Transit Act, allowing the city to borrow money and build a subway it would own. The first contract, signed in 1900, priced the project at US$ 35 million or roughly Rp 25 trillion in today’s money. An independent contractor then used this capital to build and operate the subway system under a franchise for 50 years.

By 1908, the subway and other public works had pushed New York close to its legal borrowing limit. Rather than stop building, New Yorkers voted for more. In 1909, the legislature and New York citizens approved a constitutional amendment by referendum. The amendment meant that debt used to fund self-paying projects, like the subway, no longer counted toward the limit, freeing up about US$ 120 million for new lines.

But, as you can see today, everything worked out in the end. When the subway first opened, the New York Subway had a single 14.6-kilometer line — shorter than Jakarta’s MRT today — and carried 150,000 passengers on opening day. Today, the network spans 399 kilometers across 28 train services and 472 stations, carrying nearly 1.3 billion trips a year and reshaping the city.

To Mamdani, Pramono explained Jakarta’s plan to issue municipal bonds to finance the capital city’s public transportation projects, prompting the NYC Mayor to commend the initiative and note that New York has historically used municipal bonds to fund similar projects, including the New York Subway.

Jakarta has clearly taken inspiration from New York, given Pramono’s candor to Mamdani. If Jakarta aims to become a city like the world’s number one, it must build its public infrastructure, with municipal bonds as a driving force.

A systemic barrier for Indonesia’s (other) local governments

Among the other responses, Mamdani told Pramono that New York would be more than happy to offer technical assistance to help Jakarta kickstart its loans. But despite optimism from both sides, if the New York team dug further into the details, it would quickly realize that the Indonesian system makes regional borrowing even harder than it looks.

For one, the US federal system does not require localities to seek federal approval to issue municipal bonds. By contrast, Indonesian localities must seek approval from both the Finance and Home Affairs Ministry to issue regional bonds. This is a hurdle Jakarta is currently facing.

In terms of taxation, the US federal government allows local states and cities to apply a variety of taxes as they see fit. NYC, for example, collects its own personal and corporate income, sales, and property taxes — to name a few. In fiscal 2025, the city documented over US$ 111.6 billion in total revenue, with 68.6 percent coming from city taxes.

On paper, Jakarta looks similar. About 66 percent of its 2025 revenue came from its own sources. But other provinces don’t share that luxury. For the median Indonesian province, that number drops to 41.2 percent, according to our calculation based on Finance Ministry data. Another major difference is that New York City gets to choose its own taxes, including a city income tax.

Jakarta’s taxes, like those of every other Indonesian locality, are predetermined under Law No. 1/2022 on Financial Relations between the Central Government and Regional Governments (HKPD) — the most recent amendment to the original 2004 Law.

Under this Law, local governments (both provincial and municipal) are entitled to only a few types of taxes, most of which are land- and asset-driven. Large-scale revenue sources like the Value Added Tax (VAT) are fully controlled, while personal and corporate income tax disproportionately favors the central government. See the graph below for the breakdown.

This has left local administrations reliant on annual cash transfers from the central government. Essential infrastructure projects, public transit, school renovations, and teachers’ salaries are only financially feasible if the central government’s budget allows.

As we’ve cited before in a previous volume:

This makes borrowing risky. Repaying loans from an unstable revenue source becomes a gamble, especially when the central government has shown it is willing to cut transfers without deliberation to prioritize its own national agenda.

Worse, the central government returns less than the Law’s tax-arrangement formula. Taxes meant to be redistributed to localities must first be collected by the central government through a revenue-sharing fund (‘DBH’). In 2025, the country collected over Rp 593.9 trillion in non-corporate income tax, covering all income tax except what companies pay on their profits.

At the 20 percent regional share, around Rp 118.78 trillion should have gone back to regional governments. But this wasn’t the case. Under Presidential Regulation No. 118/2025, the personal income tax DBH was set at just Rp 15.2 trillion, or 2.6 percent of the entire DBH pot for the 2026 fiscal year. According to Regional Autonomy Watch (KPPOD) Executive Director Herman Suparman, this goes against the HKPD Law.

For Jakarta, its income tax DBH was slashed by 66.3 percent, from about Rp 21 trillion to Rp 7 trillion, despite being the country’s largest economic contributor.

But while Jakarta has chosen to explore the municipal bond route to ease fiscal pressure, the provincial government can also source 66 percent of its income independently. The Jakarta government has also planned ahead, currently preparing a rainy-day fund to cover future debt repayments.

If the rest of the country follows suit, it will need to plan carefully and tread lightly to avoid borrowing beyond its means.

Jakarta should be safe to proceed with its plan

While loans offer fast and easy capital, they must be managed intentionally so they do not bankrupt a city. This issue matters especially in the Indonesian context, where tax arrangements heavily favor the central government.

Thankfully, the HKPD Law’s implementing regulation (Finance Minister Regulation No. 87/2024) sets a ceiling on how much local governments can issue in municipal bonds. Regional debt of all kinds, existing plus new, cannot exceed 75 percent of the previous year’s revenue that the region is free to spend. This means net income excludes money such as earmarked transfers from the central government, a portion of vehicle and cigarette taxes, hospital revenue, and more.

Municipal bonds also have a minimum Debt Service Coverage Ratio (DSCR) of 2.5. In plain terms, this means a region’s annual income must be 2.5 times its annual debt payments to avoid bankruptcy risk.

The proposed Rp 5.2 trillion Jakarta bonds show how far the province is from the limit. Compared with the province’s Rp 79.6 trillion budget, the total loan would make up only about 6 percent of the city’s total budget.

Add to that no other local government has ever issued its own loans, and any limits provision will have no significance for now. Perhaps in a few years, The Reformist can return to this topic with a richer discussion of regional debt management.

Is borrowing always bad?

It has been 22 years since the 2004 Law laid the foundation for local governments to source their income independently through new means. This isn’t because they haven’t tried. Before Pramono’s Jakarta bonds plan, then-West Java Governor Ridwan Kamil floated the idea of municipal bonds in both 2020 and 2023, but to no avail. In 2024, West Sumatra similarly tried to issue loans, and things never went beyond the planning stage.

Jakarta has also tried to issue loans before: in 2011, then-Governor Fauzi Bowo planned to issue Rp 1.7 trillion in municipal bonds, but his successor, Joko “Jokowi” Widodo, scrapped the idea. In what is now a viral clip of the former governor turned president, he asked, “Why use bonds? What are bonds? They’re debt. Why are you so fond of borrowing when we have plenty of money ourselves?

But as seen in the US and NYC, borrowing doesn’t automatically equate to bad governance. In fact, it is quite the opposite, especially when done correctly and used for infrastructure the masses use and enjoy.

Are you pro or against municipal bonds? Leave your thoughts in the comments!

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On 22 September 2026, Singapore-based BDx Data Centers announced the construction of AI Campus 2, better known as CGK4. It is a 640-megawatt artificial intelligence campus in Jatiluhur, Purwakarta, about five kilometers from the Jatiluhur Dam.

Two months earlier, on 28 July, West Java Governor Dedi Mulyadi and Purwakarta Regent Saepul Bahri Binzein laid the first stone, calling the site safe from natural disasters and a step towards Indonesia’s digital sovereignty. But it is worth scrutinizing what the provincial revenue agency said about why the CGK4 is being built near Jatiluhur: the area has enough electricity and clean water.

Of all the justifications, that last one deserves a second look. BDx said the project will work with the state utility company, PLN, and the local water provider, PDAM, and promises that supply won’t disturb household needs. But the water that makes Jatiluhur attractive to a data center is the same water that irrigates nearly a quarter of a million hectares of paddy fields, fills most of Jakarta’s taps, and keeps alive the villages rebuilt around a reservoir that once drowned their homes.

As the story develops, Governor Dedi recently halted this project because of its missing environmental impact assessment (AMDAL) and building permit (PBG), and demanded proof that its water use would not cut into supplies for farmers and residents who depend on Jatiluhur.

But building a data center next to a critical public facility needs more than an environmental impact assessment because it carries real social risk.

CGK4 is marketed as clean, hydro-adjacent, and job-creating. But without enforceable water priority, public disclosure, and genuine benefit-sharing, it risks becoming an unjust transition, with a global commodity like AI compute placed on top of a local commons just as El Niño intensifies.

Civilizations by the river and the social cost of the Jatiluhur reservoir

Mesopotamia flourished between the Tigris and the Euphrates, Egypt along the Nile, Harappa along the Indus. West Java is no different. If we trace the Citarum River far enough back, it ties to Tarumanagara, its namesake kingdom. From its earliest written record, statecraft in this region has focused on managing water: the Tugu inscription records King Purnawarman ordering a canal dug around the river for irrigation and flood prevention.

Similarly, Bandung was founded on a riverbank. Regent Wiranatakusumah II moved the capital from Karapyak (today’s Dayeuhkolot) to the banks of the Cikapundung. The colonial town used the river as an ornament. Yet the river that made the city later became its drain. Bappenas now lists Cikapundung as the city center’s main drainage channel and an outlet for domestic and industrial waste.

Although hundreds of kilometers away, Cikapundung is one of the Citarum’s 13 main tributaries and joins it at Baleendah. From there, the Citarum runs through three dams: Saguling, Cirata, and finally Jatiluhur. The water travels as far as Purwakarta, and Jatiluhur is where it all meets.

Construction of the Jatiluhur Dam began in 1957, and it was inaugurated in 1967. Its reservoir covers about 8,300 hectares and stores 2.44 billion cubic meters. It runs a 187.5 MW hydropower plant, irrigates some 242,000 hectares, and is called the backbone of national food security. It also supplies about 80 percent of Jakarta’s raw water.

But Jatiluhur’s social cost went largely unnoticed. Filling the reservoir submerged 14 villages and moved 5,002 people to its shores and to Karawang. Those who stayed rebuilt their lives on the water.

IIn 1974, families whose farmland had gone under started making their living from floating-net fish cages. A whole economy grew around them: hatcheries, feed shops, boat ferries and household fish processing, much of it run by women. Then the cages outgrew the lake. By late 2022, official counts put 46,270 cage plots in the reservoir, about four times the 11,306 allowed under a West Java Governor’s regulation. So the state reversed course, ordering clearances under Presidential Regulation No. 15/2018 that carried serious social risks for everyone who depended on the fishery.

Those were the two times Jatiluhur people have been affected by two waves of “national interest”. After the dam’s construction displaced them, the clean-up took away the livelihood they rebuilt.

Now the CGK4 AI campus might become the third wave.

Water should stay a public good

We tend to treat water as if the supply never runs out. Political ecologists such as Erik Swyngedouw and Karen Bakker argue that scarcity is produced locally, not just by nature. It is rarely just about rainfall; rather, it’s a decision-making process about who gets water first when there isn’t enough.

On paper, Indonesian law has already solved this. In a 2013 ruling, the Constitutional Court struck down the 2004 Water Law and set five limits on commercial water use: (1) business use must not undermine people’s rights; (2) the state must fulfill the right to water as a human right; (3) management must protect the environment; (4) water stays under absolute state control; and (5) priority for commercial use goes to state and regional enterprises. The replacement, Law No. 17/2019, still allows private users, but under stricter licensing and priority rules.

Like other natural resources, water is tested during the climate crisis. In October 2023, Jatiluhur surface fell to 93.77 meters above sea level, below the 94.44-meter crisis line set by its operator, Perum Jasa Tirta II (PJT II), and about 14 meters under its normal maximum. The pattern recurs this year, as PJT II data show the reservoir dropped from 106.79 to 99.37 meters between 8 June and 5 August, and by 31 August it stood at 96.34 meters. BMKG expects El Niño to last into early 2027.

Chart 1. As Jatiluhur fell 10 meters, a 640 MW data center broke ground 5 km away

Reservoir water level (2026) meters above sea level. Last public reading 31 August; vertical lines mark the BDx data center groundbreaking and halt.

Downstream, 10,673 hectares of rice in western Indramayu were at risk of crop failure by late July, and farmers were asking for Jatiluhur water to be released. Closer to the dam, police have been trucking clean water to Desa Babakan Cikao in Purwakarta, where wells have run dry. On 27 September, police delivered water to about 200 families in Desa Kutamanah, on the reservoir’s own shore, who had been short for roughly three months. It’s a lingering irony that people closest to Indonesia’s largest reservoir are waiting for water trucks.

So where do local people sit? While PJT II insists the reservoir can still meet every user’s needs until the end of the year, allocation follows a hierarchy in practice: Jakarta’s piped supply first, then irrigation and industry, and last the households on wells nearest the dam.

Even Jakarta’s officials admit that the stress shows first in shallow wells, not in the pipes. Yayasan Amerta Air Indonesia’s Hotmauli Sidabalok has warned that data-center water demand could turn this into environmental injustice, pitting a basic human need against industrial cooling. However, the question of environmental impact assessment remains largely undisclosed.

Other countries show where this can lead. In 2023, as Uruguay went through its worst drought in 74 years and Montevideo’s tap water was mixed with brackish estuary water, Google planned a data center in Canelones that would use about 7.6 million liters a day, the domestic use of 55,000 people. Its projected impact stayed hidden behind a confidentiality clause Google insisted on, until local researchers sued to see it.

Protesters answered with a slogan that is a political-ecology thesis on its own: No es sequía, es saqueo. It’s not drought, it’s plunder. In Querétaro, Mexico, eight of eleven aquifers are overexploited, and families in nearby Viborillas get water three days a week, while well concessions keep industry supplied. In neither place was scarcity simply natural.

A closer look at the promise of CGK4

The hydropower promise

CGK4 will rise to six buildings over about three years. The first will deliver 120 MW of IT capacity in phases from early 2027, using direct-to-chip liquid cooling for racks of up to 500 kW. The headline partnership is hydropower. But the company’s own statement says power will come through the state utility PLN, while a hydro arrangement with PJT II is only being “actively pursued.” An Indonesian trade outlet put it bluntly: the hydro option is still being explored, so it would be wrong to say CGK4 runs on Jatiluhur’s power.

A bit of math shows why: running at full load all year, 640 MW of IT capacity would use about 5,600 gigawatt-hours. PJT II says Jatiluhur’s plant produces about 830 million kWh, or 830 gigawatt-hours, in an average year. The full campus would need almost seven times the dam’s entire output. Building 1 alone would need more than the dam produces, and that is before accounting for cooling energy.

Chart 2. The data center would need 3.4 times the dam’s own hydropower capacity

Installed or design capacity, megawatts. Its water need (384 L/s at full build-out) equals about 2.1% of the raw water Jakarta takes from Jatiluhur.

This means most of CGK4’s electricity will come from the Java–Bali grid, which still runs mostly on coal. So “hydro” may end up as more of a label than an energy source.

Moreover, hydropower has an El Niño problem. In 2024, drought drained Zambia’s Lake Kariba to about 8 percent of usable storage, forcing the country to shut its Kariba North Bank station while daily power cuts stretched to 20 hours. If CGK4 does sign up for Jatiluhur hydro, a simple question follows. In a dry year, who gets cut first: the data center, other grid users, or the irrigation releases that farmers depend on?

The employment promise

The employment promise deserves the same scrutiny. Official statements speak of 2,000 to 3,000 jobs for a Rp 3.5 trillion first phase. However, most construction work is temporary, and permanent data-center jobs are few and require high skills. In Johor, 51 approved projects together account for about 7,561 skilled jobs, roughly 150 per project.

West Java legislator Maulana Yusuf welcomed the jobs amid more than 10,000 layoffs in the province this year, but he asked whether they are worth the project’s impact, and demanded an open environmental assessment and guarantees for farmers’ irrigation water.

Mexico offers a sobering comparison. In Querétaro, big tech firms have promised jobs by the thousands, yet one Microsoft facility employed only 64 people in 2025. Data centers are highly automated, and the market does not warrant a huge transfer of skills, but rather electricians and security guards.

An implementation gap?

Proponents said that Indonesia’s permitting system is meant to prevent harm. So are the rules for coal and nickel mining, which also look impeccable on paper.

The Citarum has long been branded one of the world’s most polluted rivers despite decades of regulation. And when Maulana asked colleagues across the West Java People’s Representative Council (DPRD) about CGK4’s permits and AMDAL, he said most of them knew nothing. This means the gap lies not in the law but in implementation, disclosure, and enforcement.

To be fair, there are real benefits. Domestic compute supports data sovereignty. Direct-to-chip cooling can use far less water than evaporative towers, if the heat is released through dry coolers. An inland, low-hazard site reduces disaster risk, and a large, steady customer can justify grid investment. But none of these benefits is guaranteed to reach the people living beside the reservoir.

Towards a just transition

In the International Labor Organization’s (ILO) 2015 guidelines, a just transition means decent work, social dialogue, and social protection. At Jatiluhur, it has to mean a bit more: a fair share of water and power, openness about who gets to see the data, and recognition for the people already displaced by the dam and the cage clearances.

Other places offer a menu of options. Malaysia stopped approving high-water-use data centers and now requires reclaimed water instead of the public supply. Ireland — where data centers use almost a quarter of the country’s electricity — froze new Dublin grid connections in 2021 and reopened them only for those who bring their own generation (and source at least 80 percent of their demand from new renewables).

In Chile, residents of Cerrillos took Google to an environmental court, which in February 2024 ordered its permit re-evaluated for climate change and aquifer risk. Google said it had already switched to air cooling. In Hamina, Finland, Google’s seawater-cooled data center gives its waste heat to the town’s energy company for free, enough to meet an expected 80 percent of local district heating.

The warning comes from Memphis, where xAI ran dozens of unpermitted gas turbines next to Boxtown, a neighborhood already facing four times the national cancer risk.

So what would a just CGK4 look like? At the very least, here are five recommended commitments:

1. A published water budget, with no reservoir or municipal water used for cooling.

2. A binding drought clause: when Jatiluhur falls below the crisis line, the data center cuts back before irrigation or households do.

3. New renewable capacity, with co-benefits for local people.

4. A public environmental assessment and a monitoring board that includes fish-cage households and farmer water-user groups.

5. Local hiring targets and a benefit-sharing fund tied to electricity consumed, directed to restoring the upper Citarum.

Guarding Jatiluhur people’s source of life

Tarumanagara dug canals, Bandung was founded on the Cikapundung, and Jatiluhur displaced five thousand people from their hometown so the nation could have rice and electricity. Each generation’s infrastructure has been built on the same river, and on the people alongside it.

The proposition CGK4 puts forward is not whether it should be built; it asks whether this generation will repeat the old bargain, where locals carry the costs and distant users enjoy the benefits. Or shall we give them the benefit of the doubt that they will honor the Constitutional Court’s principle that water belongs to the people first?

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Since July, fires have engulfed hundreds of thousands of hectares of forests in the islands of Kalimantan, Sumatra, and Papua, marking what appears to be an annual disaster. Year after year, the cycle repeats: news of large forest fires appears in national media, millions of lives are endangered, citizens across the country demand that the government do something, the government promises to act; then months pass without significant reform, and the cycle of negligence continues.

Or read the article:

While these horrors can be called an ecological crisis, they are by no means natural. Forest fires in Indonesia were, are, and will always be man-made disasters if the Indonesian government continues along its path of environmental malpractice.

But fires, in and of themselves, aren’t the main culprit. The culprit is the extractive and exploitative agroforestry industry that uses legal loopholes to expand concessions and maximize profits at the cost of the local environment.

This episode connects the dots between the centuries-long tradition of using fire to clear land and how it has been misused today to exploit land for corporate interests. Because traditional practices are easy, fast, and cheap, burning has become the go-to method for land-clearing in the agroforestry industry, especially for palm-oil companies. Add peatlands dried out over decades by ineffective food estate programs, and the problem has grown to the scale we see today.

The government should have acted decades ago; the next best time is today. Watch this episode to learn what these imminent reforms could look like.

