SUMMARY OVERVIEW 10 MARCH 2025

Politics: A cabinet reshuffle seems likely soon after the 30 March Idul Fitri holiday,
with Finance Minister Sri Mulyani Indrawati and Coordinating Economics Minister
Airlangga Hartarto likely to exit. In fact, Indrawati’s role in cabinet decision-making has
already diminished; nonetheless, her ouster would affirm the abandonment of technocratic
management and affect confidence. Vice Finance Minister Thomas Djiwandono will
likely replace her, while the protectionist industry minister, Agus Kartasasmita (AGK),
replaces Hartarto. The information and cooperatives posts may also change (Page 2).
A revision of electoral laws will likely scrap direct elections for district-level regional
heads (p. 4). According to Satryo Brodjonegoro, the higher-education minister who
resigned last month, Cabinet Secretary Teddy Wijaya told him that “the president is
allergic to demonstrations” (p. 5).
The communities minister of the National Mandate Party (Pan) is under fire for having
used his post to aid his spouse’s mayoral campaign in Serang (p. 6). The president
conducted meetings with major tycoons (p. 10). According to state prosecutors, it is a
hoax that the Pertamina markup case embroils SOE Minister Erick Thohir (p. 6).
Military: Former President Susilo Bambang Yudhoyono (SBY) spoke out against the
proliferation of active military officers in civilian posts. Nonetheless, work is underway on
a revision of the 2004 Military Law – to expand military roles in the bureaucracy and,
perhaps, permit personnel to engage in business, especially as state-enterprise (SOE)
executives. Tempo revealed that Prabowo assigned 200 colonels to study business
management. The military re-entering business would trigger demonstrations (p. 8).
Policy News: The president bestowed strategic national project (PSN) status on
29 projects, in addition to 47 PSNs carried over from the Widodo administration (p. 12).
Mining: The energy minister issued a decree applying guideline prices on mining
exports, for the purpose of calculating royalties and taxes. The measure aims to combat
the problem of ‘under-invoicing’ (p. 14).
The Reformasi Weekly Service
Justice: The trial of former Trade Minister analyzes politics and policies in
Tom Lembong commenced. State prosecutors Indonesia. Kevin O’Rourke, author
of the book Reformasi, performs the
issued charges based on dubious calculations research and writing. Produced
of supposed losses to the state (p. 14). independently and on-time since
2003, Ref Wkly offers unique value
Disasters: Severe floods affected several for organizations operating or
parts of West Java as well as Riau (p. 16). investing in Indonesia. Inquiries:
<[email protected]>.

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 REFORMASI WEEKLY REVIEW – 10 March 2025

POLITICS
A cabinet reshuffle affecting the economics team is likely to occur in early April,
immediately after the Idul Fitri holiday, according to a credible source. President Prabowo
Subianto is likely to make changes in several key posts:
 Coordinating Economics Minister Airlangga Hartarto is likely to undergo replacement by Industry
Minister Agus Gumiwang Kartasasmita (AGK);
 Vice Minister for Immigration and Penitentiaries Silmy Karim is likely to replace AGK as
industry minister;
 Finance Minister Sri Mulyani Indrawati may leave, with the ministry dividing into two parts;
 Vice Finance Minister Thomas Djiwandono may become finance minister;
 Vice Finance Minister Anggito Abimanyu may become head of a new National Revenue Agency;
 Cooperatives Minister Arie Budi Setiadi is likely to depart due to the online gambling scandal that
affected the Communications Ministry that he headed last year; and
 Meutya Hafid may lose her post as the current communications minister, due to her perceived
inability to control rancor in the Journalists Association (PWI), which has a bifurcated leadership,
and a sugar imports case that has embroiled her husband (along with former Trade Minister Tom
Lembong – see ‘Justice’, below).1

ANALYSIS: The departure of Indrawati is not entirely certain and over the next three weeks
significant changes could affect the complexion of a reshuffle. Indrawati has defied
expectations of her departure in the past – specifically, last October, when Prabowo retained
her in the position that she has held for 14 of the past 18 years. It is therefore possible that
input provided to Prabowo will salvage Indrawati’s prospects. At this stage, however, it
appears more likely that she will depart.