What should we cover next for the future Second Thoughts episodes? Drop your suggestions in the comments or by replying to this email!

Early in 2025, the Constitutional Court annulled the 20 percent presidential threshold requirement in Article 222 of Law No. 7/2017 (Elections Law). Together with an earlier 2023 ruling that mandated the House of Representatives (DPR) to revise the 4 percent parliamentary threshold proportionally for the upcoming 2029 elections, the Court presents a rare opportunity to reimagine Indonesia’s electoral framework, effectively dismantling artificial barriers that guarded national politics for decades.

These rulings must guide the House’s current revision to the Elections Law to reflect proportional representation and constitutional fairness. Yet, Senayan has signaled a parliament scrambling to protect its status quo rather than honoring the spirit of the ruling. Instead of accepting the end of the threshold era, lawmakers are actively floating new, convoluted mechanisms designed to maintain their gatekeeping privileges.

1. Status quo’s defense of the 4 percent parliamentary threshold

For years, the political establishment has defended the 4 percent parliamentary threshold using the “effective governance” argument. The claim relies on the premise that limiting the number of factions in parliament prevents extreme fragmentation; making it easier for legislation to pass. Preventing deadlocks is a valid rationale for a multi-party presidential system like Indonesia’s, but Indonesian presidents have built large coalitions that cover most of the House.

Current President Prabowo Subianto’s KIM Plus coalition covers 81 percent of seats in Senayan. Jokowi’s second-term governing coalition also reached 81.9 percent. These facts suggest that using effective governance as an excuse to impose high barriers to entry only justifies consolidating power among a handful of major parties.

This gatekeeping creates massive democracy costs; over 17 million votes never translate into seats in the 2024 general election. Out of roughly 151 million valid national votes, the 4 percent threshold required a party to secure approximately 6 million votes to enter the legislature.

The United Development Party (PPP) secured 5.87 million votes, or 3.87 percent of the national total. Because they fell a fraction of a percent short, the party was entirely wiped out of the House for the first time in about 50 years. As a result, nearly 6 million citizens cast valid ballots for a party that earned enough votes to win seats in some districts, but still had no representation at the national level.

They weren’t the only ones. The Indonesia Solidarity Party (PSI) also had 5 candidates would have been seated if only the party clear this threshold. This shows a democratic system that intentionally discards the voices of millions of voters. If a candidate wins the majority of votes in their district, they should be able to secure the seat at the parliament. A higher threshold risks losing the essence of proportional representation in an electoral democracy.

After a Constitutional Court ruling highlighted the disenfranchisement caused by the 4 percent threshold, the ruling parties’ response has been spectacularly tone-deaf. Instead of recognizing the need for more proportional barriers, parties like Gerindra and Golkar have floated proposals to raise the threshold to 5 percent. Nasdem has pushed the boundary even further, suggesting a 7 percent threshold. These defy all democratic logic. If a 4 percent erased 17 million votes, a 7 percent threshold would silence many many more citizens..

We think these suggestions have nothing to do with effective governance or legislative efficiency. They are overt attempts by incumbent cartels to shrink the political arena, eliminate smaller challengers, and divide the legislative pie among an ever-shrinking circle of elites.

We do not have to look far to see that democracy functions just as well without these barriers. At the subnational levels, Regional People’s Representative Councils (DPRD) operate entirely without a parliamentary threshold. Parties win seats directly proportional to the votes they gather in their electoral districts. PSI has exactly 1 seat in various local parliaments. No mainstream discourse suggests that local governance is failing because of excessive party fragmentation; at least none that we’re aware of.

If the proportional system works across Indonesia’s regions to capture the diverse political will of local populations, there is no reason it cannot work nationally. The insistence on a national threshold is a manufactured necessity.

2. Inventing a new gatekeeper in a recent presidential threshold maneuver

The Court’s ruling on the presidential threshold being unconstitutional is also at risk of being similarly thwarted by lawmakers desperate to maintain their leverage. With the 20 percent barrier struck down, emerged in recent discussions in the House an entirely new hurdle: requiring a presidential ticket to be backed by a coalition of at least two parliamentary factions.

This requirement blatantly disregards the Court’s mandate. The ruling should be interpreted as a clear directive that parliament cannot arbitrarily add thresholds to limit candidates. If a single party has the confidence, the internal machinery, and the public support to nominate its own candidate, it should not be legally forced into a marriage of convenience.

Forcing a minimum two-faction coalition is purely political maneuvering. It exists to guarantee that the major parties remain indispensable brokers in every presidential race. It forces transactional politics, where policy platforms take a backseat to backroom deals over cabinet seats and resource allocation. By trying to invent new rules to replace the old ones, the parliament is signaling that it views the electorate not as constituents to be represented, but as obstacles to be managed.

The House should choose meaningful democracy

The House of Representatives now faces a choice. Lawmakers can accept the Constitutional Court’s rulings as the foundation for a more mature, representative democracy; or they can keep treating election law as an incumbent protection racket. Interpreting the rulings in good faith means rethinking the arbitrary 4 percent parliamentary barrier, rejecting the proposals for higher thresholds, and stopping the invention of backdoors like the two-faction presidential rule.

It is time to come to a truly open, proportional, and fair electoral framework. If a party wins a district, they deserve a seat. If a party wants to nominate a presidential candidate, they should face the voters, not a coalition gatekeeper. Anything less betrays public trust in our democratic process.

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10 August 1995. Seven days before Indonesia’s independence commemoration day. In Bandung, thousands gazed at the sky as the N250 Gatotkaca readied for its maiden flight.

Across the archipelago, millions more watched on television, from government offices to roadside warungs, as TVRI broadcast the moment nationwide through the Palapa satellite network.

For many Indonesians, it was perhaps the closest thing to an Apollo moment. It was as if the country itself had just landed a person on the Moon. The N250 was, of course, no Saturn V. Yet, for a country at Indonesia’s then-level of income and technological development, the achievement felt like an income-adjusted equivalent.

Even reasonable skeptics of Indonesia’s aerospace ambitions could not easily dismiss what they had just witnessed: the country had successfully designed and flown its own commercial aircraft. Thanks to the then-Research and Technology Minister (later President) B. J. Habibie.

Taufiq Kiemas’ reaction was especially revealing. A prominent figure in the Indonesian Democratic Party (PDI) — and husband of party chair Megawati Sukarnoputri — Kiemas had frequently criticized the industrial policy projects associated with Habibie. Yet, Kiemas attended the N250’s maiden flight in person and reportedly wept as the aircraft lifted smoothly from the runway. It was a small but telling indication of how significant the N250 was as a symbol of both national pride and unity.

The N250 seemed to also embody the confidence of the era. As the aircraft gathered speed along the runway, Indonesia itself appeared poised for takeoff. The economy was growing at 8.2 percent in 1995, industrialization was rapidly proceeding, and the end of the Cold War had ushered in an extraordinary period of optimism about globalization and the prospects of emerging economies.

As capital poured into Southeast Asia and the region’s convergence with the industrialized world became durable, Indonesia was a prospective Asian Tiger, following South Korea, Taiwan, and Singapore as rapidly industrializing economies.

Indonesia was finally enjoying somewhat of a honeymoon period in its long arc of history.

Or so we thought. Just three years later, the honeymoon was over. The economy collapsed, the political order that had governed Indonesia for three decades fell, and the N250 program was dismantled before reaching commercial production.

The aircraft that had once represented Indonesia’s technological ascent was confined to a hangar. It would never fly again.

It all went downhill after the 1997 crisis

The 1997 Asian financial crisis did more than deprive the N250 of financing. Fundamentally, it radically transformed the political and institutional environment in which Indonesia’s aerospace program had been built.

As Indonesia turned to the International Monetary Fund (IMF) for emergency financing amounting to US$ 43 billion, continued support for aerospace company IPTN, which produced the N250, became part of a broader renegotiation of the country’s development model. The IMF-supported program required withdrawing budgetary and extrabudgetary support for the company and dismantling key fiscal mechanisms that had sustained it.

The conventional argument was that IPTN was expensive, Indonesia was still poor, and the resources devoted to aircraft development could have been better spent elsewhere. In a stronger version, Habibie’s aerospace ambitions were portrayed as an extravagance that helped push the country toward bankruptcy.

Yet, the claim that the N250 was expensive is rarely expressed relative to the size of the Indonesian economy. Development of the aircraft required roughly US$ 650 million. Spread over the development period from 1989 to 1998, this amounted to only about 0.03–0.04 percent of GDP per year. Of course, that didn’t establish the program as a good and effective industrial policy. But that estimate did make it difficult to prove that N250 was a significant macroeconomic burden whose cancellation was necessary to resolve the crisis. By comparison, the eventual fiscal cost of bank restructuring after the 1997 crisis approached 39 percent of GDP.

Dennis de Tray, the World Bank’s country director for Indonesia during the crisis, later acknowledged this distinction. Looking back on the 1998 reform package, he said that IPTN was “relatively unimportant in an economic sense,” suggesting that withdrawing support mattered primarily as a signal intended to restore investor confidence.

This thus begs the question: if IPTN was economically relatively unimportant, why was it targeted so explicitly? Part of the answer lies in the intellectual and political climate of the 1990s. Under the prevailing Washington Consensus, industrial policy like IPTN had become deeply unfashionable. Governments were increasingly expected to liberalize markets, reduce discretionary intervention, and let market signals discipline capital allocation.

A central presumption was that governments could not reliably “pick winners”: directed credit, infant-industry protection, subsidies, and support for targeted sectors were therefore treated with considerable suspicion.

IPTN represented a very different development philosophy, closer to the Hamiltonian state-involved industrialization strategies historically pursued by Japan and South Korea and, later, by China: the deliberate attempt by the state to build domestic technological and productive capabilities through subsidies and directed credit. IPTN therefore mattered beyond its immediate fiscal cost. It became a symbol of a broader development model that sat very uncomfortably with the dominant policy orthodoxy of the 1990s. In this sense, the dispute over IPTN was also a dispute over whether developing countries should retain the ability to conduct ambitious industrial policy at all.

To be fair, this skepticism had some basis in Indonesia’s own experience. Much of the country’s import-substitution drive in the 1970s and early 1980s produced protected industries that remained inefficient, lacked technological learning, and were weakly exposed to international competition.

Yet it is too crude to place IPTN in the same category. Unlike many earlier protected industries, IPTN did generate substantial technological learning and accumulated human capital. Its commercial performance was of course debatable, but the underlying capability-building process was real.

Many features of the New Order economy plainly required reform–it was long overdue. The more contentious question was whether to attempt a sweeping institutional restructuring in the middle of an exceptionally severe financial crisis.

Economists across the spectrum raised this concern, including Joseph Stiglitz and Martin Feldstein. Feldstein, the former chief economic advisor under the United States President Ronald Reagan, argued that many of the IMF’s structural reforms might be desirable in themselves, but warned against using the currency crisis to force fundamental institutional changes that were not necessary to resolve the immediate balance-of-payments problem. He described undertaking such reforms “in the midst of a currency crisis” as particularly poor timing.

The IMF’s own retrospective assessments — through its Independent Evaluation Office (IEO) — later echoed part of this criticism. Its post-crisis literature recorded concerns that Indonesia’s January 1998 program had become overloaded with structural conditions whose connection to the immediate foreign exchange crisis was often remote, and that the effort to signal reform could itself undermine confidence by making the program appear implausibly ambitious. IPTN became one of the most visible casualties of that effort to remake Indonesia.

Industrial policy revived, but not our potential

The rest, as we know, is history. IPTN survived the crisis as PT Dirgantara Indonesia, but only as a shell of its former self. Employment fell from roughly 16,000 at its peak to around 4,000 after successive restructurings, while the company never recovered the engineering depth or indigenous commercial aircraft development capability associated with the N250 era. Much of the technical talent accumulated over decades — including engineers trained at leading institutions abroad — was dispersed, with some later joining foreign firms such as Airbus, Boeing, and Embraer.

My father, Endri Rachman, was a former IPTN engineer. He earnestly shared his testimony with a journalist about why he chose to leave the country after IPTN’s restructuring. The journalist's verdict:

“A series of meetings with him made one thing clear: Endri Rachman cannot fairly be called ‘unnationalistic,’ short on ‘national spirit,’ or, worse, a ‘traitor to the nation’. Driven by determination, he tried to return to the homeland to build his own aircraft factory in Bandung, without the slightest help from the government. I repeat: without the slightest help from the government!”

The irony is that the policy logic behind Habibie’s experiment has since become remarkably conventional. What was once portrayed as an eccentric form of state-led development is now standard practice across much of the world: governments subsidize strategic industries, protect critical supply chains, and finance technological upgrading.

Industrial policy has returned to the center of economic policymaking. Even institutions once deeply skeptical of such interventions, including the World Bank, now treat industrial policy as a legitimate area of economic policy, albeit with renewed emphasis on discipline, competition, institutional design, and measurable performance. Indonesia itself has reentered this terrain through downstreaming, electric vehicles, and other strategic sectors.

From this perspective, Habibie’s central premise seems less anachronistic than it did in the 1990s. It was the right idea at the wrong time: His ideas reached their zenith during an era when the prevailing international policy consensus was moving decisively against state-led industrial development. And to be fair, the problem was also deeply institutional. Many of his projects were implemented through a highly centralized political system, with weak mechanisms for competition, accountability, private-sector participation, and exiting failure.

Today, Indonesia’s contemporary industrial policy remains preoccupied with capacity rather than capability. The focus is extensively on the headline numbers: how many smelters are built, how much investment is attracted, and how much output is produced.

Habibie’s industrial projects, for all their flaws, aimed at a deeper objective: accumulating engineering capability, human capital, and technological learning. Their execution was often imperfect, and their institutional architecture was vulnerable to the New Order’s political economy. Yet, the underlying objective was capability accumulation.

In that sense, the N250’s most consequential legacy may be what Indonesia forgot after its cancellation. Over the following three decades, industrial policy gradually returned, but much of the institutional knowledge associated with building indigenous technological capability did not. In its place, the Indonesian state has resorted to instruments such as local content requirements and export bans, non-fiscal measures that divert the cost of industrial policy from the state to the private sector; perhaps bound by the trauma of attempting anything as ambitious as the N250 program, for fear of being accused of bankrupting the state.

What disappeared with the last flight of the N250 was not just an aircraft program, but rather a particular conception of development. It is the idea that Indonesia could deliberately acquire the organizational and engineering capabilities required to design, integrate, and eventually master complex technologies. As the country now rediscovers industrial policy, the harder task is to recover that ambition without reproducing the same institutional weaknesses that undermined it 28 years ago.

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Read this passage and think about when this diagnosis was made:

“The forest and land fires that engulfed vast areas of Indonesia were an unprecedented human and ecological disaster. A prolonged dry season caused by the El Niño climatic phenomenon created the conditions for the conflagration. But the fires were mostly ignited deliberately by plantation companies and others eager to clear forest land as rapidly and cheaply as possible, no matter what the consequences.”

If you think this was an international news report from a month ago about the forest fires in Kalimantan, you would be wrong. This diagnosis was the opening paragraph to a policy paper on the fires of 1997.

Titled “Trial by Fire,” this World Resources Institute (WRI) report from 2000 detailed the root causes behind the fires that engulfed over 10 million hectares of forest in Indonesia. The answer? Land clearing for agroforestry plantations, namely oil palm. It has now been 26 years, and yet their analysis still rings true.

As of August 2026, over 202,000 hectares of forest are burning in oil palm-rich Kalimantan. The resulting haze has made living in the region deadly for the millions of Indonesians on the island.

At its peak in early September 2026, the cities of Pontianak and Palangkaraya in West Kalimantan reached 507 micrograms per cubic meter of pollutants, making the air hazardous to breathe. As of 24 September 2026, both cities remain hazardous to live in because of fire-related pollution, according to air monitoring data from the Centre for Research on Energy and Clean Air (CREA). Not only at home, but neighboring countries have also been affected as smoke spreads to Malaysia and Singapore.

While the forest fires were an ecological disaster, they were by no means natural. As this edition of The Reformist will cover, Indonesia’s forest fires are — and have been — a direct byproduct of a lackluster forest management ecosystem, including legal loopholes that manipulate customary practices and the economic exploitation of land clearing for the monoculture palm oil industry.

The loopholes in the law

Indonesia has banned land clearing by fire since 2009. Article 69(1)(h) of Law No. 32/2009 on Environmental Protection and Management (‘UU PPLH’) states it in one line: no person may clear land by burning.

The Forestry Law (No. 41/1999) carries up to 15 years for deliberate forest burning. The Plantation Law (No. 39/2014) bans the practice outright for plantation operators. On paper, the question is settled.

But a complication sits just one subclause below. Article 69(2) of UU PPLH requires that the ban “give serious regard” to local wisdom:

The law’s own elucidation defines what this provision allows: Fire can be used only for a maximum of two hectares of land per household, planted with local varieties, and ringed by firebreaks so the fire cannot spread.

The provision exists to honor local farming traditions, as indigenous people have used fire to manage land across the archipelago for hundreds of years before the concept of Indonesia came to be. Scientific evidence even dates burning done by humans in East Kalimantan to at least 17,500 years ago, as prehistoric settlers used forest fires to clear land for agriculture.

But if we read the three conditions against modern oil palm concessions, the mismatch is obvious. No large corporation would hold concessions below two hectares; it just doesn’t make economic sense. Oil palm is also not a local monocot (it arrived from West Africa). And the land in question is often drained peat, where fire doesn’t stay inside a firebreak as it travels underground.

So, the exception cannot protect a concession holder. It can, however, protect an individual and smallholders, and that is where the complications for accountability start.

Last month, law enforcement named 72 suspects in Kalimantan for forest burning.

One of them, identified in a report as BS, allegedly set fire to twelve hectares in Tanjung Batu, Pulau Derawan, East Kalimantan. According to police, BS acted on a landowner’s instructions to prepare the land for oil palm plantations by burning it, on the practical grounds that ash fertilizes soil.

That particular case is unproven, and the person giving the order was an individual, not a company.

Despite playing into the loophole, UU PPLH actually anticipated this. Article 88 established strict liability: Anyone whose activity poses a serious environmental threat bears absolute responsibility for the resulting damage, without the plaintiff needing to prove fault. The point was to ask “whose concession burned,” not “who lit it.” A permit holder could not escape by pointing at a farmer.

But then came the Job Creation Law (UU No. 6/2023 or ‘UU Ciptaker’), passed under former President Joko “Jokowi” Widodo’s administration. The Law rewrote Article 88 of UU PPLH, deleting the phrase “without needing to prove the element of fault.” Instead, it delegated this requirement to the same elucidation that existed in the original Law.

The big caveat, however, is that in Indonesian law, legal elucidations do not translate to legal norms. This is why courts have since split on what the provision now entails, creating a large legal gray area that only further complicates cracking down on troublesome agroforestry companies.

The numbers show the result. Searching the Supreme Court’s decision directory for the phrase “kebakaran hutan” (forest fires) returns 1,185 first-instance criminal decisions, dating back to 2007.

Criminal decisions for forest fire cases peaked in 2020 at 304 cases, roughly double any other year, after the catastrophic 2019 fire season. The 2015 fires, which burned 2.6 million hectares, produced 86 decisions the following year. Compare those numbers against the scale of what burns annually, and the ratio speaks for itself.

However, the directory cannot tell us how many fires those cases cover, whether the penalties were ever paid, or where the money went.

If there is one low-hanging step of legal accountability the government can take amid endless backlash over the last month, it is to open Pandora’s box. Show the people how effective — or rather, ineffective — the legal system has been at cracking down on these fires. Only then can citizens begin to trust that corporate crackdowns actually mean anything.