To be sure, it has become clear that Indrawati has already suffered a drastic loss of influence.
The president overruled her on the issue of the value added tax (VAT) rate, he excluded her
from decision-making on momentous budget cuts, and he placed her trusted director-general
for budgeting under arrest on charges that are spurious. Indrawati’s diminished role has
already impacted policymaking, and her ministry matters less due to the vast resources and
unbridled scope that the president has conferred on the state holding company Danantara.

Indrawati’s departure would therefore mainly affect external perceptions. For any observers
who have not already taken note, it would confirm that the president has dispensed with the
longstanding technocratic ethos of macroeconomic policymaking that is the envy of many
emerging-market economies.

Replacing Indrawati with Djiwandono, the president’s nephew, would mark a major change.
It would cement perceptions that the administration is replacing meritocracy with governance
based on personal loyalty or ‘fealty’. If the president opts to fill the post with a family
member, rather than an experienced professional, questions would arise about why so much
importance pertains to trust and loyalty. In any event, in the wake of the arrest of the

1
Tribun, “Profil Noer Fajrieansyah, Suami Kedua Meutya,” 7 March 2025, https://tinyurl.com/27dch69s.

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 REFORMASI WEEKLY REVIEW – 10 March 2025

ministry’s director general for budgeting, Isa Rachmatarwata, on absurd charges, Djiwandono
would likely face deep-seated resentment within the ministry’s ranks, risking dysfunction.

If both Indrawati and Hafid do indeed leave their posts and men replace them, the
representation of women in the cabinet would decline to six percent (three out of 48). And
the three remaining women would be in relatively less strategic posts: state apparatus
empowerment, women’s affairs and tourism.

Potential Reshuffle: Key Points

 Likely immediately after 30 March Idul Fitri
 Industry Minister Agus Kartasasmita (AGK) likely replacing Coordinating Minister Hartarto
 Finance Minister Sri Mulyani Indrawati potentially leaving…
…replaced by Vice Finance Minister Thomas Djiwandono and the ministry split apart
 Information & Digital Minister Meutya Hafid also in jeopardy
 If so, changes would adversely affect policymaking and confidence

It seems quite certain that the reshuffle will feature the promotion of AGK to coordinating
economic minister. An affinity between Hartarto and Prabowo has been lacking, and it was
against expectations that Hartarto kept his coordinating-minister role last October. An appeal
by former President Joko Widodo may have been decisive in helping Hartarto at that time –
but, by now, Widodo seems to lack influence. A factor helping AGK may be that his father,
the Soeharto-era energy minister Ginandjar Kartasasmita, lent support to Hashim
Djojohadikusumo at the start of his business career.

As coordinating minister, AGK will likely pursue a significantly more protectionist stance on
trade – restricting imports and directing state support to specific industries. An uncomfortable
rivalry may ensue between him and Energy Minister (ESDM) Bahlil Lahadahlia: AGK would
be in prime position to fill the Golkar chair post if Lahadahlia – who is weakening politically
amid incessant controversies – ever vacates it.

As for Hafid, her removal from the information portfolio could result in a successor who will
apply heavier pressure on the press. Anecdotal accounts suggest that this pressure has been
emanating thus far from Gerindra Executive Chair Sufmi Dasco. He may wish to entrust this
to a loyalist who will take over as minister from Hafid.

The likely incoming industry minister, Silmy Karim, served last year as director general of
immigration in the Law Ministry. He had previously been the chief director of state-owned
Kratakau Steel as well as the head of the state munitions company, Pindad. He served in the
past on an advisory board to the State Intelligence Agency (Bin).

BOTTOM LINE: An April reshuffle may impair the cabinet by increasing protectionism and
damaging credibility. Indrawati’s exit would deliver a blow to confidence.

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 REFORMASI WEEKLY REVIEW – 10 March 2025

Removing direct elections for district-level regional heads is a likely element of

upcoming changes to electoral laws. Legislators have been working on revisions of three
election-related laws, which they will likely bundle into one code; these are the laws on
political parties, national elections and
regional-head elections (see box). Heading Election Laws Under Revision
the process is Golkar’s chair of Commission Law Year Regarding
II on Home Affairs, Ahmad Doli Kurnia. He 7 2017 National Elections
said that the revision process may take 10 2016 Regional-Head Elections
1-2 years to complete. 2 2011 Political Parties

Among the options under consideration is the scrapping of direct elections for district chiefs
and mayors. The mechanism for these elections would return to voting in district assemblies
(DPRDs), as had been the case from 1999-2005.2 Provincial governors would continue to
undergo direct election.

Also under discussion is the scheduling of elections. In the 2024, all regional-head elections
took place simultaneously nationwide, only six months after the national election, and the
scheduling complicated the work of election administrators. Lawmakers are citing this
problem as justification for altering the length of terms for certain offices in order to space out
the national and regional-head elections.

Another aspect is the format for legislative elections. Proposals suggest moving from the
prevailing semi-open list system to return to a closed-list system, as had been the case in
1999-2004. At issue is the power of central party leaderships to determine which candidates
fill seats that the party has won.

Electoral Law Revisions: Key Points

 Three main laws undergoing revision
 Ending direct elections for district-level regional heads seems likely
 Changing the legislative election format would strengthen the power of party leaders
 Parties reputedly asked to consider amending Constitution to change presidential term lengths
 Adverse reactions likely in polling and from students

ANALYSIS: Weaknesses exist in the electoral system, especially a dearth of campaign

finance controls, and revisions therefore have potential – in theory – to strengthen democracy.
However, indications suggest that the president insists that direct elections for regional heads
must end – at least for the lower level of district chiefs (bupati) and mayors (walikota), if not
provincial governors.

President Prabowo Subianto has repeatedly voiced sharp criticisms of such direct elections,
claiming that campaigning is costly and the contests contribute to social friction. In fact, the
absence of campaign-finance rules exacerbates costs, while the only instances of serious
violence in Indonesia’s democracy have occurred when Prabowo rejected the outcome of

2
MetroTVNews, “DPR akan Bahas Arah Baru Pilkada,” 12 Feb 2025, https://tinyurl.com/288lx887.

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 REFORMASI WEEKLY REVIEW – 10 March 2025

races that he lost. At issue, in fact, is the greater ease of controlling regional-head election
outcomes when they take place within the confines of a DPRD, rather than among the general
electorate.

There is also anticipation that the president will demand that parties support a constitutional
amendment to extend his current term to eight years, such that the next presidential election
would occur in 2032. The proposed change would alter the current provision in the
Constitution – a maximum of two five-year terms – to a maximum of one term of eight years.
As such, it would bear resemblance to the system in the Philippines, which has a maximum of
one term of six years. The change would apply immediately to the president’s current term.
Initiating an amendment process would require support from two-thirds of the 732-seat
People’s Consultative Assembly (MPR), which consists of 580 parliamentarians and
152 members of the Regional Representatives Assembly (DPD).

The rampant proliferation of politically consequential legal cases, prosecuted by the

government-controlled Anti-Corruption Commission (KPK) and Attorney General’s Office
(AGO), has brought about rigid obedience of all eight parliamentary parties to the president.
It is therefore conceivable that parties will agree to amend the Constitution as per the
president’s reputed wish. However, such a move would be certain to elicit a negative reaction
from students. If this unfolds against a context of deteriorating economic conditions, broader
sections of society sympathize with demonstrations or actively support them. Any unrest and
disorder would adversely affect Indonesia’s international image.