The economics of fire

But the legal question only answers part of the problem. The other, more sinister, is the economics of burning forests to acquire land concessions. It’s no secret that most forest fires are concentrated in concessioned areas, particularly palm oil plantations.

Shortly after the fires of 2015, one of our editorial staff members went to the peatlands of Jambi, Sumatra, with the World Resources Institute (where she previously worked). The question put to a local resident there was simple: If everyone knows this will cause a fire, why still use fire?

The answer was equally simple: It has always been done this way. Other methods cost far more and aren’t always possible because heavy machinery cannot reach much of this terrain.

They were right. Modern estimates show that clearing land with fire costs only between Rp 50,000 and Rp 90,000 per hectare. In contrast, heavy-equipment land clearing can cost between Rp 1 million and Rp 15 million. Faced with this kind of gap, the rational choice is to burn.

But that cheapness is an illusion, because these costs rarely cover the negative externalities attached to them. One study estimated the cost of damages from the 2015 fires was twice that of the 2004 Aceh tsunami. From last month’s disaster, the fires have led to more than 72,000 acute respiratory infection cases in the third week of August alone

For the actors involved, however, every step is simply profitable. One study follows this trail in the Riau province. Degraded secondary forest, usually already illegally logged, is claimed and sold for about US$ 113 per hectare (Rp 1.61 million; 1 USD at that time = Rp 14,200). The land is then cleared and given paperwork to look legitimate, then resold for US$ 655 (Rp 9.33 million). Burning it — to get it planting-ready as fast and cheaply as possible — costs US$ 15 (Rp 213,554). Three years after the oil palm goes in, that same hectare is worth US$ 3,077 (Rp 43.8 million).

From Rp 1.61 million to Rp 43.8 million, that is roughly a twenty-seven-fold return.

Meanwhile, GAPKI, Indonesia’s palm oil producers’ association, has argued that the arithmetic is not so simple. Why would companies use fire if penalties for corporate burning can reach Rp 1.8 billion per hectare, which would dwarf any saving on land clearing?

This argument would be persuasive if the penalties were reliably collected. The only time the Environment Ministry (then the Forestry and Environment Ministry) announced successful legal proceedings against agroforestry companies was in 2023, when the government won judgments worth roughly Rp 5.6 trillion.

Early this year, in May 2026, President Prabowo Subianto and the forestry task force established last year, known as Satgas PKH, staged a ceremony marking Rp 10.27 trillion in fines collected and 5.9 million hectares of forest area recovered from “dirty” agroforestry companies.

Despite the hefty numbers, critics warn the recovery effort had underlying intentions. Some 4.12 million hectares of that seized land were given to Agrinas Palma Nusantara, a state-owned palm oil and biodiesel company, rather than designated as a natural forest. The process was also hasty and lacked public oversight. The regulation meant to govern these land handovers wasn’t issued until seven months after the seizures began.

The move felt like a land grab dressed up as forest restoration, showing that current laws fail to effectively curb bad actors. As this section shows, this may be by design.

The government and the palm oil industry are closely entangled through concessions and through campaign financing. Last year the industry recorded record exports of US$ 40 billion and contributed 3.5 percent of the country’s entire GDP. The larger the economic stake, the stronger the disincentive to enforce.

When enforcement does happen, it isn’t a shocker to see senior public officials dragged down along with the naughty corporate leader. For example, in 2007, the owner of the palm-oil Surya Dumai corporate group, Martias “Palm Oil King” Fangiono, was convicted after being found guilty of collusion with the local government to secure the clearing of forested land for palm oil concessions. The then-governor of East Kalimantan and several senior Forestry Ministry officials were also brought down.

Behind every business tycoon that breaks the law are public officials who gave it the green light.

Disincentivizing fire

If burning is a rational response to the price signals in front of a land clearer, then the policy question is not simply how to ban it harder. It is how to change the economic incentives behind the entire forest management ecosystem.

Here are six initiatives the government can do:

First, fund the local governments that actually manage each forest. Spatial planning, plantation supervision, fire response, and community protection all happen at the district and provincial level, and all of them are chronically under-resourced. A national crackdown enforced by one ranger per 26,000 hectares is an inefficiency in the making.

Second, supervise on-the-ground operations. The questions that matter are whether a concession’s canals are draining its peat, whether its firefighting equipment works, and whether fire keeps recurring in the same concession year after year. All three are measurable, and the last one is already visible in satellite data long before it reaches a courtroom. For permits still in process, the sustainability standard should bind at site selection, not be waved through afterward.

Third, make the permit trail public. This includes who owns the concession, where its boundaries run, what permits it holds, and whether villages or customary territory lie inside it. Right now, none of that is reliably available to the people living next to concession lands. The One Map policy, first introduced in 2010 under then-President Susilo Bambang Yudhoyono (SBY), was meant to resolve this issue, but it still leaves overlapping claims and competing map versions circulating between ministries. Early this year, in January, Agrarian and Spatial Planning Minister Nusron Wahid urged completion of the map within the next two years, suggesting the program is far from finished. What a travesty that three consecutive administrations, across 16 years, have failed to muster the political will to finish an imperative product.

Fourth, prioritize peatland restoration. As this article covers, drained peat can lead to uncontrollable burning. Canals must be blocked or managed, land rewetted, and planting matched to the peat’s condition rather than forcing the peat to match the crop.

Fifth, reduce the economic pressure that puts people near the match in the first place. Poverty drives smallholders to take up the work of forest burning, and the evidence is stronger than most people expect. Research by Johns Hopkins University and The Nature Conservancy in 2020 found that Indonesia’s conditional cash transfer program (PKH), designed purely for health and education outcomes with no environmental objective whatsoever, was associated with deforestation reductions of up to 30 percent. Expanding the program to concession-rich areas, in coordination with the Social Affairs Ministry responsible for PKH, should be considered.

Lastly, a more appropriate long-term model leaves the extractive mode behind for something restorative, regenerative, and redistributive. Protecting forests does not mean halting economic activity. Agroforestry, non-timber products like coffee, nutmeg, honey, and bamboo, paludiculture on wet peat, community-based ecotourism, and payments for environmental services. All of these generate income precisely because the forest is still standing.

The “Trial by Fire” report named the economic incentives, the governance failures, and the enforcement gaps in 2000, and every subsequent fire season has reaffirmed these findings. What the country has lacked is a willingness to make burning so unappealing that no bad actor even thinks about touching it within a ten-foot pole.

It’s time we put the fires out for good

“For more than three decades, since the exploitation of Indonesia’s forests began in earnest, key policy decisions related to forests (and almost everything else, for that matter) have been tightly controlled by small groups of unelected officials and their patrons in the large cartels that have dominated the economy.”

While this paragraph would have been an apt concluding analysis for the latest forest fires, it wouldn’t have been original. Because — surprise, surprise — this excerpt came from the same 2000 report we cited at the beginning of this article.

So while our present analysis looks back at “Trial by Fire” with 26 years of sorrow and anguish, especially the Indonesian government’s lack of action to govern wisely and effectively, our analysis is anything but novel.

Forest fires in the country have been the focus of analytical research by environmental activists, economists, and technocrats for far longer than most of you reading this have been alive. And yet for over half a century, inaction is still the leading cause behind tackling this persistent and pervasive issue that has and will cost millions of lives not just in Indonesia but regionally.

Perhaps our one question to the Indonesian government then is: If not now, then when? The time to act should have been decades ago; the next best time to act is now.

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For months, PT Bayan Resources Tbk (BYAN), the coal miner controlled by billionaire Low Tuck Kwong, could not get the Ministry of Energy and Mineral Resources (ESDM) to approve its revised annual production plan (‘RKAB’) that sets the company’s production quota. With no quota, Bayan had to stop producing and declared force majeure on its overseas delivery contracts.

While conglomerates like BUMI and Adaro may be larger, Bayan’s coal sits closer to the surface, resulting in the lowest overburden removal costs in the industry and exceptionally high profit margins. This makes it highly vulnerable to regulatory holdups and attractive to opportunistic buyers.

Bayan’s controlling shareholders then signed a conditional agreement to sell a large stake to PT Jhonlin Baratama, an entity linked to Andi Samsudin Arsyad, a politically connected businessman, also known as Haji Isam. The reported price was well below market. Within days, ESDM gave Bayan’s subsidiaries up to 20 million tons of additional quota, and the company withdrew its force majeure notice and resumed operations. Notably, the newly minted state investment agency, Danantara, did not absorb this lucrative stake for the public benefit. Instead, it was secured by Haji Isam, who is a principal campaign financier for President Prabowo Subianto—leaving market observers to draw their own conclusions about the ordeal’s true purpose.

An ESDM official told the press that the timing was coincidental and the result of routine administrative processing. But that’s not how the market reads it. As far as they could tell, the quota came through because of political alignment; technical compliance had little to do with it.

South China Morning Post (SCMP) reported that the Bayan case left an “unpalatable aftertaste” for investors, leaving market participants worrying about uncertainty over regulatory decisions and future government interventions.

This isn’t the first state takeover case

Bayan is not the first company to face this issue. A pattern emerges across the archipelago in which the state uses its regulatory power to push operators into distress and then toward targeted asset transfers or state absorption.

The Martabe Gold Mine in South Tapanuli, North Sumatra, is one of the country’s best gold assets. PT Agincourt Resources, a subsidiary of Astra International’s United Tractors, operates it. After severe floods in Sumatra late last year, the government’s Forest Area Regulation Task Force (‘Satgas PKH’) put Agincourt on a list of concessionaires facing immediate permit revocation over alleged environmental compliance failures.

Experts raised concerns about the Satgas PKH’s revocation list, saying the task force can only audit and recommend, but it doesn’t have the authority to revoke a mining company’s permit. Officials with legal authority must make the revocation decision. Meanwhile, Danantara’s Chief Operating Officer, Dony Oskaria, said the Martabe’s mining rights would be given to a newly established state-owned mineral company under Danantara, PT Perminas.

However, due to strong pushback from international investors, the government paused Martabe’s revocation, and the asset now sits under administrative “reassessment.” But while the government paused the revocation of the Martabe mine due to swift pushback from international investors, domestic tycoons have faced the full brunt of the policy. In January, the government abruptly revoked the permits of 28 companies across Sumatra, spanning over one million hectares.

Smaller operators run into their own versions of this. In South Sumatra’s coal corridors and Central Kalimantan’s mineral belts, independent operators have faced sudden holds on haul-road permits, port access, and forest clearing approvals. A recurring pattern emerges where independent operators face sudden, indefinite holds on their approvals, leaving them little choice but to sell equity to well-connected national or regional figures.

The government must be more transparent

This is not to say that large conglomerates or foreign-owned operators deserve protection. Big companies — owned by domestic tycoons or multinational parents — must comply with the law like anyone else. A company that breaks environmental standards, misses its local processing obligations, or avoids taxes should face firm enforcement.

But that enforcement has to come through due process, with transparent legal proceedings and equal treatment under the law. Enforcing a statute is one thing. Holding up permits until an asset lands with a favored buyer is another. If officials can decide on their own who may hold an asset and who must sell, the regulator stops acting as a referee and starts deciding who gets access to the sector.

If the state really wants to reclaim badly managed concessions or earn more from its natural resources, it has to replace this discretionary model with a transparent one.

Why not put all concessions up for auction

An asset should be returned to the public domain when its concession holder loses its operating rights due to a legal or environmental breach. It should go to an open tender and not be reassigned through an opaque administrative process or closed-door negotiation. Bidders at a public auction would compete on clear criteria, such as higher royalties for the treasury, binding guarantees for environmental remediation, and verified technical capability.

Making concession management public would break the rent-seeking cycle, because permits given behind closed doors create a trade that suits both sides. Politicians use regulatory bottlenecks to raise campaign money or win commercial stakes for allies, and companies focus on buying political patronage instead of running their operations better or improving their environmental record.

But it’s the public who pays for this in the long run. When approvals depend on patronage, country risk rises, and foreign investment falls. That raises the cost of capital across the economy. It pushes serious investors — the ones who bring technology, ESG compliance, and long-term capital — elsewhere, leaving the market to short-term rent-seekers.

Restoring institutional credibility means taking arbitrary leverage away from executive agencies and running the extractive sector on open, rule-based governance.

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Ahmad Dhani, his Wonder Woman wife Mulan Jameela, his Roman Picisan vocalist Once Mekel, his Aku Jadi Aku co-composer Melly Goeslaw, and his son’s LDR castmate Verrell Bramasta. What do they all have in common?

They’re all rich celebrities — yes — but what we’re here to discuss today is that they are all currently sitting members of parliament (MPs). Our dear and esteemed political representatives. The people who make the laws that govern us.

“Gosh, no wonder our politics is a joke,” I hear you mumble under your breath. What will be of our country? What do these people know besides sounding or looking pretty on our screens? Have they even read a book in their lives?

Well, you may not be entirely wrong, but being smart isn’t mutually exclusive with being a good representative. If you disagree, this piece will likely disappoint you. And while I’d love nothing more than to join the bandwagon of making fun of politicians, what I’ve observed so far has led me to believe we really need more celebrities in parliament.

And no, I’m not kidding. In fact, I have never felt more serious than I am right now as I start jotting down my thoughts on this.

But why?

When this Prabowo administration started, I had a list of legislative bills that I suspected would get fast-tracked. But I’d be lying if I said that the Copyright Law amendment even made my long list. It has now been shot to the top of the parliament’s political agenda, largely thanks to the celebrity MPs who sit in parliament today.

What began as petty arguments between a few famous composers and performers had snowballed into a debate that at first seemed super technical: royalty payment.

Read this Reformist volume on music royalty if you’re not up to speed yet:

And while things have gotten a tad bit more complicated now — with artificial intelligence getting in the mix — the bill has proven one thing: an agenda can only be a priority when the people debating it have a real stake in the decision.

Don’t get me wrong. Copyright is a serious matter that should concern us. In today’s economy, however, the fact that these celebrity MPs have managed to champion a bill that concerns, first and foremost, their own livelihood is actually what they’re supposed to do with the power that they’ve accrued, which is to (surprise!) represent.

Have we gotten it all wrong?

The short answer is “no.” The long answer is “no, but we might have been guilty of underestimating celebrities who run for office and overestimating our own ideals.” By the end of this article, I’ll prove you’ve been guilty of one, both, or neither.

In the current House of Representatives, there are at least 23 MPs who made (or still make) a living in the entertainment industry, earning them a ‘celebrity MP’ status. That list includes the names I mentioned at the beginning of this article, alongside:

• dangdut singers Ashraff Abu and Iyeth Bustami;

• ABG heartthrob Tommy Kurniawan, Panji Manusia Millenium Primus Yustisio, Gerhana damsel-in-distress Dina Lorenza;

• Citra nominee Nurul Arifin, Citra winner Rachel Maryam;

• comedians Eko Hendro Purnomo and Denny Cagur, quizmaster Nico Siahaan;

• Perwira and Ksatria star Dede Yusuf, racer Moreno Soeprapto, supermodel Arzetti Bilbina;

• Ungu frontman Sigit “Pasha” Purnomo, Tenda Biru chanteuse Desy Ratnasari, Cinta Semu rapper Uya Kuya, Hati yang Kecewa minstrel Nafa Urbach, and Bajaj Bajuri sweetheart Rieke Diah Pitaloka.

If your gut reaction is to feel sad and concerned that these are the people representing our — the public — interests in parliament today, you’re not alone. After all, it only makes sense that the most capable among us occupy these high-stakes seats. If we took these celebrities from Senayan, everything would’ve been so much better, and politics wouldn’t be so frustrating.

… Right?

Of course not. But how many of you reading this have made fun of celebrities winning legislative elections before? Ahead of the 2024 elections, pundit Lucius Karus was quoted by many news outlets, including the BBC, as seen above, saying “They can sing, act in movies, joke on stage, but they’re not capable [of serving] as legislators.”

I’m not saying that they haven’t earned the cynicism. Khoirunnisa Nur Agustyati, then-chief of the Association for Elections and Democracy (Perludem), made a good case. “We have seen time and time again that some of these celebrity politicians do not take their new responsibilities seriously,” she said, concerned that “some of them still perform shows or appear in commercials.”

To an extent, I agree with these observations. But perhaps something else here needs closer inspection.

Why do we deride celebrity MPs so much?

I don’t know if there’s a single reason to explain why celebrities, collectively, are seen by many, if not all of us, as incapable, incompetent, or unfit for office. Hopefully, at least one of the following three hypotheses represents your view.

1. Celebrity MPs are shallow vote-getters

Even without the usual campaign posters and banners polluting the streets, many are already familiar with them. It’s almost unfair. If a regular politician has to spend billions to be acknowledged by the voters in their electoral district (‘dapil’), a celebrity joins the race having already built a ‘fanbase’ at best or a sense of familiarity at worst. This phenomenon earns them the permanent mark of a ‘vote-getter,’ meaning someone political parties nominate for no other purpose than to win as many votes as possible so they can pass the 4 percent parliamentary threshold.

In a country where celebrity news gains so much attention that it becomes an industry of its own — the ‘infotainment’ — any celebrity seeking to run in elections has an upper hand that other candidates don’t. Yet as we’ve already established, popularity is a disadvantage just as much as it is an edge.

Desy Ratnasari has a PhD in Psychology from Atma Jaya, with a dissertation on gender equality. But when she began her third consecutive term, some felt it was more appropriate to focus on the fact that she’s a widow.

Rieke Diah Pitaloka, also on her third consecutive term in parliament, graduated cum laude from Universitas Indonesia with a PhD dissertation on data governance. But, unsurprisingly, what makes the news is either her Instagram outfit or skincare regime.

This isn’t to say they represent most celebrity MPs, but they’re not outliers either. Beneath the glams and flashes, these celebrities are just like the rest of us. They are not a monolith defined by one thing. Ahmad Dhani is a controversial rockstar but also a Sufism observer. Nurul Arifin is a bona fide movie star but also a women’s rights activist.

I can go on, but I think I’ve made my point. Their visibility gives them a slight edge, but it also creates a problem the rest of the field doesn’t have to deal with (at least not as much): voters who assume their celebrity status automatically means a lack of depth.

2. Celebrities are in it for themselves

My next hypothesis is that people see celebrities as this group of rich, greedy opportunists who are using politics for their personal gains.

What’s another Rp 100 million a month for Melly Goeslaw, who in March 2025 posted on Instagram about receiving almost six times that from her collective management agency (‘LMK’) in royalties thanks to her massive pop song catalog.

But why are we so outraged about rich celebrities taking up space in parliament when the cost of politics in Indonesia is impossibly expensive? A research project I co-edited for the Westminster Foundation for Democracy (WFD) in 2024 estimated that the median cost of securing a parliamentary seat in Indonesia is 5 billion rupiah per candidate. For the average Indonesian, that’ll take 140 years of earning the national median income of Rp 36 million (annually) without spending a dime to afford a successful campaign. Well, at least theoretically.

My point is not that we should just sit idly by while politics continues to be a game exclusively reserved for and by the richest among us. Even the Finance Ministry’s most modest estimate still came out to Rp 1 billion in average spending per candidate — and that’s without even a guarantee of winning a seat.

Imagine spending that much money for a job that wouldn’t even earn you a net return after serving a full five-year term.

The argument that celebrity MPs are in it for themselves doesn’t hold up once we look deeper into the matter. What if it’s not as simple as a financial calculation? And while you’re at it, ask that same question to everyone who decided to run for Senayan, not just the celebrities.

3. Celebrities don’t have what it takes to make laws

Well, yeah, but it’s not like the remaining 557 MPs in parliament today are the most revered policy experts either.

Let’s get to the real point.

Representation is competence itself

Our political debate has completely missed the mark on this one. Every election season, we get into this heated debate over who is the most competent candidate to give our votes to. And every other election season, we bicker with online trolls and exit the unbearable family WhatsApp group chat because their political choices are not reflective of someone who prioritizes competence.