President Prabowo Subianto EIU: Lower Democracy Score

repeatedly insists that the public
Indonesia’s democracy score slipped again in the annual
wants governmental authority report by the Economist Intelligence Unit (EIU). In
exercised by a class of political 2022, Indonesia had obtained a score of 6.7, but in 2023
elites who perpetually remain in this slipped to 6.5 and last year to 6.4. The EIU has
consensus with one another – as categorized Indonesia since 2022 as a flawed
opposed to “Western democracy”. democracy. Having ranked 52nd among countries
In fact, polling has long shown – surveyed in 2021, Indonesia has slipped in the rankings
and continued to show, in a Kompas to 59th in 2024.
survey conducted in January – that
an overwhelming majority favors retaining the ability to vote directly for their leaders.

BOTTOM LINE: A process to revise electoral rules will likely squander an opportunity for
strengthening democracy and may lead to unrest.

Satryo Brodjonegoro, who resigned last month as higher education minister, disclosed
that Cabinet Secretary Teddy Wijaya faulted him for “fatal mistakes”. In a lengthy
interview with MetroTV on 7 March, Brodjonegoro recounted that Wijaya visited his
ministerial residence around 22.00 on 18 February, after student demonstrations had occurred
for two days in Jakarta and other cities. According to Brodjonegoro, Wijaya told him that his
remarks in parliament the previous week – when media accounts quoted the minister as
expressing concern about tuition rising in response to budget cuts – precipitated the

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 REFORMASI WEEKLY REVIEW – 10 March 2025

demonstrations. Furthermore, according to Brodjonegoro, Wijaya said that, “The president is

allergic to demonstrations, because it creates the appearance of unrest.”3

Brodjonegoro also explained that Wijaya cited another instance of demonstrations: protests by
personnel at the Higher Education Ministry that had accused him (Brodjonegoro) of
corruption. He said that he explained to Wijaya that those protesting were from the ministry’s
internal administration department, and that their Instagram accounts revealed them
conducting lavish international trips each year. He cited this as evidence of longstanding
corruption that has affected the ministry’s procurement of supplies and materials, in the form
of collusion, markups and kickbacks. He therefore transferred the officials to a department
unrelated to procurement – and the protests with false allegations against him ensued.
Brodjonegoro sought to explain to Wijaya that he was merely trying to carry out the
president’s instructions to root out corruption and waste.

Brodjonegoro said that he asked for an opportunity to explain directly to the president, but the
president did not accommodate this. The next day, therefore, he tendered his resignation.
The president immediately filled the post with a youthful figure from Muhammadiyah, Brian
Yuliarto.

ANALYSIS: Brodjonegoro’s account attests to a presidential leadership style that tends to

find fault, while registering high sensitivity to displays of dissent or defiance. The vignette
also illustrates the formidable role now exercised by Wijaya as the president’s top lieutenant.

Calls arose for Communities Minister Yandri Susanto to resign from the cabinet,
following revelations of improprieties in the mayoral election in Serang, Banten, which
featured his spouse. The Constitutional Court (MK) ordered that electoral authorities in the
Banten capital redo the election, due to findings that Susanto urged community heads (kepala
desa) to back his wife, Ratu Rachmatuzakiyah.

Justices noted that the communities minister, who presides over the giant Community Funds
(Dana Desa) program, wields influence with community heads. In particular, Susanto used
ministry letterhead to invite Serang community heads to attend a gathering to celebrate his
wife, a month prior to the election.4 Civil society organizations (CSOs) have consequently
called on the president to sack Susanto.5 Officials in his party, National Mandate (Pan),
denounced the calls as “politicized.”6

State prosecutors made clear that claims about State Enterprise Minister Erick Thohir –
linking him to the recent Pertamina mark-up case – are a hoax. Accounts circulated on
social media last week that pointed to supposed links between the Thohirs (Erick and his
brother, Adaro Energy CEO Boy Garibaldi Thohir) and alleged perpetrators of markups on oil