Deplorable.

Hold your horses. Entertain me for a second here. For every job out there, including being an MP, competence is never a fixed mathematical equation defined by a universal formula. By default, we expect competence to align with things like higher education, relevant experience, good standing, inspirational speeches, statistical mastery, language proficiency, and so on.

This is fair in most jobs, but in democracy — where the most valuable capital is a vote — I beg to differ. Competence comes in many facets, some of which will feel morally deprived and downright wrong.

Visiting the slums that never get attention, having photo-ops while climbing down into the sewers, slowing down your speech patterns so some voters relate better, plastering your face on rice bags so they remember who fed them that day, looking pretty while waving around on a campaign trail, organizing dangdut concerts at a village that only knows survival — all of these shouldn’t be dismissed as ‘cheap theatrics’ just because they don’t fit the list of skill sets we believe are necessary to run for public office.

If politics is a matter of who gets what, when, how — as American political scientist Harold Lasswell titles his seminal 1936 book — then celebrities have proven their competence for the job simply by winning in their dapil. Whether those who lost are more credible, have advanced degrees, and bring decades of public service does not change the fact that these celebrities have been chosen to represent. That, in and of itself, is the only competence that matters.

That, unfortunately, is the bitter truth. I don’t like it. Not at all. But not liking something isn’t enough to bring about change.

Every nation gets the government it deserves

“Toute nation a le gouvernement qu’elle mérite.”

A popular quote by Joseph de Maistre of Savoy, a historic region now in southeastern France. Often misattributed to Thomas Jefferson, many have misused it to shift the blame from a broken system to bad individual choices.

A counter-revolutionary, Maistre believed that a monarch is divinity itself and therefore should not be challenged. He did not mean that we are individually responsible for our own miseries, and it was never about voting in elections. Well, at least not in the way that we perceive it today. His writing, which I think would get him instantly canceled if published today, was much deeper: that a political system cannot be artificially engineered. Instead, he argued, whatever government rules a society is a direct mirror of the spiritual and moral state of its people.

But what does this have to do with celebrity MPs?

The celebrity MPs have proven one thing: if you want your priority to take precedence, then put your hand in it. Otherwise, we’ll keep relying on the people we’ve elected to represent us. Unfortunately for us, though, what they eventually represent doesn’t always align with what we believe when we make our decision in the voting booth.

Think about the three hypotheses I’ve presented above. We constantly undermine celebrities in politics because they’re shallow. We predetermine that celebrities are only in it for themselves. We reject celebrities because they’re not competent.

And despite all that, they are in parliament. And, as we’re witnessing with the advancement of the Copyright Bill, they are moving their priorities to the top of the political order.

Now I don’t assume that The Reformist readers are all the same. Each of us has different things we want to prioritize. For activists, it may be to pursue social justice. For women, it may be to be safe from violence. For the Indigenous people, it may be to protect their ancestral lands. For every one of us, it may only become a priority if we throw our hands in.

So, yes, I wasn’t joking when I wrote that we need more celebrities in parliament. But also more activists, even if everyone thinks that’s selling out, just like the celebrities who are shallow vote-getters; more women, even if their political party only nominates them to fill the 30-percent quota, just like the celebrities who are only in it for themselves; and more Indigenous people, even if their traditional wisdom does not come with fancy degrees, just like the celebrities who don’t have what it takes.

Perhaps this is what we’ve been missing all along: someone with personal stakes in the system. If we want to get the Indigenous Rights Bill prioritized, let’s get more Indigenous people in parliament. If we want the Human Rights Defenders Bill legislated, let’s get more human rights defenders seats in Senayan.

Just like the celebrities who stood up for themselves for their royalties, every single one of us should too. Even if chance says we’d end up right where we started.

Do it anyway.

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Write to us: connect@thinkpolicy.id

Prologue

It was a fall evening in 2021. The credits just rolled at the screening of “Vengeance Is Mine, All Others Pay Cash” at the BFI London Film Festival. Audience members of various nationalities clapped, exchanging thoughts on the film.

Any Indonesian abroad sitting in that Southbank cinema hall, one of the biggest film capitals, with critics and viewers from around the world would perhaps feel a fleeting sense of pride; or at least that’s what one of our editors here at The Reformist, who was there at that time, felt.

Vengeance isn’t even the first Indonesian film selected for screening at an international film festival. Mouly Surya’s Marlina: A Murderer in Four Acts was selected for Cannes in 2017 — the first time in 11 years that an Indonesian film was featured.

A year later, Kamila Andini’s The Seen and the Unseen won Best Feature at the Berlinale. In 2022, a year after Vengeance, Makbul Mubarak’s Autobiography was screened in London after its stellar world premiere (and award win) at Venice.

This critical acclaim and global reception are only a small fraction of the larger discussion about Indonesian films. But if you’re like us — enjoy films and believe that the Indonesian film industry should thrive more — you might share our optimism that international recognition reflects the quality of our films, made by talented filmmakers on par with their international peers, but also, and most importantly, exhibits our confidence and audacity in telling stories that are distinctly Indonesian.

After all, aren’t films cultural artifacts that represent the Indonesian identity on the global map?

Let’s tread carefully here, because this notion has historically been wielded as a double-edged sword. The government, most notoriously under former President Suharto’s New Order, has used films to control official narratives and shape national identity. But after seeing Vengeance, for example, we might think our country’s history of state control over the film industry dissipated after the end of Suharto’s rule.

After all, a story centered on a man’s erectile dysfunction and his subsequent machismo is not exactly the kind of “Indonesian values” imagined by the architects of the authoritarian dictatorship to be depicted in a film. They probably didn’t want ‘impotent’ to represent our identity. And ‘violence’ is not exactly moral.

But a deep dive into the country’s current film policies shows that Suharto’s legacy still influences how film is governed today. And with the dictator long gone, this raises the question: how does the government currently govern the film industry, and what can be done to invest in the industry’s nascent global growth?

Read along as this edition of The Reformist examines how the Indonesian government treats the silver screen through policies that shape the industry’s fate today, and how examples of state-supported innovation like South Korea could be a model for Indonesian film.

Act I: The threat

The politics of State control in film content

It was interesting to see how the government has treated films from one regime to another. For a long time, Indonesia has kept films on the periphery of its priorities. It’s plausible to assume this may be the origin of the government’s neglect of the film industry, setting bad institutional precedents we’ve unfortunately come to inherit.

Until the past few decades, the state apparatus often viewed films as a “threat to the status quo and public order,” and a tool for establishing state narratives.

This is most apparent during the New Order, which was notorious for using films to assert state-approved history. A generation of adults reading this article is perhaps still traumatized by the gory details of Pemberontakan G30S/PKI (The Betrayal of the Communists), a film that set the official narrative of what happened before Suharto rose to power. But contrary to popular belief, the New Order didn’t invent strict film censorship or the use of film as propaganda. Both were legacies from the very regime that fell in Betrayal’s ending.

In 1964, Suharto’s predecessor Sukarno released Presidential Decree No. 1/1964, mandating the Information Ministry to “foster” films as a medium for “nation-building.” Article 9 required all Indonesian films to support the country’s ideology, Pancasila. A year later, the then-Information Ministry established the Film Censorship Body (BSF), supposedly to protect the people from the film industry’s bad influence and ensure all films serve their nation-building (uhm, propaganda) purpose.

When Suharto came to power, he shared the idea that films could influence order, so the government needed to assert control through censorship. But he had a slightly different approach, which resulted in a striking paradox:

In the 1970s, Indonesian cinema began to flood with bizarre, explicitly violent and sexual films — or what film scholars dubbed “exploitation films” and international distributors labeled as “cult movies.” Titles like Bernafas Dalam Lumpur (1970) and Primitif (1978) were box office hits despite their controversial portrayals of prostitution and cannibalism.

It might seem illogical that this kind of film would proliferate in a regime infamous for heavy censorship. What were the criteria that made films with depictions of gore and sex pass censorship?

The BSF, inherited from Sukarno’s regime, reviewed every film’s theme, dialogue, and visuals against five criteria: religion, socio-political content, culture, decency, and security. On paper, any exploitation film wouldn’t get a green light for its lack of decency.

But in Suharto’s New Order, a film’s “socio-political content” and “security” aspects seemed to carry more weight in the censorship process. Films wouldn’t pass when depicting something that might incite ethnic or class conflict, or any hint of disorder that might “destabilize” the regime.

Meanwhile, films with sex and violence had room for negotiation, allowing for trims and cuts of scenes instead of an absolute ban, because these films were deemed ‘apolitical entertainment’. This is not to say that the New Order never censored or banned films for indecency. The regime repeatedly tried to crack down on decency violations with its developing censorship regimes, but its enforcement was largely sporadic or reactive to public response.

In 1992, the government’s encroaching hands in the film industry were further formalized through the passage of Law No. 8/1992 on Film (1992 Film Law). The Law kept the New Order’s emphasis on censorship that film must “foster national culture”. Or as Australian scholar Krishna Sen put it: “[this law was written by] a state that sees itself as threatened by the cultural work of its own citizens.”

The 1992 Film Law also prompted the establishment of the Film Censorship Agency (LSF), formalized through Government Regulation No. 7/1994, which still exists today.

In 2009, the Susilo Bambang Yudhoyono (SBY) administration replaced the 1992 Film Law with Law No. 33/2009. While it was initially pitched as the reform Indonesian cinema had been waiting for, it delivered less than promised.

The LSF survived the transition intact, still a censorship body rather than the classification body that reformers had asked for. Every film policy since 1964 has renamed the justification for controlling what Indonesians can watch without ever seriously asking whether the government should be in the content-control business at all.

In 2026, the answer should be crystal clear: no, the state has no business controlling film content if it wants to elevate Indonesia’s film quality and help the industry flourish. In fact, the key emphasis should be for the government to exit content regulation entirely and shift toward investing in the industry with strong political will and institutional support.

Act II: The tug of war

The lethargic support for a promising industry

Since Reformasi, film policy has never lived in one ministry, and inconsistent jurisdiction has also limited the industry’s investment and growth potential.

Film has always been split between an institution governing content, like the LSF, and an institution governing industry, such as the Creative Economy Agency (Bekraf).

Between 1999 and 2024, film policy’s institutional home changed configuration at least four times. No single body has held jurisdiction over this policy continuously for more than roughly five years.

These changing hands have affected how the government prioritizes film. For instance, since 2015, the government’s language toward films has changed from “protecting” its people from film to acknowledging the industry’s economic and cultural potential.

This rhetoric shifted under Bekraf. Established in 2015, Bekraf’s mandate was to grow the funding, infrastructure, and market access, rather than the culture or moral instruction of creative fields. It operated under a different institutional logic than anything film had lived under before.

In 2019, Bekraf merged with the tourism ministry, becoming the Tourism and Creative Economy Ministry. This move drew significant pushback. Film director Ernest Prakasa, for example, was concerned about how the combined ministry would manage a budget for both tourism and the creative industry, which has 16 subsectors. His fear was not unfounded: the sector was largely ineffective for close to a year while budget lines were untangled.

The most recent reshuffle, in late 2024, is worth examining most closely, because it changed both halves of the content and regulation sides at once. The latest ministry to house film governance — the Education, Culture, Research, and Technology Ministry — was broken into three ministries, and under Presidential Regulation No. 190/2024, the Culture Ministry is now a standalone ministry that carries the mandate to govern film policy.

For the first time, the film industry’s regulatory home is not bundled with a general education portfolio.

Good news! But is it?

Well, it does, in theory, dismantle one specific, archaic bureaucratic entanglement: housing film policy inside a ministry whose main job is to oversee the nation’s schooling system.

In practice, the doctrine that film exists to serve state-approved values doesn’t appear to have gone anywhere. At LSF’s November 2024 national meeting, Culture Minister Fadli Zon defended the institution’s continued relevance in almost the same terms Sukarno’s 1964 decree used: protecting society from film content “contrary to the values of Pancasila and national identity.”

The other half of the duality split at the same moment. The Creative Economy Ministry becomes standalone, with film being explicitly named among the five priority programs across its seventeen subsectors.

So the industry now navigates between two singular ministries that didn’t exist in their current form a year ago: the Culture Ministry holds content regulation and licensing, while the Creative Economy Ministry holds industry development and access to financing.

The inconsistency may not be incidental to the film industry’s stall. Four ministerial configurations in twenty-five years signal continuous improvisation. Yet, every handover has cost the industry a transition year of reduced institutional bandwidth. An industry that runs on multi-year production and financing cycles has been governed under ministries that might change configuration every five years.

The country’s film industry has spent too long braving the country’s “wild west” ecosystem without any armor. No wonder observers noted that Indonesia’s film industry is increasingly successful not because of government policy, but despite it.

Act III - The neglect

Film’s economic contribution to Indonesia

In fact, the country’s commercial moviegoing experience is defying global trends — recording new all-time highs of 126 million theatre admissions and 285 new feature titles produced in 2024, bouncing back stronger than expected after the pandemic comatose.

In 2024, Indonesia ranked 9th in theatre admissions worldwide. We recorded a new high of 126 million theatre admissions, the highest since 2019. As a share of admissions, Indonesia actually ranks third among the top ten market countries for regaining its pre-pandemic audience, beating out powerhouses like the United States, Canada, and the United Kingdom.

With at least 285 feature releases, we also produced 107 percent more films compared to 2023. Meanwhile, the rest of the world’s top 10, including China, the United States, India, Mexico, and Japan, saw only modest gains or even declines. Even more interesting, the Indonesian market has shown a preference for Indonesian films, with local production capturing 65 percent of the cinema market share that same year.

The industry almost has it all: it contributed Rp 81 trillion to Indonesia’s GDP and employed about 387,000 people in 2024 (according to a joint study by Netflix and LPEM UI). It has talented, award-winning industry players alongside a local consumer base with a growing movie-going culture.

But Indonesian films are still severely underscreened. With a population of 280 million, the fourth-largest in the world, the country has only 468 cinemas with 2,293 screens. This translates roughly to one screen per 120,000 people. By comparison, China (over 1 billion people) has a denser screen-to-person ratio than Indonesia, with about one screen per 15,000 people. The numbers are even staggering when compared to Indonesia’s regional neighbors. The graph below shows this discrepancy.

This shortage has left hundreds of Indonesian films competing for limited distribution slots. According to Yulia Evina Bhara of the Indonesian Producers Association (APROFI), about 400 local feature films were ready for screening in 2025, but only 150 secured slots for theatrical release because of limited available screens.

More screens would allow for more film production and for filmmakers to experiment with new themes and formats, with less worry about making “safe” films to fight for distribution slots (ones more likely to bring audiences to the cinema, which today are horror, comedy, and family drama).

But for this to happen, APROFI chair Edwin Nazir said in an interview with Variety magazine that the industry needs more players in distribution and exhibition so investors feel more confident investing. There are currently no distributors in Indonesia — strange — so film producers negotiate with cinema chains directly, and three big players make up over 80 percent of the whole country’s cinemas.

In an ideal world, our film ecosystem would allow enough screens to release both films that cater to market taste and preference and those that are bolder, whether in their themes or artistic expression, eventually converging the critical and commercial film tracks into one successful film industry.

Nazir put the industry’s own diagnosis on the record: “It’s about time for Indonesia’s film industry to have public production funds, tax incentives or rebate schemes, and other policies that will promote growth.” That is a producer, at the height of the industry’s best years on record, saying plainly that growth arrived ahead of policy, not because of it.

Act IV - The benchmark

Lessons from South Korea

If Indonesia were to choose a path to meet its potential, what would it look like?

South Korea offers a replicable model, not because its culture or market resembles Indonesia’s, but because its government solved its institutional problem. It governs film under a belief that film matters, economically and culturally, and invests in infrastructure that would outlast any administration.

In 2006, South Korea issued the Promotion of the Motion Pictures and Video Products Act, or the Yeong-Bi Act (yeong-hwa: film; bidio: video). This Act mandated the establishment of the Korean Film Council (KOFIC) to enhance domestic film quality and promote the film industry. Although housed under the Ministry of Culture, Sports and Tourism, it operates independently to manage the Motion Picture Development Fund.

With this fund, KOFIC develops policies and helps finance the country’s film industry across the board: surveys, research, education and training, production, infrastructure and technology expansion, export and overseas expansion, and even tracking cinema admissions and archiving films.

The fund has historically been a mix of government injections and a 3 percent levy on ticket sales. Although the Korean government abolished the levy to reduce ticket prices on top of significantly reducing its budget allocation to the film fund, KOFIC still managed over US$ 500 million in 2024.

Indonesia, in contrast, has it all mixed up. The country has had several film development institutions in place with no clear long-term objective. The now-defunct Bekraf once championed the Akatara program, an investor-filmmaker matchmaking forum, while the Creative Economy Ministry has only ever reported having “facilitated” or “helped expose” filmmakers to funding access.

Currently, there exists a Rp 6 trillion Cultural Endowment Fund managed by the Endowment Fund for Education Agency (LPDP). The fund, currently disbursed via Dana Indonesia Raya (previously Dana Indonesiana) under the Culture Ministry, is a culture-wide program and is capped at Rp 200 million per grantee for filmmakers. In other words, no dedicated endowment fund similar to KOFIC’s Motion Picture Development Fund currently exists.

Interestingly, the 2009 Film Law actually established an independent body akin, in principle, to KOFIC called the Indonesian Film Board (BPI). BPI is tasked with strengthening the foundation and advancing the film industry. It is formed and administered by industry representatives, and only “facilitated” by the government.

Article 69 of the 2009 Film Law gives BPI broad mandates to support film research and development, education and training, promotion, and financing; plus, to hold domestic and international festivals. But BPI isn’t equipped to carry out these mandates.

In fact, BPI’s own Head of the Public Policy Department, Rommy Fibri Hardiyanto, has written in Kompas.com lamenting the board’s lack of agency. He said that BPI doesn’t have the organizational design to do what it’s meant to do. It lacks a permanent organization, a sustainable funding source, and even the operational authority to function as the law mandates.

He urged that the ongoing revision to the 2009 Film Law learn from KOFIC’s model (he also mentioned France’s National Center for Cinema, or CNC) and consider rethinking BPI’s organizational model. It doesn’t need to be identical to KOFIC or CNC, but it should be an independent “film ecosystem manager.” It needs enough authority and funding to make decisions that sustain itself without being heavily influenced by regime change.

Giving BPI a larger operational mandate is imperative if we want a reliable governing body that can administer long-term programs, especially since it already sits independently outside any film policy-governing ministry. Meaning, future changes to the current ministry configuration won’t greatly affect the Board’s ability to continue supporting the industry.

The newly elected 2026–2030 BPI leadership echoed Rommy’s suggestion to start an Indonesian Film Endowment Fund. They suggested the fund could mirror South Korea’s initial model by sourcing funds from ticket-sales levies, noting that cinema tickets are currently taxed (PBJT), but the revenue flows to regional governments without a clear channel back to the industry. Rommy added that the fund could also be injected from the state budget, industry players’ and philanthropic contributions, and private investment.

Epilogue

It’s going to be a pity if Indonesia’s film industry continues to go to battle without sufficient State support. New titles and filmmakers keep emerging at international festivals, earning stellar reviews and promising futures. At home, domestic films continue to dominate the market, breaking admissions records when other countries are still struggling to recoup their pre-pandemic audience. All of this despite tepid government support and the absence of enabling policies.

Imagine the government finally waking up and seeing the industry’s importance. It’s not a pipe dream for our film industry to become the country’s thriving economic multiplier and a cultural powerhouse that marks our standing on the global stage. We’ve come a long way since film was seen as a threat to the nation, and it’s been a long time coming for Indonesia to prioritize film and invest in it so it can live up to its potential.