3
Medcom.id, “Eksklusif! Blak-Blakan di Balik 2 Demo,” 7 March 2025, https://tinyurl.com/23jraonz.
4
Kompas, “Menteri Yandri Jelaskan Soal Viral Surat Kop,” 23 Feb 2025, https://tinyurl.com/263bwkkx.
5
Kompas, “Masyarakat Sipil Desak Presiden Pecat Mendes,” 26 Feb 2025, https://tinyurl.com/29ojpm9g.
6
Tempo.co, “Yandri Susanto Didesak Mundur, PAN: Hak,” 6 March 2025, https://tinyurl.com/286tm5ly.

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 REFORMASI WEEKLY REVIEW – 10 March 2025

products imported by Pertamina (see last week’s issue, Ref Wkly 25-02-28). The case,
investigated by the AGO, implicates the long-notorious oil importer Riza Chalid. Garibaldi
Thohir was among the tycoons who met with President Prabowo Subianto on 5 March for a
discussion of the economy.

President Prabowo Subianto convened discussion sessions with a collection of tycoons,

including the military financier Tommy Winata and the real estate developer who
constructed the illegal Tangerang sea fence, Sugianto Kusuma (aka ‘Aguan’). Also present
was Lippo Group owner James Riady (see table). Also taking part in the meeting were State
Secretary Prasetyo Hadi and Cabinet Secretary Teddy Wijaya.

Tycoons Consulting Prabowo

Presidential Palace Meeting, 6 March
Main Sector
Tycoon Group
Energy Property Commodities Food/Healthcare
Anthony Salim Salim √ √ √ √
Franky Widjaja Sinar Mas √ √ √ √
Prajogo Pangestu Barito √ √
Garibaldi Boy Thohir Adaro √ √
Dato Sri Tahir Mayapada √ √
Tommy Winata Artha Graha √ √
Sugianto Kusuma (‘Aguan’) Agung Sedayu √
James Riady Lippo √
Source: Assorted press reports, Ref Wkly research

Prabowo sought input on how to create jobs, but photos and video show the president
primarily providing guidance to the tycoons. A press release from the palace noted that the
president expressed his appreciation for the tycoons’ support for the free meal (MBG)
program, the pursuit of self-sufficiency in food and energy, and industrial downstreaming.

Prabowo met again the next day with the same eight tycoons, plus three others: CT Group
owners Chaerul Tanjung, Medco owner Hilmi Panigoro and Jhonlin Group owner Andi
Syamsuddin (aka ‘Haji Isam’). Also attending was US hedge fund owner Ray Dalio (75),
who will reportedly perform an advisory role for the president.

ANALYSIS: Enlisting support for the government from tycoons, especially those of
ethnic-Chinese descent, was a feature of Soeharto’s regime that former President Joko
Widodo revived (he sought support for the Nusantara Capital). The tycoons assembled by
Prabowo encompass much of the country’s coal-mining and power sectors, as well as
plantations and property. That Kusuma took part – despite his proven involvement in the ‘sea
fence’ fiasco – casts doubt on the impartiality of law enforcement. As for the advisory role of
Dalio, the investor resides in the US and does not speak Indonesian – but his age is
commensurate with that of Prabowo and so he may garner some attention. He has said
publicly that climate change poses risks, which could render his input constructive.

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 REFORMASI WEEKLY REVIEW – 10 March 2025

MILITARY
Former President Susilo Bambang Yudhoyono (SBY) criticized the placement of active
military officers in the civilian bureaucracy. Throughout the New Order regime of
Soeharto, the Army performed a ‘dual function’ (dwifungsi) in security and politics. Active
officers routinely served in the cabinet, bureaucracy, regional-head posts, state enterprises and
legislative positions. In addition, military entities (such as cooperatives for personnel
welfare) managed business interests in sectors such as logging, mining, fishing and property.

As a senior Army general in the late 1990s, and later as a minister and president, Yudhoyono
played a central role in bringing about the withdrawal of the military from politics, followed
later by the relinquishment of the vast bulk of its business interests. The 2004 Military Law
codified these changes. However, in recent years, President Joko Widodo and President
Prabowo Subianto made a host of appointments of active officers to civilian jobs.

Military Appointments: Key Points

 Recent trends to post active military personnel to civilian jobs evokes Soeharto’s dwifungsi
 SBY’s criticism of the practice constitutes a rare public rebuke of Prabowo’s decision-making
 Scrutiny focuses on the recently promoted Lt Col Teddy Wijaya…
…whose role as cabinet secretary is questionable
 A revision of the 2004 Military Law would expand civilian roles for active officers…
…and possibly permit them to re-enter business activities
 Tempo reports that the president launched a study course on business management…
…at Defense University for 200 active colonels…
…who will take up posts in state-owned enterprises (SOEs)

Recently, Prabowo elevated a two-star general, Novi Helmy, to head the State Logistics
Agency (Bulog), which manages staple food supplies. Helmy continues to serve
simultaneously as head of the Military Academy.

Another instance is Maj Gen Ariyo Windutomo, who occupies an Echelon I post as head of
the presidential secretariat. Others are: Maj Gen Maryono, the inspector general of the
Transportation Ministry; Maj Gen Irham Waroihan, the inspector general of the Agriculture
Ministry; and Rear Admiral Ian Heriyawan in the Haj Administration Agency (BPH). The
chiefs of the Army and the Navy are commissioners, respectively, in state-owned arms
manufacturer PT Pindad and state-owned shipbuilder PT Pal.

Particular attention pertains to Cabinet Secretary Teddy Wijaya (35). In early March he
received promotion to lieutenant colonel, from the rank of major. Last October, Prabowo
placed Wijaya in the post of cabinet secretary, a prominent position within the State
Secretariat. He has since emerged as a formidable locus of power within the administration,
which has drawn added scrutiny to the validity of his status as an active military officer while
serving in his civilian post (see box, next page).

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 REFORMASI WEEKLY REVIEW – 10 March 2025

‘Major Teddy’: Appointment as Cabinet Secretary

Teddy Indra Wijaya, known as ‘Major Teddy’, has become a celebrity among the president’s
ardent supporters, as he has been personally accompanying President Prabowo Subianto in
virtually every instance for several years. Wijaya is a 2011 Academy graduate who entered the
Special Forces (Kopassus) before becoming an assistant adjutant to President Widodo in 2014. In
2020, he became the adjutant to the defense minister at the time, Prabowo.
Under President Widodo, the post of cabinet secretary held cabinet-level rank and it was not
among the positions that the 2004 Military Law designated as permissible for active military
officers to hold. To validate Wijaya’s appointment, without jeopardizing his active Army status,
Prabowo moved the position of cabinet secretary into the State Secretariat. It now resides two
levels below the state secretary, under the position of military secretary to the president (sekretaris
militer presiden). This post is among the positions that the Military Law explicitly authorizes
active officers to hold. The language of the law pertains only to that specific position, rather than
staff roles underneath it – but, nonetheless, several dozen active military officers serve in
Presidential Military Secretariat (setmilpres). These include Wijaya.
However, Wijaya’s qualifications for the cabinet secretary role are questionable. Even after the
drastic reduction of the position’s rank – from the equivalent of minister, previously, to the current
‘functional’ level of Echelon II – Wijaya lacked sufficient military seniority to qualify. As per a
2016 decree on the matter from the defense minister, officers must possess certain ranks in order
to occupy certain levels in the bureaucracy. For Echelon II, an appointee must be a lieutenant
colonel or higher. At the time of his appointment last October, Wijaya was a major. Only last
week did he receive promotion to lieutenant colonel. And despite Wijaya technically occupying
a mid-level bureaucratic post, he received his induction directly from the president, rather than
from the head of his ministry, State Secretary Prasetyo Hadi.