— Fin —

What are your thoughts on the state of Indonesia’s film industry? If you’re a passionate movie-goer like the author of this article, please leave your thoughts in the comment section below!

Correction: An earlier version of this article made a labelling error on the first graph, in which we incorrectly put “Indonesia” instead of “India”.

Credits:

Writer/Researcher: Nea Ningtyas

Editors: Clara Fong, Nathaniel Rayestu, Ravio Patra, Rayhan Kalevi

Visual Designer: Liana Tan

As Suahasil Nazara takes the helm as the next Finance Minister, the market, local governments, and international observers may not be expecting a grand financial visionary. They want a competent firefighter.

The root of the issue lies in the executive suite itself. The rapid sequence of appointments reveals an administration struggling to reconcile grand political promises with fiscal reality. Sri Mulyani Indrawati was ousted when her institutional discipline stood in the way of massive flagship mandates. Her successor, Purbaya Yudhi Sadewa, acted as the compliant enabler—stamping every political check, shifting targets, and eroding institutional trust to accommodate the Palace’s demands. Now, Suahasil Nazara inherits the wreckage.

Instead of bold speeches promising sweeping structural transformation, Suahasil’s success will depend on fiscal triage. Can he contain these five immediate blazes before they combine into a full-blown crisis—or will he, too, be consumed by the President’s unyielding spending appetite?

1. Revenue shortfall coupled with tax refund backlogs

The most immediate fire to tame is a revenue architecture that is currently bleeding cash. Until August 2026, tax revenue reached just Rp 1,409.1 trillion, a mere 59.8 percent of the annual APBN target. With four months left to collect the remaining 40.2 percent, the shortfall highlights targets set unrealistically high to finance ambitious spending and meet the political goals of the administration.

Compounding the problem is the controversial strategy of withholding tax refunds to artificially bolster revenue figures. As businesses complain of stalled cash flows, analysts warn that holding back refunds could trigger an actual tax shortfall of Rp 80 trillion to Rp 140 trillion. This could directly harm private sector liquidity and job creation.

Amid an economy already struggling, general tax hikes are simply out of the question. Suahasil must perform a tough balancing act: find innovative ways to raise revenue and improve our ever-dwindling tax-to-GDP ratio without further burdening a fragile economy. That means focusing on structural leaks: overhauling administrative collection mechanisms, expediting digital tax integration without technical friction, and setting future revenue targets rooted in economic reality rather than political fantasy.

2. Expensive flagship political programs

The second blaze sits at the intersection of political ambition and basic arithmetic. The Prabowo administration’s flagship social initiatives, most notably the Free Meal Program (MBG) and the Merah Putih Village Cooperatives (KDMP), carry massive price tags and immense political momentum.

While the policy goals are understandable, running them without fiscal discipline threatens to bleed the national budget dry. This is where Suahasil faces his ultimate test.

These presidential flagship programs require strict budgetary guardrails: phased rollouts, aggressive independent auditing, and precise geographic targeting to prevent waste. If a program runs over budget, the ministry must have the authority to pause, recalibrate, or scale back execution. Ideology must not break the bank.

3. Pandemic-era debt maturing amid higher borrowing costs

The third is a dangerous ticking time bomb: a massive “debt wall” reaching maturity. In 2026, government debt maturity hit a peak of Rp 833.96 trillion — the highest point in the current SBN repayment cycle — compounded by Rp 154.5 trillion in maturing central bank burden-sharing bonds from the pandemic era.

Debt service interest alone is projected to swallow Rp 599.44 trillion, consuming more than 22 percent of total tax revenues. When combined with principal repayments, total debt obligations threaten to absorb nearly 45 percent of state revenue. Managing this mountain of debt in a global “higher-for-longer” interest rate environment leaves zero room for error. The challenge lies in executing this massive refinancing drive under the weight of global “higher-for-longer” interest rates. With market volatility elevated, every new bond issuance risks locking Indonesia into elevated borrowing costs for years to come.

Suahasil must execute a deliberate refinancing strategy. That involves careful secondary market management, active debt restructuring, and transparent communication with institutional investors. Restoring credibility is the single effective hedge against paying higher risk premiums. Bondholders need to know that the Ministry of Finance is once again run with steady, predictable discipline, unswayed by executive pressure to take on more expensive debt for short-term spending.

4. Friction between local governments over budget transfer cuts

Outside Jakarta, regional governments have struggled as central government transfers (TKD) have been severely slashed since President Prabowo took office in 2025.

These central funding cuts were effectively used to squeeze regional administrations in order to free up liquidity for top-down, centralized flagship initiatives. Essential local infrastructure halts, public service quality drops, and local administrations risk insolvency.

As the treasury, the Finance Minister cannot just drop the axe and walk away. Suahasil needs to balance central fiscal discipline with targeted regional support. This requires implementing conditional liquidity facilities for distressed municipalities while granting local governments broader, regulated space for local revenue autonomy. Slashing transfers without providing alternative survival mechanisms simply exports central fiscal stress to regional administrators and citizens alike.

5. Blurring of boundaries between the Treasury and the Central Bank

The final blaze to contain originated from a fundamental blurring of institutional boundaries. Under intense pressure to deliver quick wins for the administration, Purbaya’s Finance Ministry blurred the line between fiscal management and monetary intervention, notably by pouring vast sums from the accumulated cash balance (Dana SAL) directly into state-owned Himbara banks under the guise of injecting liquidity.

This was a misdiagnosed medicine for a non-existent illness. State banks were not facing a liquidity shortage; they were constrained by structural credit demand and macroeconomic risk. By treating state cash balances as a pseudo-monetary tool, the Finance Ministry crossed into central bank territory.

Suahasil must retreat from this policy overreach and return the Treasury to pure fiscal fundamentals. Crucially, he must repair working relationships with Bank Indonesia, establishing harmonious, coordinated policy channels rather than attempting unilateral liquidity engineering that unnerves financial markets.

Bringing back institutional trust

Ultimately, one of the most vital tasks awaiting Suahasil is restoring institutional trust. It’s an intangible asset severely damaged over a year of rapid ministerial churn and fiscal appeasement. Fiscal policy relies heavily on credibility, and credibility is built through measured, predictable, and prudent statements and actions.

Suahasil’s legacy will not be carved out by trying to please the Presidential Palace or by endorsing unchecked spending in the name of political harmony. It will depend entirely on whether he chooses to act as an unyielding fiscal anchor — willing to speak with discipline and say no when arithmetic demands it — and whether President Prabowo grants him the structural room to do so.

If the presidency continues to demand validation for an unsustainable agenda, even a third minister will not stop the bleed. The fires are raging, but Suahasil can only put them out if the President allows him to hold the hose.

In 2023, local governments across Indonesia suddenly became busy firefighting at dumpsites, costing taxpayers billions of rupiah to extinguish a fire at a single dumpsite.

The budget for this firefighting came from the region’s annual emergency fund, or from whatever was left of its waste management budget (already sparse, typically less than 1 percent of the region’s total budget) that should have been used instead to improve the waste management system. And the impact went way beyond these numbers in the accounting report, potentially causing prolonged health hazards for anyone caught in the smoke.

This year, we are on course for the second episode of that chaos again. As we started writing this in July 2026, the Tangerang Regency administration was busy extinguishing the fire at Jatiwaringin dumpsite (‘TPA’). Meanwhile, similar events are flaring up at other dumpsites (e.g., TPA Cipayung, ex-TPA Panembong).

Interestingly, dumpsite fire frenzy was never a topic before 2023. Today, it is emerging as a recurring theme.

The claim that the 2023 dumpsite fire frenzy is bound to recur is not without merit. This year, Indonesia is facing another El Niño cycle. It is a cyclical climate pattern (typically every 2-7 years) in which trade winds in the south shift, creating hotter temperatures, stronger winds, and lower humidity in Indonesia. These conditions are perfect enablers of dumpsite fires, as they make it easier for surface- and deep-level piles of waste to ignite.

As if the cycle itself is not enough, this year we might be facing a super El Niño, with current indicators showing that this year’s impact would be double that of 2023. Conditions are expected to worsen and peak at year-end. Therefore, strictly from a climate standpoint, dumpsite fires can only become more frequent and more intense as we approach the end of the year.

We understand that the way we have written this article so far suggests we are cursed with the uncontrollable wrath of nature. However, that is not the case.

Like any combustion process, landfill fires require (1) a trigger; (2) a condition; and (3) fuel. The trigger is the buried waste getting very hot and catching fire on its own. The condition is the environment created by El Niño. And the fuel is the methane trapped in the dumpsite piles. While the trigger and the condition are practically out of our control, the fuel is different. The presence of methane in a dumpsite is manageable and can be reduced to a significant extent.

Now, we should all ask the real question: do we want to optimize the budget to fix preventable methane emissions, or do we want to waste resources by splashing water into dumpsites every 2-7 years?

Bear in mind, the more frequent this phenomenon becomes due to inaction, the greater the unnecessary fiscal burden, the less effective the waste management system becomes, and the higher the cost to long-term public health, which can translate to declining productivity.

Why dumpsite fires are rampant in Indonesia

Here’s how fire started at a dumpsite:

Methane is a product of the anaerobic decomposition of easily degradable materials, including food waste, garden waste, and paper. At a dumpsite, this process takes place in the deeper layers of the waste pile. As a new layer of fresh waste enters the dumpsite each day, the older waste is buried deeper and deprived of oxygen, allowing anaerobic processes to take place. This process continues in a loop for years, allowing methane to build up in a dumpsite. Compounded by new waste arriving every day, this effect can be amplified by orders of magnitude.

In Indonesia’s dumpsites and waste management, this process happens at a massive scale and is messy for three different reasons.

First, food, garden, and paper waste make up more than half of the waste that ends up in dumpsites, according to the National Waste Management Information System (SIPSN); in major cities, most of it is left to rot, underscoring the scale of methane generation there.

Second, more than 300 of Indonesia’s 500 dumpsites operate under an open dumping system without a well-designed gas ventilation system, allowing methane to leak to the surface and easily ignite.

Third, waste entering landfills is mixed, so the gas is not pure methane but a complex mixture that can harm living beings exposed to it.

These nuances explain the pattern of dumpsite fires in Indonesia, which are massive, hard to extinguish, and toxic. Because easily degradable waste is the most dominant waste composition in Indonesia overall, dumpsite fires occur at many dumpsites across the country. As explained in the mechanics, this abundance, combined with widespread distribution and surface exposure under the open dumping system, allows fires to spread easily from one point to another.

Finally, burning highly contaminated methane (and other combustible waste) releases toxic fumes into the air, which, when carried by strong winds, expose nearby locals and can eventually cause at least acute respiratory issues.

From this breakdown, we can see that the root of the problem is easily degradable waste in the dumpsite, compounded by heavy reliance on open dumping systems, creating the massive hazard faced by communities. That said, to minimize the risk of dumpsite fires, we must ensure organic waste does not enter the dumpsite, and there are attainable pathways to do so.

Summoning the “gotong royong” spirit for waste management

For too long, we spent too much time pointing fingers when it comes to solving the waste crisis. The truth is, we cannot solve it unless communities, waste workers, private entities, the government, and CSOs work together.

Now that we have a critical, urgent common goal, we need to rethink how we manage organic waste. We have to shift away from our typical downstream-focused mindset and focus on the upstream.

1. Decentralization

Handling many tons of organic waste — likely to be mixed — at a centralized downstream facility is a suicide mission. Instead, we can decentralize waste treatment by leveraging the smallest possible community level to independently treat its organic waste upstream.

A proven example is the ‘Neglasari’ pilot project in Bandung, led by Yaksa Pelestari Bumi Berkelanjutan (YPBB), which integrates organic waste treatment (composting and the BSF method) with food production at the sub-district level.

This project embodies Indonesia’s “gotong royong” (hand-in-hand) spirit, where community, academia, CSO, waste workers, government, and donors collaborate to build and operate the system. In just 1 year, the project reduced its methane footprint, developed a financially viable treatment system, improved community resiliency, and created jobs (soon-to-be published report).

From a cost perspective, this approach is not merely a utopian dream of practitioners in the waste management field, but a far more cost-effective alternative to centralized, high-tech infrastructure (you can read more in detail on page 30 of the linked report). Moreover, by enabling a decentralized approach, we reduce the risk of cross-contamination and allow recyclables management to thrive as well. This adds value to the circular value chain.

2. Organic waste treatment as a part of the food system

The product of organic waste treatment was never meant to be the finished product. Instead, it should be connected to the larger conversation of the food system in the community. By connecting these dots, treating organic waste expands into the conversation of improving communities’ quality of life and is not limited to hazard prevention.

The Bandung City government has set an example by integrating two programs: ‘Buruan Sae’ (food security and urban farming program run by the city’s Food and Agriculture Agency) and ‘Gaslah’ (the city government’s program for upstream organic waste treatment). The city government spearheads this initiative, in collaboration with communities and CSOs, to drive the integration.

The idea is that households and communities in the Buruan Sae program can use treated organic waste (in the form of compost or BSF larvae) from the Gaslah program as input or feedstock for food production, ultimately creating a closed-loop food system. This shows that with the right political commitment, waste management can be productive while also addressing multiple urban challenges.

3. Treatment-as-a-service?

Ultimately, the goal is to ensure as little organic waste as possible goes into dumpsites. Even more importantly, profiting from sales of products from organic waste treatment (e.g., compost and BSF larvae) should not be endorsed as the main revenue source for a sustainable waste management practice. This framing matters because waste management is a cost-heavy sector that often requires subsidies and, therefore, government commitment to allocate budget to sustain operations.

It is telling that even with a basic collect-transport-and-dump method, the system often collapses due to a lack of available government funds. Let alone introducing a treatment solution with more associated costs.

The key to this reform’s success lies primarily with the government. To drive this systemic change, the provision of essential waste management services for collection and separation, especially in the form of fixed capital assets as the highest cost component, will be crucial (see pages 28-29 of the linked report).

Political will to resolve the challenge will show in the budget it commits to support setup and operations.

A race against time

Those three reform principles are set with an overarching output in mind. By shifting the mindset on where and how to treat organic waste, and how the financial model should run, we enable a solution that is rapid, replicable, low-tech, and cost-effective. These are the characteristics we need to address the methane challenge.

This ongoing crisis demands a fast, actionable solution with a low barrier to implementation. Moreover, methane is a short-lived climate pollutant, which means we don’t have the luxury of preparing a dandy plan; we are in a race against time every day to prevent more from being generated in dumpsites.

More methane is being generated as you finish reading this article, which means more of your tax is likely to be spent on throwing water on a pile of garbage. Is that something that you consent to?

Want to share your views on public policy reforms or other political issues?

Write to us: connect@thinkpolicy.id

It’s barely been a month since the devastating earthquake tore through East Nusa Tenggara (NTT), exposing Indonesia’s vulnerable emergency architecture. Yet here we are again, watching the sky painted in choking hues of orange and grey as the country battles forest fires across Sumatra and Kalimantan, while four active volcanoes — Mount Anak Krakatau, Mount Semeru, Mount Ili Lewotolok, and Mount Ibu — erupt and spew ash across Java and Nusa Tenggara.

While volcanic eruptions are natural geological events, forest fires are human-made catastrophes. Extreme weather shifts resulting from the cyclical climate phenomenon El Niño may have catalyzed the spread of these forest fires, but calling them “natural disasters” is lazy and absolves human actors of accountability.

The reality is that people in Kalimantan and Sumatra, even those in Malaysia and Singapore, now breathe hazardous air because the government failed to curb the spread of forest fires despite the crisis being entirely foreseeable.

As early as April, the Meteorology, Climatology, and Geophysics Agency (BMKG) issued a warning that this year’s El Niño would trigger severe dry spells, turning our dense forests and fragile peatlands into tinderboxes. BMKG’s climatologists even correctly predicted that forest fires would spread in Kalimantan around July and August. Yet, despite this research, the government failed to prepare, and the people paid for it.

The contested ‘local wisdom’ provision

The root cause of these fires has remained unchanged since 1997: the persistent, illegal use of fire by plantation companies (and others) for land clearing. Although the government regulates the practice, Article 69 Section 2 of Law No. 32/2009 on Environmental Protection and Management allows exemptions for indigenous communities, limited to two hectares per household and only if done to grow local plant varieties.

As environmental advocates have pointed out for years, massive palm oil and timber corporate entities have allegedly been involved in land clearing by burning that caused the forest fires.

Last month, Kompas overlaid a map of Kalimantan forest fire hotspots on a Kalimantan land concession map. The result shows that over 50 percent of fires happened on concession lands, such as oil palm plantations, mining, and logging.

A provision meant to protect traditional farmers has become a legal blanket enabling widespread environmental destruction. Decades of drainage and deforestation have turned Indonesia’s peatlands (gambut) into dry, underground fuse networks. On dry peat, a controlled fire on a two-hectare plot cannot be contained to its boundary. It seeps beneath the surface, spreading invisibly across miles and igniting uncontrollable blazes.

On 7 September 2026, after the haze spread uncontrollably, the government finally announced a Presidential Instruction prohibiting all forest land burning, including practices rooted in local wisdom.

Once again, the state’s response reveals a troubling pattern: reactive, disjointed, and reliant on last-minute notifications. Those affected by the burning forests had to wait weeks before the president said anything, while fires didn’t stop destroying their lands and haze polluted their air. The multiple volcanic eruptions show a similar pattern. Communities near these volcanic zones received warnings only when ash was already settling on their roofs.

Why are predictive systems, early-warning alerts, and quick disaster response consistently treated as an afterthought?

The oil palm companies… benefit?

However, the most surreal and damning indictment of this entire tragedy lies not on the ground, but on the trading floors of the stock exchange.

When the BP Deepwater Horizon oil spill occurred in 2010, BP’s stock crashed by over 50 percent within weeks. Investors fled because they anticipated the inevitable corporate accountability: aggressive state prosecution, billions in regulatory fines, and massive operational sanctions.

In Indonesia, the market behaves in the opposite way. As fires destroy thousands of hectares and smoke darkens the skies, the stock prices of major palm oil and agribusiness firms do not crash. They surge. Crude palm oil futures near record highs, and market valuations rise as investors anticipate constrained supply and higher commodity prices.

How can a corporate sector facing widespread environmental destruction see its equity rise? Because global and local investors have already priced in government impunity. The market understands a cynical truth: there will be no massive corporate fines, no revoking of major concessions, and no structural consequences.

This moral and institutional failure cannot continue. We cannot claim to be a modern state while relying on reactionary crisis management and outdated legal frameworks.

What the government must do

We call on the government to act decisively: (1) evaluate the land-clearing exemption and its enforcement; (2) hold corporate actors — including their beneficial owners — accountable; and (3) prioritize disaster response preparedness by taking early warnings seriously.

Law enforcement must aggressively target the beneficial owners of land concessions where hotspots emerge. Fines must be set at levels that hit balance sheets hard enough to alter corporate behavior, alongside real civil liability and concession cancellations.

The smoke will eventually clear, as it always does when the monsoon rains arrive. But until the state aligns its laws with ecological reality and proves to the market that environmental destruction carries a ruinous price tag, the fires will return year after year.

Our previous edition explored the music industry’s political economy, full of personal feuds, ideological splits, and fiery legislative hearings. All because of the government’s chaotic approach to music royalty distribution.

The piece makes it clear that the ongoing royalty debate is rooted in ownership. Who owns the right to a musical creation? Who gets to benefit from it? How do we make sure the economic gain reaches the rightful owner? Between the performers and composers — including some who now sit in the House of Representatives — it’s hard to really pick a side because both seem to have good arguments for their respective cases.

While we’re not done figuring that out, the ownership debate is about to get messier — or rather, it already has — as artificial intelligence (AI) enters the copyright battlefield.

Musicians, journalists, and other creators alike have raised concerns about how generative AI can produce writing, artwork, and even music in the blink of an eye. Whether these AI-generated works compare to those that went through the human process of trial and error (and frustration, as we experienced while writing this piece) is irrelevant. The concern isn’t simply that creators have to compete with AI in the creation process, but also about ownership of a creation and the economic value it brings, including in derivative form.

The main questions are deceptively simple, but more complicated once you go below the surface.

The first is on input. Can an AI company copy and process copyrighted work to train a model without permission from its original creators? Second is on output. When an AI model produces something new, at what point does that output reproduce or infringe on the work it learned from? Third is on authorship. If humans use AI to create something new, how much human contribution is needed before an AI-generated output can itself receive copyright protection?

Indonesia’s ongoing effort to revise Law No. 28/2014 on Copyright (‘Copyright Law’) grapples with all three questions at once. However, the most politically contentious question that we have been able to gauge so far concerns mostly the first problem: who gets to benefit economically when copyrighted work becomes an input into commercial AI systems? What started as an attempt by House lawmakers to fix music royalty governance has now shifted toward striking the right balance between protecting creators and publishers and keeping the development and legitimate use of AI technology from becoming prohibitively difficult.

We have heard it all. AI is dangerous. AI is changing the way we live. AI is reshaping our societies. And most fundamentally: AI is taking jobs away from humans. But while these worries are not unfounded, we believe a key debate is missing: how the ethical and financial concerns around AI translate into specific, enforceable rights, duties, prohibitions, and remedies for humans and our societies. Refusing to do so may not serve our interests. Remember the pushback against the World Wide Web at the turn of the millennium? Yeah… that didn’t exactly work in our favor now, did it?

In this edition of The Reformist, we attempt to shed light on these dilemmas. Can AI use copyrighted works freely without disrupting the economic rights of creative work, including journalistic outputs? If AI companies must pay to use copyrighted work, what distribution model is most appropriate? How do we define AI’s fair use, and what lessons can lawmakers take from other countries on how to govern it?

Let’s get right to it. Into the unknown!

I. Economic rights in the AI age

The proposed revision of the Copyright Law has drawn attention to how the government will begin regulating AI use. With AI-generated content flooding the internet, musicians and legal experts have also called for additional safeguards to protect the economic rights of creative works from AI’s alleged illicit use.

This is where things get blurrier, as AI legislation, even across the globe, is new, uncharted territory that lawmakers everywhere are still improvising their way through.

Journalists have become an outspoken, influential force in the bill’s discussion. The Press Council has called for lawmakers to make AI companies pay royalties for training their AI models on journalistic work.

The catch is that journalistic work does not currently sit outside the Copyright Law altogether, which is the case for ‘written works’ and ‘photography’ (Article 40). But the law doesn’t construct a distinct economic right for journalistic work to have its own category when used to generate output by AI models.

This matters because the revision should not end with granting journalists copyright. It’s about defining more clearly what counts as a journalistic work and which economic rights media companies may hold or exercise. Most importantly, it’s also about when AI platforms must obtain permission and/or pay royalties.

Other countries have begun experimenting with royalty licenses that let AI companies legally use copyrighted work, albeit more in the music industry than in journalism. STIM, Sweden’s largest music organization, for example, launched the first AI royalty license last year to combat the surge of AI-generated music in the country.

Interestingly, it isn’t a blanket license.

STIM negotiates it with each AI company, splits it into separate layers for training and generation, and requires a new license every time a model is retrained. AI companies must use a STIM-approved attribution provider that traces which recordings and compositions influenced any AI-generated output and reports that back to STIM. Companies must ensure third-party payments for generated music are collected and passed through, and commit that AI output won’t erode the royalty pool that pays conventional musicians.

AI-generated music is also barred from entering Sweden’s music charts, creating a clear distinction between what is and isn’t AI content. In January, this ruling came into effect when the Swedish song “I Know, You’re Not Mine” (Jag vet, du är inte min), with millions of streams, was erased from Sweden’s top 50 songs after it was revealed that the song was wholly AI-generated by a group of Danish AI engineers working under the pseudonym ‘Jacub’.

Perhaps more interesting, Indonesia already has a similar ministerial regulation. Under Law and Human Rights Ministerial Regulation No. 15/2024, book publishers can receive royalty payments when AI models are trained using their work.

While there is no record of this regulation’s effectiveness, national legislators could use this sectoral ruling as a starting point to develop AI regulations at a larger scale.

II. In search of a fair compensation model

Scaling this regulation appears to be the government’s interest. The most recent versions of the bill (not officially released to the public) show that journalists are finally on track to receive the compensation they have demanded for years. In July, Law Minister Supratman Andi Agtas reinforced this sentiment, claiming that “journalistic work is one form of copyright that must be protected.”

Now that journalists’ demand is acknowledged, a more nuanced question has surfaced: how should they be compensated?

From the publicly available October version of the bill, it appears a centralized collections model will prevail, using the same model used for music royalties, in which right holders would join a Collective Management Organization (CMO) to negotiate, collect, and redistribute them.

But as we discussed in our previous edition, this model hasn’t proven to be the most effective or efficient. Music composers have felt disenfranchised by the opaqueness of a centralized distribution model, instead calling for larger provisions for a direct licensing model that would guarantee greater economic compensation.

Horror stories from the music world seem to have spread among journalists and other parties affected by the Law’s revision.

While a centralized model is practical and, in theory, more redistributive —allowing even small news publishers to receive compensation — both journalistic advocacy groups and tech platforms affected by the Law’s revision have publicly opposed a sole centralized mechanism.

The Alliance for Independent Journalists (AJI) and the Indonesian Digital Media Association (AMSI) have called for a hybrid model that blends centralized collection with the freedom to license their work directly.

It is perhaps an odd position for publishers to hold since a centralized system is the version of the bill that at least guarantees everyone something. But AJI and AMSI’s calculus is that the biggest platforms, the ones capable of paying real money for real traffic, are exactly the ones with the leverage to negotiate directly, and a mandatory CMO risks capping what those negotiations could otherwise yield — especially in the age of AI, where digital traffic for news has reportedly dropped by as much as 70 percent.

Then again, this is an existential debate over whether journalistic work is considered public or private goods, but that is a debate for another day.

On the other side of the lobby is Google. In June, the tech giant released a statement opposing the bill, arguing it would force platforms to depend on a centralized, government-linked institution rather than the direct commercial partnerships it already runs. That objection resurfaced a month later, when Google representatives met with Deputy Communications and Digital Minister Nezar Patria, reportedly pushing for the bill to explicitly preserve business-to-business licensing as an option that can run alongside, not just underneath, the centralized system.

Google’s objection therefore seems more about the government monopolizing compensation terms than the compensation itself. A mandatory collective mechanism would shift bargaining power away from tech platforms and media companies, forcing them to go with the common licensing architecture the government has set. Preserving business-to-business (B2B) licensing, by contrast, allows both media companies and tech platforms to negotiate prices and terms directly.

No lawmaker has — at least not publicly — argued that tech companies shouldn’t pay their dues. The devil, as they say, is in the details. Who will come out the victor in the tug-of-war between centralized and decentralized royalty regimes?

But making AI companies pay shouldn’t be conflated with regulating the growing AI industry. The question is — also posed by journalists — what can AI companies use for free before any compensation obligation applies?

III. The fair-use debate

Indonesia’s Copyright Law does not explicitly use the term ‘fair use’. Instead, it lists specific limitations and exemptions that determine when copyrighted material may be used without permission. This sounds somewhat similar, but it’s not.

Articles 43 and 44 of the law cover the requirements to give ‘attribution’ for the use of current news for the specific purposes of education, research, academic activity, news reporting, archiving, preservation, and more. But giving attribution does not make copying lawful. Depending on which limitations and exemptions are being cited, what matters most is whether the use of copyrighted work prejudices the reasonable interests of its original creator and rights holder.

Because the law was written before generative AI existed, it raises difficult questions about AI training. Whether training AI models constitutes “research” or another form of “fair use” is the crux of the debate among lawmakers and the many parties with an interest in this matter.

In the the current publicly available draft of the bill (October 2025), ‘penggunaan wajar’ or ‘fair use’ is now explicitly defined as “the use of a work without prior permission from the copyright holder, provided that such use does not harm the reasonable interests of the creator or copyright Holder, and serves purposes of education, research, criticism or review, news reporting, parody, or other non-commercial purposes consistent with the principle of fairness.”

It certainly reads more as a copy of the previous version, now with a new name stamped onto it. But this is not just a textual change. Where the House goes from here will shift the architecture of Indonesia’s copyright regime quite significantly.

Article 59 states that “training material for Artificial Intelligence models shall be subject to the provisions on fair use or to an agreed license,” meaning that the bill would allow interpretations that AI’s use of copyrighted works can be considered fair use to an extent. But if the bill doesn’t define the limitations well, we’re pretty sure this provision will be a culprit in many future royalty disputes.

“Why?” you may ask. Well, for one, the chronic royalty dispute between music composers and performers is a strong indication. To be blunt, if the government has yet to figure out a way to regulate royalty payments in the music industry, which is complex but nowhere near as unpredictable and ‘unknowable’ as AI, how can we be sure that they’re actually looking at this from the best vantage point?

During a working session in December 2025, the House’s Legislation Body (Baleg) was still arguing over how to define “fair use” in the revised bill. Prosperous Justice Party (PKS) and Baleg member Ledia Hanifa Amaliah pointed to the central debate over whether the bill wants to approach fair use as an ‘exemption’ norm — which is how Articles 43 and 44 of the current law are written — or as a ‘positive’ norm — which is more akin to the American legal doctrine of fair use.

While Ledia mentioned that the bill’s proponents lean towards writing fair use using the positive approach, Indonesian Democratic Party of Struggle (PDI-P) lawmaker Once Mekel, a proponent of this bill, initially to reform music royalty, suggested that fair use should clearly define the limitations of what is considered ‘non-commercial’, such as education, research, voicing criticism, and reasonable quotation.

What Once described is more similar to the way it is currently governed, in a form of ‘limitations and exceptions’, as governed in international copyright regimes such as the Berne Convention and the TRIPS Agreement. This contradiction signals confusion among the lawmakers themselves.

Another takeaway from this discourse is that if AI training were classified as fair use, companies would have no legal incentive to negotiate a license with copyright holders. We’re no psychic, but rushing the bill feels like it will guarantee a future full of disputes between journalists, media, and tech platforms — the same way composers, performers, and event organizers have been for decades.

The global search for legal precedent

In the US, the battle over fair use has been divisive, with crucial lessons for Indonesian lawmakers. It offers a useful comparison because even in the US, where the copyright debate between AI platforms and copyright owners has already materialized into legal disputes, much remains to be determined. US copyright law applies what it calls the ‘four-factor’ fair use test, and several recent cases have begun asking how it applies in AI training.

Two particular cases in 2025 from the US Court for the Northern District of California resulted in victories for AI platforms on the ground that the use of copyrighted work is considered “transformative”, meaning that it doesn’t serve as a substitute for the original work it was trained on, but neither established a general rule that training generative AI on copyrighted work is always fair use.

We saw this reasoning applied in Bartz v Anthropic in June 2025, where Anthropic’s use of copyrighted books to train its AI platform Claude was found to be fair use because the output was “spectacularly” different from the source material. The court reasoned that “everyone reads texts, too, then writes new texts,” an act that a copyright holder cannot prohibit other parties from doing. However, Anthropic settled, paying US$3,000 to 482,000 authors — a total of US$ 1.5 billion, the largest copyright recovery in history, according to the plaintiffs’ lawyer — because it used pirated copies of those books to train its AI.

But that ruling did not set a singular precedent. In Kadrey V Meta, decided by the same district court that same month, the presiding judge dissected the same fair-use question. It ultimately sided with Meta because the authors sued the tech company without building their case on what the judge considered to be a stronger argument: sufficient evidence that training on their books could let Meta’s AI flood the market with new competing titles, potentially crowding out the human authors whose work made that flood possible.

This is because fair use can only be attributed to activities that do not harm a copyrighted work’s economic and market value, and the court made it clear that damage doesn’t require the AI to copy a book, only to out-compete it. For example, if an AI model has impacted a book’s overall sales and a plaintiff can prove a direct link, the court could rule against AI companies for violating fair use principles.

Closer to home, Singapore took a more explicit statutory route before the AI boom, having amended its Copyright Act in 2021 to introduce a computational data analysis exception, which allows the use of legally obtained copyrighted works for text and data mining as well as machine-learning training.

The unprecedented rise of the AI industry then led the Singaporean government to consider whether its updated regulations were sufficient to safeguard the country’s intellectual property. On 26 August 2026, the Singaporean Law Ministry stuck with its initial judgment. They announced that any legally obtained work used for AI training is considered fair use. A big legal win for the tech industry, but a gut-wrenching blow for creatives. However, it is also a good sign that Singaporean lawmakers are treating the issue as worth revisiting as the context evolves.

In contrast, the European Union (EU) has built a far more stringent AI regime. Under the EU AI Act, enacted in 2024, the region has opted for a transparency-based regime rather than restricting AI-created content. The Act contains an impressively large list of regulations for such a nascent industry.

First, providers of general-purpose AI models must adopt and publish a policy for complying with EU copyright laws — comprising 13 directives and 2 regulations — and commit to identifying and respecting any rights reservation a creator has attached to their work. This means a copyright holder can withdraw their work from AI training if they wish (‘opt-out’), which is interesting to us as it gives the right holders the agency to make their own decision.

Second, AI companies must prepare and publish a sufficiently detailed summary of what they trained their models on, using a template the EU’s AI Office provides. Third, under a transparency rule, providers must mark AI-generated content — text, images, audio, video — in a way that’s machine-readable and detectable as artificially generated.

It’s worth being precise about where these rules actually sit, because the AI Act didn’t invent Europe’s approach to AI training and copyright. The “opt-out” standard, which lets a rights holder withdraw their work from being used as training data, comes from the EU’s 2019 Copyright Directive, which already carved out an exception allowing text and data mining unless a rights holder explicitly reserves their rights against it.

The regulation’s effectiveness is evident today. In early August, Anthropic, the company behind Claude, released a press release stating that any content generated by Claude’s AI model — text, images, videos — will be watermarked in response to the EU’s Code of Practice on Transparency of AI-Generated Content. Anthropic announced that it will implement this directive worldwide, not just for EU users.

IV. Where does Indonesia go from here?

Indonesian lawmakers have plenty of external regulations to benchmark against as they decide what kind of AI fair use regime to implement. As we’ve established, however, the question is a lot more complex than whether the government is pro-AI company or pro-creators.

One option would be to place the burden primarily on AI platforms. Require them to obtain permission from copyright holders for every instance their work is used to train AI models. This would give copyright holders control over how their work is used, but at a price tag that could stifle AI advancement and innovation.

Another option could be to look at the EU: allow certain cases by default, but give copyright holders a legally enforceable opt-out mechanism to retract their work from training models. This lowers the initial cost for AI companies, which should, in theory, incentivize more innovation, but in practice it may be more complex, requiring multiple legal frameworks rather than one.

The other option would resemble Singapore’s broader exception regime, in which the starting point is lawful access rather than individual permission. Combine this, say, with collective or sectoral licensing — such as Sweden’s STIM experiment — but individual negotiation would effectively be impractical.

If you take only one thing away from these examples elsewhere, we hope it’s that this entire AI–human copyright debacle is far more complex than simply collecting payments by default for every instance where copyrighted work is used in training AI models.

AI is a growing industry, and we likely don’t yet know its full extent. As such, it requires an adaptive legal and policy framework that can adjust as needed. Any new legal changes introduced in the upcoming revision of the Copyright Law must take this into account. After all, we know how tedious the legislation process can be in Indonesia, and while the momentum is here, let’s make sure we actually get this right. Otherwise, we’ll end up playing catch-up, revising the law every time AI technology hits a new milestone and throws us another curveball.

If you are a journalist, musician, writer, or artist, we would like to hear what your take is: Where do you stand on AI’s use of copyrighted creative works? Drop in the comments below!

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We all remember ‘musyawarah’ (deliberation) from our civic education (‘PPKn’) class in elementary school. It is the embodiment of Pancasila’s fourth principle: democracy guided by the wisdom of deliberating representatives. It was not hard to believe, at least for me, because I’ve seen it everywhere.

I remember seeing it last month at the dining table of a friend’s family, deliberating on every familial issue — from Eid celebration menu to inheritance distribution — until they reached a consensus. A few nights ago, I saw it again on the way home from work: a group of men sitting in a circle inside a security post in a Central Jakarta neighborhood, deliberating on the reparation process of a local water channel.

I am pretty sure that you would see a similar picture in every other neighborhood across the archipelago: different elements of society finding consensus under different circumstances.

Musyawarah is indeed the beating heart of Indonesia’s democracy. But if deliberation is innate to Indonesia’s culture, making collective decisions every day in different layers of society, why does it feel distant, like it is missing from formal policymaking processes?

Regular citizens should be involved at the beginning of a policymaking process. But what often happens instead is that the public is deliberately (pun intended) involved at the end of the process. The public is thus not considered the ‘subject’ of a public policy creation – despite being right there in the name – but rather the ‘object’ of it. They only need to be ‘informed’ that a policy decision has been made.

Well, it’s no wonder that in the past few years alone, Indonesia saw constant public demonstrations protesting various policies affecting regular people’s lives, from the increase of value-added tax (VAT, or ‘PPN’) to costly flagship programs (infamously, the free meal program and Kopdes) that led to budget cuts in other essential sectors. The public is directly affected by these policies, but they are never involved in the deliberations!

So how can we bring deliberation back into our formal policymaking process?

A failing aspirational model

Before answering that question, it’s critical that we first look at the problem. Let me argue about this irony: I believe that the cause of the missing deliberation processes lies in the example I’ve observed before: we are too ‘reliant’ on our representation at the deliberation table. We let other people, our representatives, do the discussion for us. Well, but isn’t that the very essence of representative democracy? Hear me out.

Typically, local deliberations are limited to a specific group of people: mostly men (older men) who hold positions in the community (they are either the neighborhood head or their confidants). We trust them in making decisions about our neighborhood. This habit of ‘entrusting’ deliberation to select groups of people eventually carries over to the formal level of public policymaking.

This irony is reflected in Indonesia’s multi-stakeholder consultation forum for development planning (‘Musrenbang’). Musrenbang is, aspirationally, what citizen participation in a democracy should look like: through this forum, citizens can participate in policy formulation at the city or regency level. It comes in a tiered system, starting at the neighborhood unit (RW) level, then the village, district, and finally the city/regency level.

However, various research indicates inconsistencies in citizens’ participation and deliberation through musrenbang. A 2021 paper from the Australian National University found that although most of these forums were able to consolidate development plans from the village up to the national level, musrenbang is typically only attended by a handful of people, usually local elites, such as the village heads, or people who have been handpicked by these local elites.

Another study, conducted in Bandung in 2022, also found several systemic injustices in the implementation of musrenbang: from the dominant role of local elites and overly ceremonial, lengthy agendas to citizens being unable to propose their own agendas, instead having to consider only the policy options already provided by the government.

So, if the aspirational model our democracy adopted has somewhat failed to provide avenues for public participation in policymaking, what can we do?

Let’s reimagine how other forms of musyawarah can be implemented so regular Indonesians can actively participate in policymaking.

Introducing: Citizens’ assembly

If any local government wants to experiment, it can adopt a different approach: the citizens’ assembly. It does not have to replace musrenbang; it can complement it.

A citizens’ assembly, or a mini-public, is a deliberative and representative approach to policymaking. A group of citizens is randomly selected to join the assembly, where they will deliberate on a specific policy dilemma posed by the government. Harris (2019) argued that a citizen’s assembly (or a mini public) is a blend of participatory and deliberative democracy. It allows citizens to engage more directly in policymaking, from agenda-setting and decision-making to policy implementation.