Policymakers are now preparing a revision of the Military Law that may revive Soeharto-era
dwifungsi and also permit military involvement in business. On 23 February, Yudhoyono
addressed members of his Partai Demokrat and voiced reservations about the proliferation of
military appointees in civilian positions. He stressed that, “Military officers must resign if
they wish to take up civilian posts.”7 He cited the example of his son, Agus Yudhoyono
(AHY), who retired as a major in order to run for governor of Jakarta in 2017. The former
president explained:

“That was a specific doctrine that we issued back then – during the reformasi of the
security forces (Abri). I put together a reform team (tim reformasi). I headed the tim
reformasi and we carried it out. I felt called upon to do that – inspired. If one is still
an active general, do not engage in politics. If they wish to do so, retire first.”8

The 2004 Military Law has long obligated officers to retire from the military before taking up
posts in the state bureaucracy – with the exception of a finite list contained in the law’s
Article 47. The article cites 10 civilian institutions or positions that may accommodate active
military personnel, namely the:

7
Kompas.id, “SBY: TNI Aktif Harus Mundur jika Masuk,” 23 Feb 2025, https://tinyurl.com/28hua9lt.
8
Kompas, “SBY: TNI Aktif Harus Mundur jika Masuk Politik,” 23 Feb 2025, https://tinyurl.com/28hua9lt.

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 REFORMASI WEEKLY REVIEW – 10 March 2025

 Office of the Coordinating Minister for  National Resilience Institute (Lemhanas);

Politics, Law and Security;
 National Defense Council (DPN);
 Defense Ministry;
 Search and Rescue Agency (Basarnas);
 Presidential Military Secretary;
 State Intelligence Agency (Bin);  Narcotics Agency (BNN); and
 Encryption Agency (LSN);  Supreme Court

In addition, a 2016 decree from the defense minister mentions three additional agencies that
may make use of active officers, based on presidential decrees (Perpres), namely the:
 Disaster Management Agency (BNPB);
 Counter Terrorism Agency (BNPT); and
 Coast Guard (BKL)

In mid-February, President Prabowo Subianto delivered a presidential mandate (ampres) to

parliament authorizing progress on a revision of the 2004 Military Law. All eight
parliamentary parties have agreed to proceed. The draft bill reportedly proposes to open
additional civilian posts to active officers.

In addition, the bill reportedly aims to legalize business activities for the military. In the 2004
law, Article 39 lists “business activity” among the areas expressly prohibited for active
personnel. This past week, Tempo reported that President Prabowo Subianto assigned
200 active colonels to take a course of instruction on business management (see box).

Business Training for Military Officers

A 2 March report in Tempo disclosed that President Prabowo Subianto arranged for 200 mid-level
officers to undertake a study course on business management. The course took place in January
at the Defense Ministry’s Defense University, near the president’s home in Hambalang. The title
of the article is: “Prabowo’s Study Course Prepares to Insert Military into State Enterprises.”9
The course pertained to business, finance, management and investment, with an emphasis on food
and energy. Tempo quoted an academic from the Bandung Institute of Technology (ITB), Yudo
Anggoro of the Center for Policy and Public Management, who said, “I lectured on the topic of
corporate governance.”
Tempo mentioned that rules for the event required participants to deposit their handphones outside
the venue so that no photos would emerge. Prabowo launched the course by delivering an oration
to 200 colonels for several hours. The report indicates that the program participants will receive
postings in state enterprises, regional-government enterprises and companies that will operate
under the Defense Ministry.
No other news outlets have made reference to the topic.