In the 2023 De Gruyter Handbook of Citizens’ Assemblies, there are three main principles of a citizens’ assembly: deliberative, representative, and public influence. Deliberative means the assembly prioritizes discussion and deliberation among citizens. Representative means it ensures every part of the public is appropriately represented. Public influence means the assembly’s results should be action-oriented and could impact the public.

Although they seem similar, a citizens’ assembly and a musrenbang differ in three fundamental ways.

First (and most exciting) is how participants are selected. Unlike musrenbang, whose participants are open to the public but often filled by local elites, a citizens’ assembly employs a ‘sortition’ method to select its participants – it’s like a lottery, similar to how juries are selected for jury duty. The composition of participants for each assembly is determined to reflect the real conditions under which the assembly takes place, ensuring proportional representation; this process is missing in musrenbang, where intentional participant selection is undetermined.

Assembly member recruitment can take various forms. Some citizens’ assemblies use sortition based on government citizen records. Others use stratified random sampling. Some assemblies also let people self-nominate to join the possible assembly before being selected.

To further ensure inclusion, some assemblies also intentionally invite marginalized groups. The key feature of this randomized selection is to ensure proportionality and include ordinary people in policymaking processes.

Second (and probably the most fundamental) is our role as citizens. Instead of confirming or providing feedback on predetermined policies, in a citizens’ assembly our role is to address a policy dilemma the government faces. This way, participants can bring their own agenda — things that actually matter to them — into consideration when formulating policy.

Third, another core feature of a citizens’ assembly is the information-gathering phase. Before deliberating on the policy dilemma, assembly members can learn and unlearn about the issue from academic experts, stakeholders, or even witnesses. This information-gathering and learning phase helps assembly members better understand the policy trade-offs of each decision they will make.

All three features mentioned above position mini public or citizens’ assembly as a better way to involve the public in policy processes. In addition, best practices already exist worldwide, with governments implementing citizens’ assemblies at the local and national levels.

Where it has been done

Recently, a citizens’ assembly was held in Kerewan, The Gambia, to address an interconnected policrisis of environmental degradation that threatens their agricultural livelihoods and food security. Assembly members were selected through a sortition method that included a raffle, door-to-door visits in six villages, and open-source software, selecting 30 Kerewan citizens.

For seven days, these 30 assembly members gathered to deliberate and answer a question: how can they restore their lands and natural habitats while creating better livelihoods and economic empowerment? They mapped out problems faced in their respective villages and deliberated on what went into their recommendations. They then delivered their recommendations to the district governor, deputy governor, and a member of the national assembly.

In 2004, citizens of British Columbia, Canada, held an assembly to discuss their elections. Selecting 158 assembly members from a pool of 15,000 invited from across Canada, the assembly ran for around 10 months. The assembly also created space for First Nations citizens by adding two representatives. During the learning phase, guided by subject-matter experts — including political scientists from the University of British Columbia — assembly members developed shared values before moving to the public hearing phase and deliberating.

The assembly resulted in a change to the voting system in the province of British Columbia, giving the public a chance to decide the electoral system without intervention from political parties and ensuring the players are not in charge of setting the rules of the game.

Citizens’ assembly isn’t that groundbreaking, actually

However ‘radical’ a citizens’ assembly may sound, it is actually not. This policymaking method is not inherently groundbreaking. It is already rooted in our culture of deliberation. Indonesians have also been fond of representation – just that this time, we determined it through a lottery to ensure fairer representation.

This approach is also more politically beneficial for the government, as it can lend legitimacy to the policies it wishes to create. This is useful especially if they are about to enact an unpopular policy. Instead of having to bear the burden of the policy, the government can let its citizens decide on their own. If the result of the assembly is in line with the initial unpopular proposal, it will be an act of endorsement from the people. If the result is different from the initial proposal, the government will have one that is formulated by the public already.

Let’s imagine another real-life case as an example for a possible citizens’ assembly in Indonesia.

For the Jakarta provincial government, a possible assembly question would be about implementing an increase in Transjakarta fares. Since its creation in 2004, the government has kept Transjakarta fares at Rp 3,500 for more than twenty years. However, with rising fuel prices and the addition of new routes, the question arises: should the Jakarta government increase Transjakarta fares?

To assemble the minipublic, Jakarta can issue an open invitation for people to register for the lottery to be randomly selected to participate in the assembly. Alternatively, it can use available data from the Population and Civil Registry Agency to invite citizens to become an assembly members. They can assemble up to 100 citizens for the assembly, proportionally representing the six administrative cities of the province (including Kepulauan Seribu), age distribution, and gender.

Because we understand that a trade-off in increasing the Transjakarta fare is its implications to citizens’ economic condition, representatives from the Jaringan Rakyat Miskin Kota — a civil society network prominent for advocating for the city’s poor population — can be invited to be the speaker for the learning phase, in addition to the City planning experts, the Regional Planning Agency (Bappeda Jakarta), the Jakarta Transportation Agency, and PT Transjakarta. The learning phase is important because the assembly must understand what are the impacts of increasing and not increasing the fare, and what are the examples–including from abroad, if any–that Jakarta can learn from.

The result of the assembly might not be a simple yes–or–no answer. In fact, it should not be a simple answer. The assembly must be able to provide answers to questions pertaining to how to best approach the dilemma of to increase or not to increase the enduring Transjakarta fare. For example, who will bear the fiscal burden, if the fare is not increased? How would it work, should the fare be increased? Will the government give a special treatment to a certain group of demographics? How will it affect the development of new busways?

At the end of the day, Indonesia is a nation used to aligning our individuality with collective interest. Unfortunately, the elitist policymaking process is undermining this culture. This article is not only a reflection on our nation’s culture but also a call to action for the government: are you ready to truly involve citizens in the policymaking process? Deliberation is indeed lengthy, but by the time we reach common ground, it will all be worth it.

Want to share your views on public policy reforms or other political issues?

Write to us: connect@thinkpolicy.id

On 27 August, demonstrators led by the Aliansi Masyarakat Pati Bersatu, alongside other organizations, took to the streets with a single demand: pass the asset forfeiture bill. The public’s frustration about it is understandable – the bill has been in parliamentary limbo for almost two decades. Its first draft dates back to 2008 and has been on and off each year’s national legislation program (Prolegnas) since then.

At the meeting with protesters, House of Representatives (DPR) Deputy Speaker Sufmi Dasco Ahmad promised the bill would pass by December, even raising the stakes by saying he would resign if it doesn’t.

Is this a cause for celebration?

To regular Indonesians watching an endless parade of high-profile graft trials, the logic behind the bill seems straightforward: if someone steals from the public fund, the state must seize their loot and return it. The people’s ideal punishment for graft offenders is not just temporary incarceration, but also total financial destitution.

But in today’s Indonesia, the math of corruption infamously favors the offender. A corrupt official sentenced to five years in prison often serves only three after remissions and early parole. If that person has shielded tens or hundreds of billions of rupiah in hidden wealth, their prison stay becomes little more than a temporary occupational hazard. That money can buy comfortable cell upgrades inside. Outside, vast fortunes await their release.

Even worse, the country’s legal framework has repeatedly allowed former graft convicts to run for public office again. Once they win their seats, they step right back into the corridors of power they previously abused.

The asset forfeiture bill promises to break this cycle by introducing a mechanism known as non-conviction-based asset forfeiture. This mechanism allows the state to move against an individual’s ill-gotten wealth without first securing a criminal conviction. Instead, a separate civil proceeding tries the property itself (in rem), not the offender. This court evaluates whether an individual’s assets were acquired through legal and legitimate means. If a suspect flees the country, dies before trial, remains a fugitive, or avoids criminal conviction on technicalities, the state can still confiscate their unexplained wealth through a reversed burden of proof.

Yet, while the moral impulse driving this bill is indisputable, implementing it within Indonesia’s current judicial landscape presents a dangerous double-edged sword. We at The Reformist caution that an uncritical rush to enact this law without robust safeguards risks handing an already flawed state apparatus an unprecedented weapon for political repression.

The existing toolkit and current judicial realities

First, it is important to dismantle the myth that Indonesian law enforcement is currently powerless to seize criminal assets. Existing statutes — specifically the Anti-Corruption Law (UU Tipikor) and the Anti-Money Laundering Law (UU TPPU) — already grant prosecutors extensive powers to confiscate assets, levy restitution orders, and seize property linked to corruption convictions.

Consider high-profile cases (e.g., Harvey Moeis, Surya Darmadi) where prosecutors successfully sought multi-hundred-billion-rupiah fines and restitution payments alongside prison sentences. The legal mechanisms to strip convicted embezzlers of their ill-gotten gains exist and have been executed. The core bottleneck in asset recovery today is not a complete absence of statutory authority, but rather selective enforcement, weak investigative tracing, and political unwillingness to pursue financial flows to their ultimate destinations.

Second, and far more critically, anti-corruption enforcement in Indonesia does not occur in a pristine, neutral vacuum. Indonesia’s law enforcement apparatus remains deeply politicized, characterized by selective prosecutions, vague legal articles, and weaponized investigations. The Reformist has extensively documented glaring irregularities and dubious legal logic in recent high-stakes graft cases, in which political opposition, inconvenient ministers, and independent actors are targeted under elastic interpretations of “state financial losses”.

The best part is, this bill does not limit itself to assets linked to corruption or illicit enrichment, but assets tied to any ‘criminal’ activity. This means theoretically, the police could seize your car for the crime of running a red light. It’s an exaggeration, of course, but not theoretically improbable.

In a judicial ecosystem where law enforcement can be weaponized against political rivals, the asset forfeiture bill introduces a terrifying potential for abuse.

Imagine a scenario where an administration seeks to neutralize a prominent political adversary or an independent civic leader. Under standard criminal law, the state must meet a high burden of proof to secure a conviction. But under a broad asset forfeiture regime, the government could launch a criminal investigation while freezing or confiscating the target’s bank accounts, business holdings, and personal property in a parallel civil asset court.

By shifting the burden onto the individual to prove the absolute legality of every asset they own, the state forces targets to fight for their innocence on two complex, costly fronts simultaneously. Deprived of their financial assets overnight, targeted individuals are effectively stripped of the resources necessary to mount a proper legal defense, destroying their businesses, reputations, and political viability long before a single criminal verdict is reached.

The bill must be accompanied by airtight safeguards

We all despise corruption, and we recognize the urgent need to make graft economically unviable. However, we must ensure that the tools designed to eradicate corruption do not become the very instruments used to dismantle democracy and silence dissent.

If the House of Representatives (DPR) is to pass the asset forfeiture bill, it must conduct the deliberation process with absolute public transparency, not rush it through midnight legislative sessions behind closed doors. The House must also make its latest draft publicly accessible. Anti-corruption advocacy groups, while supporting the bill’s passage for years, have said the latest draft they obtained is missing key provisions.

To prevent abuse, the legislative framework must embed robust procedural safeguards into every stage of the forfeiture process. Prosecutors must meet a high evidentiary threshold, requiring clear, verifiable predicate evidence of illegal activity rather than mere suspicion or anonymous tips, before freezing any property. The court must operate with strict judicial independence and mandatory timelines to prevent political actors from indefinitely tying up an opponent’s resources. It must also mandate immediate, full financial compensation and public exoneration whenever the state fails to prove its case.

The fight against corruption requires courage and potent legal tools, but above all, it requires unwavering adherence to the rule of law. A tool designed to restore justice must never be crafted in a way that allows authority to abuse it.

Is it possible to talk about the Free Meal Program (MBG) without talking about the President himself?

Nearly impossible, as the program was a centerpiece of his presidential campaign and he hasn’t stopped boasting about it since his inauguration. Unfortunately, critics are often dismissed, regardless of their substance or relevance — labeled as people who “do not like seeing the country (or the President?) succeed” with accusations of being “foreign stooges”.

So, it may have become harder to separate criticism of the program from criticism of Prabowo himself.

But, should we really give it a try?

Last year’s most-read piece in our Opinion column, “How MBG rolled back everything good about Indonesia’s past free meal programs” by Ravio Patra (in case you missed it), got us thinking: “Can we evaluate MBG separately from its political baggage and focus on it as a policy: its program design, implementation, and impact?”

That is the question behind Second Thoughts, a new video series by The Reformist. In each episode, we invite you to take a second to activate our slow-thinking caps and rethink what we thought we knew about something.

For our inaugural episode: MBG.

Enjoy the first episode, and please let us know what you think about this new format by replying to this email or commenting below!

Best regards,

The Reformist Desk

An earthquake of magnitude 7.7 hit Flores in East Nusa Tenggara (NTT) last week. Thousands of aftershocks followed, along with tsunami warnings. Houses destroyed. Hospital ceilings collapsed. Roads disappeared under landslides. At least 75 people died across Manggarai, Nagekeo, and the rest of NTT.

Over 27,000 families were displaced from their homes — gathered under plastic tarps in swamped local emergency centers — as officials arrived with supply drops and the usual promises of rapid reconstruction.

None of this was unpredictable. Indonesia is a disaster-prone country. We have seen the country endure countless disasters: floods, landslides, earthquakes, tsunamis, and forest fires. Yet, the same scenarios played out one disaster after another. Government responses often stop at delivering aid and photo-ops. They seldom reach real steps toward disaster resilience.

After last year’s devastating Sumatra floods, the government has talked of upgraded early-warning systems, enforced building codes, and fortified regional response budgets. Yet, almost a year on, thousands of people in Sumatra still live in temporary shelters, waiting on aid that never arrived, sitting next to infrastructure that never got rebuilt.

If the Sumatra flood was supposed to be the moment the state finally learned something about preparedness and resilience, the NTT earthquake proves it didn’t. It just waited for the cameras to point somewhere else – until the next disaster happens.

Indonesia sits on the Pacific Ring of Fire, wedged against active fault lines like the Flores Back-Arc Thrust, where tectonic activity happened and caused the latest earthquake. So an earthquake in our archipelago is no mystery. And yet the state seems to treat every earthquake as a shock nobody could have anticipated, as though our geography changed overnight.

National Disaster Mitigation Agency (BNPB) acting spokesperson Berton Panjaitan admitted to the press that the agency struggled to deliver aid to affected areas because of Flores’ difficult geography and landslide-destroyed road conditions. In some villages in Manggarai, for example, journalists reporting from the field observed no BNPB-branded orange tents in emergency camps, forcing displaced people to erect makeshift tents from bamboo and tarps.

Underneath these seemingly “acceptable” difficulties is a structural issue. This year, BNPB underwent a massive budget cut, from Rp 2.01 trillion in 2025 to Rp 491 billion in the 2026 state budget. In fact, the agency’s budget has decreased every year since 2021. Crazy to think that a disaster-prone country keeps cutting costs for disaster mitigation. Yes, Finance Minister Purbaya Yudhi Sadewa has reassured that the government has put aside Rp 5 trillion emergency disaster relief fund from the state budget, ready to use and can even be topped up when requested. But without transparent and consistent criteria, national sign-off to access urgent disaster funds might just add another bureaucratic layer in time of need.

Speaking of geography, physical isolation from landslides cutting off supply roads, severed cables, and entire power grids going down often gets talked about as an inevitable impact of nature’s wrath. But what it really shows is an infrastructure system with no backup.

Look at what happened in Palue Island, the region closest to the earthquake epicenter. The island went completely dark, literally and figuratively, as the quake knocked out the power grid and telecommunication towers. Coordination between responders fell apart. Villages lost contact with each other. Aid arrived late as ships were docked due to tsunami warnings. If only there were budgets for redundancies like satellite and power-grid backups for local government offices...

As with what happened in Sumatra, this natural disaster episode is a picture of regional autonomy meeting its limits. Yes, local governments are supposed to run the emergency response, but provinces like NTT have thin local revenue to begin with. Asking a cash-strapped regency to run field hospitals, shelter logistics, and crisis communications on its own, without real transfers from Jakarta, is an exhibit of failing decentralization.

After all, what incentives do Jakarta elites have for disaster preparedness and resilience? Handing out relief boxes and cutting a ribbon on a rebuilt clinic gets you on the news, but not funding seismic research or keeping a satellite network running in the background. It’s no surprise the state keeps investing in the visible, photogenic version of disaster response, while neglecting the “boring” parts that actually save lives before the ground moves.

We should be fair and acknowledge that disaster response, especially in a province with difficult terrain spread across hundreds of islands like NTT, is genuinely hard. Building redundant infrastructure everywhere is expensive in a way that’s easy to say and brutal to fund. But “expensive and hard” describes almost every serious governance problem. It shouldn’t be an excuse to do nothing. If anything, it should be a reason to start.

Sumatra should have forced this reckoning already. After the disaster hit in November 2025, it took the central government eight months to even propose more budget for Sumatra reconstruction. The questions are: in the months people waited for Jakarta to make a decision, how many lives were lost? How much hardship did the people have to endure on top of an already devastating disaster? And, most importantly, how much public trust has diminished?

We can’t allow NTT to be “abandoned” the same way once the story goes cold and the news cycle moves on. Things need to happen even if it’s unglamorous: ensuring the state allocates enough budget for disaster preparedness and allows room to build redundant infrastructure, such as backup power grids, especially for hospitals and crisis centers on islands at risk of isolation. The state should provide non-negotiable central funding for Regional Disaster Mitigation Agency (BPBD) offices in poor, high-risk provinces, instead of leaving them to fend for themselves.

Indonesia won’t stop having earthquakes. Whether they keep turning into mass casualties is a choice the state makes every year it doesn’t fund the “boring” stuff.

♪ Kini terasa sungguh
Semakin engkau jauh
Semakin terasa dekat ♪ —

— wait, stop the music!

We know Nuansa Bening is the go-to golden memory song to sing along to for many of you reading this, but let’s be careful. After all, we’ve seen how the late Vidi Aldiano went through a long legal battle with the original composer over the performing rights of the song he made famous again with his 2008 rendition.

Okay, we might not be in trouble for “singing” the song in this article – that’s not how copyrights work. Though now we are compelled to ask: how does it actually work?

Let’s look outward now with the megastar Taylor Swift, who has been re-recording her past albums since 2021, releasing them with a “Taylor’s Version” tag. This is not because she’s run out of ideas for new material, but because of the complexity of copyrights.

Early in her career, Taylor signed with Big Machine Records, which helped propel her into the limelight. But this partnership gradually became predatory, at least according to the singer, as she grew more popular. As is standard in most recording contracts at the time, the label owns the “masters” of her first six albums, giving it a larger share of future profits from the commercial use of Taylor’s songs.

When Taylor’s efforts to purchase the rights to these original albums entangled her in a high-profile dispute with the label, the artist took an alternative route: as she owned the publishing rights (rights protecting artists’ musical composition, e.g. lyrics, melodies, that is separate from recording rights, under US law) of her composed songs, she re-recorded these albums and released them herself so she could have full ownership of the new recordings of her songs.

But this article won’t tell the story of Taylor Swift’s copyright victory; it will tell the story of Indonesian artists’ copyright battle.

Unlike Taylor and her global pop-star peers, Indonesian artists have far fewer bargaining chips when it comes to rights to their works. They have to navigate murky waters to deal with the country’s outdated and convoluted Copyright Law. Last revised twelve years ago, Law No. 28/2014 has failed both to keep up with the increasingly digital creative industry and to mitigate royalty disputes, most recently between performers and composers.

The House of Representatives (DPR) finally included the revision to the Copyright Law in the 2026 National Legislation Program (‘Prolegnas’, a list of bills that the House will prioritize throughout the year). While the deliberation process is ongoing, it is clear that the revision will continue to address the issue of royalty distribution.

This edition of The Reformist will dissect the political economy of the music industry through the discussion of royalties, the economic rights a copyright holder is entitled to whenever their work is played or performed in a commercial setting. While the term may sound marginal compared to high-profile policies, beneath the seemingly boring bureaucracy is a sector filled with fiery political feuds, lawsuits, and competing ideologies. A much-needed discussion before revisions to the Copyright Law are set in stone, don’t you agree?

A brief history of Indonesia’s Copyright Law

The country’s Copyright Law traces its origins back to the colonial Dutch era. In 1921, the colonial Dutch East Indies government enacted Staatsblad No. 600/1912, a regime that only acted on copyright violations if the rights holder personally filed a complaint. This law persisted long after Indonesia declared independence.

An actual Indonesian Copyright Law (Law No. 6/1982) would only come into existence in 1982, after decades of false starts: ten separate drafting attempts across 14 years, cycling through the Education and Justice Ministry in 1958, the National Legal Development Agency in 1966, and the Indonesian Publishers Association in 1972, each stalled by a backlog of competing bills.

The law was amended again in 1987 to tighten enforcement, and again in 1997 to bring it in line with international norms. Five years later, the law was rewritten and became Law No. 19/2002 as piracy (CD and VCD bootlegging) became the era’s defining threat.

The 2014 revision (Law No. 28/2014) was explicitly intended to ensure the law kept pace with the digital era, but lawmakers were overly focused on digital piracy, failing to anticipate the meteoric rise of digital streaming platforms like Spotify and Apple Music.

This 2014 version is the Copyright Law in place today — the one lawmakers are now “rushing” to revisit and revise some provisions they deem critical. The main star? Music royalties.

Royalty governance has remained inconsistent even after the Law was enacted. The framework only became operational after the release of Government Regulation (‘PP’) No. 56/2021, which clarified how royalties should be managed for the commercial use of music across venues and performances, ranging from cafes and hotels to restaurants and live events. But the problem was never just the absence of clear rules, because tariffs for commercial uses had been set by other regulations before this PP was issued. The real problem, as is with most policies in Indonesia, is weak enforcement.

Who has the most reliable records of which songs were used for commercial purposes? How transparent is the collection and distribution of royalties among all the relevant parties? Who holds the collecting agencies accountable?

These are some of the questions that tell us just how much is still missing from our copyright governance.

The status quo: Centralized royalty distribution

As with many policy problems in this country, legal reforms may have taken place, but institutional enforcement lags far behind. The same can be said for the music industry.

Article 89 of the 2014 law established a collective royalty management mechanism, which was subsequently operationalized through the National Collective Management Agency (‘LMKN’). In addition to collecting, disbursing, and documenting royalties on behalf of every composer and musician in the country, it also serves as a mediating body when disputes break out between parties and documents royalty use across the industry.

LMKN was built to simplify royalty distribution, but in practice it has often been flagged for its opaque management and redistribution scheme. When LMKN receives royalty payments, that money is not directly distributed to the song’s creator. It is first pooled and transferred to one of the 17 government-licensed Collective Management Organizers (CMOs, or ‘LMK’), of which an artist must be a member to receive their royalty checks.

These 17 LMKs are divided into three categories: composers, performers, and producers. Among the 17 are Karya Cipta Indonesia (KCI) and Wahana Musik Indonesia (WAMI) on the composers’ side, PAPPRI and Star Music Indonesia (SMI) representing performers, and Sentra Lisensi Musik Indonesia (SELMI) and Pro Karindo Utama for producers.

This means that if a composer or artist isn’t part of an LMK, there is no way for them to receive royalties. Once the money reaches one of the 17 LMKs, there remains a massive information gap over how the pooled money is then divided before being sent to individual artists.

LMKN officially released new digital mechanisms for distributing royalties only in April 2026. It comprises a ‘song usage system’ that counts how many times a song was played over a given year, and a ‘proxy-based’ Unlogged Performance Allocation (UPA) system for songs whose play record isn’t identifiable.

This creates greater confusion about what was exactly happening in the past. Was it the case that CMOs were distributing royalties arbitrarily?

The answer isn’t entirely clear, since information on the old distribution mechanism was never made public by any CMO. Singer Dewi Gita’s experience in 2024 over her minuscule royalty earnings compounds this confusion, even for individuals in the industry.

“It only says, for instance, that my song ‘Penari’ was only played 1 percent throughout 2024, and then I receive [a check for] Rp 150. That’s all… There’s no breakdown of where that 1 percent is from, what area, what scope,” said Dewi, describing a royalty statement that gave her a percentage — of which was unclear — and a payout with no indication of how that figure was calculated.

Another case in point was House member and singer-songwriter Melly Goeslaw’s, which shows how erratic this opacity could get. In March 2025, she received Rp 559 million in royalties. Four months later, in July, a payment for the same general catalog came in at just Rp 4.9 million.

Melly took the swing in stride publicly to press for structural change, explaining that “It’ll only feel good once the royalty governance is done right, transparent, and accountable.”

With the amount of backlash directed towards the agency, a degree of self-moderation, or at least self-realization, has begun to spread within the LMKN body.

LMKN supervisory board member and legendary composer Candra Darusman was quoted this year saying that refining how royalties are collected and distributed remains a priority, arguing the real challenge isn’t collecting the money but making sure it reaches the right rights holder through accurate data.

LMKN was a good reform, in theory

The irony is that the LMKN is a sound reform on paper. Compare it to the United States, where the music industry runs on an oligopoly of competing private CMOs, meaning that any commercial venue that wants to legally play music has to identify and pay licensing fees to all of them, since there’s no way to know in advance which organizational body represents which artist. Indonesia’s model sidesteps that mess entirely with one managing entity, which has failed to live up to expectations.

The question of whether this new digital distribution system will work or not remains to be seen. But the fact that it is difficult even for sitting House members to gather information on their own royalty dues suggests a systemic problem that has gone unnoticed by the public eye.

Performing rights at the heart of the problem

Royalty disputes in the music industry generally fall into one of three buckets:

• Mechanical rights, which cover the reproduction of a song, pressing it onto a CD, licensing it for a streaming platform’s catalog.

• Synchronization rights, which cover the use of a musical work in visual media, a film, an ad, a TV show.

• Performing rights, which cover what is messiest in Indonesia’s case. The public performance of a song, whether through the radio, a cafe’s speaker system, or an artist singing it live on a stage.

It’s the last category in which nearly every fight this piece has traced so far actually lives.

For small-scale commercial spaces like cafes, pubs, and restaurants, there’s no way for the LMKN to track which individual songs are actually being played, so a blanket fee exists instead: a flat charge that pools royalties collectively rather than billing per song.

Larger events follow the same logic at a bigger scale. Event organizers pay LMKN a blanket fee relative to the size of the event itself: two percent of ticket sales for paid shows or total operational costs for free ones. The graph below shows the different fees commercial venues are charged by the LMKN.

In a perfect world, once that money is collected, the LMKN and the LMKs beneath it are supposed to document exactly which songs were performed, so the correct copyright holders receive the correct share. But much like how distribution schemes aren’t made public by CMOs, neither are the mechanisms for collecting performing rights royalties (we couldn’t find any kind of reports on LMKN’s official sites).

The high-profile Nuansa Bening dispute

LMKN’s incompetence in settling performing rights disputes is best highlighted in the massive legal case between the late singer-songwriter Vidi Aldiano and music composer Keenan Nasution that we’ve mentioned at the beginning of this article.

Keenan, co-writer of the song Nuansa Bening — first released in 1978 — alleged that royalties from Vidi’s 2008 cover had gone unpaid for over 17 years. He filed a lawsuit over 31 concerts in which Vidi performed the song live, demanding more than Rp 24.5 billion in reparations.

Keenan argued that Vidi and his legal team failed to ask for explicit consent to perform the song in live performances. While the case was dropped in March, following Vidi’s passing, a Constitutional Court review of the Copyright Law late last year reaffirmed the Law for everyone that royalties for live performances are legally owed by event organizers, not by the performer.

So, in a case built on 31 individual concerts, 31 separate event organizers were each independently responsible for paying Keenan’s royalties, with no single body confirming whether any of them actually did so. This is compounded by the fact that Keenan only joined a CMO in 2022, making it all the more difficult for any performing rights royalties to be sent to the composer.

We are not here to decipher the intentions behind Keenan’s lawsuit, but his choice to take legal action against what he believed to be close to two decades’ worth of unfair economic redistribution indicates a glaring bureaucratic inefficiency in the country’s royalty distribution governance.

This performing rights dispute between Vidi and Keenan is the pandora’s box for a larger ideological dispute taking place in the country’s music industry.

The case for a decentralized rights regime

But centralization through LMKN isn’t technically the only model on the table. Article 81 of the 2014 law already permits creators to license their work directly to a user, bypassing the LMKN altogether, a mechanism known as direct licensing. Strangely, the Article remained unfamiliar for years, even to music industry players.

When Gerindra politician and ‘Dewa 19’ frontman Ahmad Dhani was asked about his thoughts on the Copyright Law, Dhani explained that he only found out about the possibility of direct licensing eight years after the passage of the 2014 Copyright Law. “I met Minola Sebayang, who explained that performers or songwriters could apply for a direct license. I learned about it eight years later, in 2022,” said Dhani.

If the country’s lawmaker and most vocal direct licensing advocate didn’t even know the option for it existed until nearly a decade into the Law’s passage, it says something about how buried the provision has been beneath the status quo.

Other countries have built systems that treat direct licensing and collective management as complements rather than rivals.

1. In the US, the Copyright Act of 1976 explicitly recognizes direct licensing contracts, and federal consent decrees prevent CMOs from blocking artists who choose to license their own work independently.

2. The United Kingdom takes a similar approach. PRS for Music remains the dominant collecting society, but the Copyright, Designs and Patents Act 1988 preserves a creator’s right to manage licensing on their own terms, particularly for large-scale digital and commercial use.

3. Australia goes further. The country’s antitrust institution, the Australian Competition and Consumer Commission (ACCC), advises that collective licensing agreements should never impede copyright holders’ ability to engage in direct licensing agreements.

It’s not hard to imagine what a system like that would have meant for the legal dispute between Vidi and Keenan. Vidi’s rendition of Nuansa Bening was a career starter for the late artist, lighting the way to what would be years of success as a solo artist. Perhaps a direct-licensing framework would have let the two settle the matter between themselves, a straightforward agreement over a single song, rather than an entire dysfunctional ecosystem.

The messy politics behind music

Beyond the Vidi-Keenan dispute, the broader music industry feud is split between two camps (performers vs. composers) over how royalties should be regulated in the country.

The VISI organization — comprised mostly of singers like Ariel Noah, Armand Maulana, Raisa, Bunga Citra Lestari, the late Vidi, Bernadya, and many more — belongs to a group that believes royalties should continue to be pooled and distributed through a single entity like the LMKN.

On the other side is AKSI, an organization of old-timer music composers like Ahmad Dhani, Keenan Nasution, and Fariz RM that believes copyright holders deserve greater licensing rights and economic compensation for the usage of their work outside the centralized LMKN system. Disgruntled by the current system and unfair economic redistribution policies, this camp has grown frustrated over the centralized status quo.

In August last year, Ahmad Dhani joined a House meeting held by Commission XIII — which handled regulatory reforms — to discuss royalties with Ariel and members of VISI, despite being a member of Commission X, the cultural sector of the House.

Last year, the VISI clique, led by Armand and Ariel, filed the judicial review that helped the late Vidi push the legal battle in his favor. The Court partially ruled in their favor, affirming that royalties from commercial performances are owed by event organizers rather than individual performers. Moreover, the Court ruled that consent for live performances is not required, provided dues are paid to the LMKN.

What is most intriguing about the royalty discourse is that these lobbying activities in the House became so active, in part due to the sheer number of the country’s singers who have turned to politics.

Dhani’s former Dewa bandmate and sitting Indonesian Democratic Party of Struggle (PDI-P) lawmaker, Once Mekel, is not only a party in opposition to Dhani’s Gerindra, but sits across from him in the royalty debate. Dhani backs the direct-licensing crew, while Once backs the centralized LMKN model.

The feud between the two started all the way back to 2023, when Dhani demanded the former Dewa vocalist either stop singing Dewa’s songs in live concerts or pay Dhani royalties each time he performed them.

Like the VISI group, Once argued that event organizers are responsible for paying their dues, as they are often the ones requesting singers to perform certain songs, at least in his case. In March, Once reaffirmed his stance on a centralized model following discussions on the Law’s revision, but is also in agreement with Dhani that there should be stronger provisions governing direct licensing agreements between singers, composers, and rights holders.

From the way deliberation is shaping up in the House, it appears that the centralized model leads the ideological caucus in revising the Law. In August last year, Deputy House Speaker and Gerindra politician Sufmi Dasco Ahmad — informally known as the fixer in the House — put his foot down, stating that royalties would continue to be centrally controlled through the LMKN, while also affirming that the agency would be audited simultaneously for greater transparency.

What should be done to tidy up this mess?

As the House looks to finish a revised Copyright Law, it must ensure the mess from LMKN’s lackluster royalty distribution governance and transparency, or rather lack thereof, is tackled.

We at The Reformist are in the camp that it would be a shame to get rid of the LMKN system entirely. The bureaucratic hassle of a completely decentralized model could discourage the creative industry, with singers becoming selective of song choices in performances, wary of legal disputes and picking a fight.

There’s a beauty in artists paying homage to their peers, whether of the present or the past. Overly policing their ability to sing the country’s rich catalog in fear of persecution will not fare well for the overall creative ecosystem.

At a smaller scale, without a pooled model, small artists and composers with little bargaining power could find it difficult to collect royalties without costly legal and bureaucratic fees.

But this isn’t to say that a decentralized model should be ignored entirely. Other countries have proven that direct licenses can work in tandem with a pooled system. Perhaps with a precedent in place, legal disputes like the one between Vidi and Keenan’s could be resolved and handled without one party suing the other for billions of rupiah.

Despite ideological differences within the music industry, they both agree that structural reforms must take place within the LMKN body.

Deliberations on the revised Law have now been taken over by the Legislative Body (‘Baleg’) of the House since the start of the year, with Committee XIII of the House assigned to lead the formulation process alongside the Directorate General of Intellectual Property (‘DJKI’) of the Ministry of Law. The draft supposedly called for the creation of a National Collective Management Committee (‘KMKN’), a centralized body that will govern the country’s royalty collections and distribution.

How this agency will differ from the LMKN is still a complete mystery. It appears to serve the same purpose as the existing agency, and it is unclear whether the LMKN will be replaced or work alongside it.

There is also a new detail in the draft bill that hints at where lawmakers’ attention actually lies. In Article 29 of the bill, it proposes a “royalty endowment fund” to hold a portion of payments for works whose creator can’t be identified, whose ownership is disputed, or that draw on traditional cultural expressions with no single owner at all.

In other words: a preemptive measure for hypothetical disputes in the future.

That said, instead of repurposing the same ‘solution’ of creating a new agency every time something doesn’t work, we think the lawmakers should look into:

• fixing what already exists by revitalizing the LMKN and the CMOs beneath it instead of replacing it wholesale; and

• expanding provisions for direct licensing, not as a replacement for blanket licensing but as a supplement for specific cases.

A performer like Vidi, requesting a direct license to cover one song from a composer’s catalog, wouldn’t have eliminated the need for blanket licensing elsewhere. It would have instead settled that one dispute in advance.

Until then, royalty disputes will always be a matter of when, not if. The new Law presents crucial momentum to get things right, but perhaps the bigger question is: Who does copyright law actually want to protect?

Now go ahead. Cue the music in and let’s sing the rest of that Nuansa Bening chorus.

— ♪ Akan kukembangkan
Kasih yang kau tanam
Di dalam hatiku~ ♪

While the Indonesian music world is still battling through performing rights distribution disputes, a new big question awaits to be tackled: Artificial Intelligence (AI)-generated artworks. How would the revision to the law protect artists’ works, including music, from AI? We will get into that question in the second part of this series in two weeks.

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A livestream on the Presidential Secretariat’s YouTube channel was stopped abruptly after President Prabowo Subianto, in a meeting with Chamber of Commerce (Kadin) members at the State Palace on July 31, mentioned that he had heard that Iran possessed nuclear weapons. He went so far as to speculate that Saudi Arabia, the UAE, Qatar, and Egypt would likely seek them too. These off-the-cuff remarks he clearly had never run past anyone, prompting the technical team to cut the livestream to show a government ad and remove the segment from its official archived recording.

Within the next few days, the Iranian Embassy in Jakarta issued a formal statement denying the allegation on Instagram, insisting the country has “never pursued the possession of nuclear weapons.” Analysts pointed out that the unverified claim parroted allegations historically used by the United States and Israel to justify military posture, directly contradicting findings from the International Atomic Energy Agency (IAEA), which has found no evidence of a coordinated Iranian weapons program.

Prabowo did hedge his claim in that meeting by stating “it is said that [Iran has nuclear weapons],” but a head of state floating nuclear rumors to a room full of businesspeople fails to register that his “casual” remarks could instantly propel a diplomatic nightmare.

A pattern of “errors”

It is not the first time Prabowo’s “slip of tongue” has outrun diplomatic restraint.

In June 2023, while serving as Defense Minister, Prabowo delivered a presentation on Indonesia’s defense concept called “Trisula Perisai Nusantara” or the Nusantara Shield of Trident. He displayed a slide showing the 300-kilometer reach of Indonesia’s ballistic missiles, explicitly mapping Singapore, Australia, and the Philippines within the targeting radius.

Publicly diagramming neighboring partners within your strike zone is precisely the kind of imagery ASEAN foreign ministries spend decades trying to avoid. Broadcasting visual maps that imply neighboring partners sit in your crosshairs sends a tone-deaf message: we could hit you if we wanted to.

The thread connecting the missile map to the nuclear remark is a disregard for the basic mechanics of global statecraft, in which a single phrase alters deterrence, triggers formal inquiries, and demands immediate damage control.

Prabowo is the foreign policy

Prabowo has made it quite clear that Indonesia’s international posture is run by him and him alone, effectively sidelining the diplomatic bureaucracy and bypassing the institutional checks built into the Indonesian Foreign Ministry.

But if one insists on playing the role of chief diplomat and taking full ownership of the nation’s foreign affairs, one needs to actually act like one, which means exercising basic diplomatic discipline, exercising restraint, and watching every single word that one uses in formal meetings.

There is no walking back an offhand comment once a foreign embassy is forced to issue a formal denial and international observers begin questioning why the president’s information conflicts with international atomic inspectors. In global politics, “unfiltered” is synonymous with “reckless.” Clumsy commentary risks alienating strategic partners, entangling Indonesia in foreign disputes, and eroding Jakarta’s reputation as a dependable, rational mediator.

Two things to course correct

We are not saying Prabowo should cease being an active and hands-on leader on foreign policy. Instead, we believe he should re-establish basic operational discipline to protect the country’s strategic interests.

First, the president needs to empower and “reintegrate” with the Foreign Ministry.

The ministry must have a real seat at the table before the president delivers speeches touching on foreign militaries, nuclear programs, or contested territories; not afterward, when the job has shifted to damage control. The administration must return institutional advice and diplomatic vetting not as bureaucratic hurdles but strategic assets.

Second, Indonesia must institutionalize speech discipline.

Someone close to the president must be able to intervene before he walks on stage, ensuring that unvetted lines about foreign weapons programs do not make it into strategic or formal speeches. When discussing sensitive international affairs, adhering to prepared remarks and reading off the prompter is standard operational discipline practiced by world leaders to safeguard national standing.

Personal charisma has its place in global governance, but it must be anchored by institutional rigor. That is the difference between a leader who improvises with impunity and one who gets to keep improvising because he is disciplined about where he does it.

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