9
Tempo.co, “Siasat Prabowo Menyusupkan TNI ke BUMN,” 2 March 2025, https://tinyurl.com/29s5skgz.

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 REFORMASI WEEKLY REVIEW – 10 March 2025

Opposition to the military re-entering business emanated from a veteran parliamentarian from
PDI-Perjuangan, Maj Gen (ret) T. B. Hasanuddin. He said, “This is no longer relevant” and
added, “If it happens, it would revive dwifungsi.”10 Another legislator, Frederik Kalalembang
from Yudhoyono’s Partai Demokrat, voiced reservations about a provision in the bill that
would raise retirement ages for military officers. He noted that a surplus of senior officers
already lack sufficient commands to accommodate them, and elevating retirement ages would
exacerbate the problem.

Revisions of the 2002 Police Law and the 2004 Law on the Attorney General’s Office (AGO)
are also due to happen, but reports indicate that parliamentarians have not yet received ampres
from the president to proceed with these bills.

10
Detik, “Kian Ramai Penolakan RUU TNI-Polri-Kejaksaan,” 4 March 2025, https://tinyurl.com/27vkpuxb.

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 REFORMASI WEEKLY REVIEW – 10 March 2025

POLICY NEWS
The government announced a list of strategic national projects (PSNs) that includes
29 newly designated items. The list contains familiar goals long propounded by President
Prabowo Subianto regarding self-sufficiency in food and energy, along with meals for
schoolchildren and a housing program. However it also features a project to develop
waste-to-electricity projects in a host of cities – a priority that former President Widodo
pursued, but which the State Power Company (PLN) blocked in most cases. An additional
48 PSNs are incomplete or un-started projects carried over from Widodo administration.

National Medium-Term Development Plan (RPJMN):

Strategic National Projects (PSNs)
New PSNs, 2025-2029 RPJMN
1 Free nutritious meal (MBG) program
2 School repairs
3 Building one exceptional school per district
4 Building one full-service hospital per district
5 Eradicating tuberculosis
6 Developing food estates in Central Kalimantan, South Sumatra and South Papua
7 Food security through community-based forestry
8 Irrigation for supporting food reserves
9 Increasing beef and milk production
10 Developing a national fisheries port in Bali
11 Revitalizing sustainable aquaculture along Java’s north coast
12 A giant seawall along Java’s north coast
13 9 gigawatt Kayan hydro dam in North Kalimantan
Sugarcane-based bioethanol in North Sumatra, Lampung, West Java, Central Java, Yogyakarta,
14
East Java, South Sulawesi and South Papua
15 Pertamina biorefineries in Riau and South Sumatra
16 Pertamina’s Balongan VI refinery development master plan
17 Downstreaming cassava, sweet potatoes and sago
18 Downstreaming salt for soda ash in East Java
19 Downstreaming palm oil and seaweed
20 Downstreaming nickel, bauxite and copper by Mind ID and private entities
21 Developing the N219 amphibious aircraft by Dirgantara
Petrochemical developments: Chlor Akali and Ethylene Dichloride Factory; Lotte Indonesia New
22
Ethylene Project
23 Developing integrated digital government services
24 Providing a large-scale national map (‘One Map’ policy)
25 Developing integrated port facilities in Ambon
26 Building a toll road integrated with utilities in Sumatra
27 Establishing government facilities for newly created administrations in Papua
28 Building three million homes
29 Developing environmentally friendly waste-to-energy installations

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 REFORMASI WEEKLY REVIEW – 10 March 2025

National Medium-Term Development Plan (RPJMN):

Strategic National Projects (PSNs)
Existing PSNs Carried Over, 2025-2029 RPJMN
# Sector Project / Location
1 Academia West Java Islam International University (UIII)
Way Apu, Maluku; Jragung, Central Java; Mbay, NTT; Bulango Ulu,
2-5 Dams
Gorontalo
6-7 Waterworks Wosusokas, Central Java; Benteng-Kobema, Bengkulu
8 Gas Masela block, Maluku
9 Oil refinery Pertamina Tuban expansion, East Java
10 Biofuel Pertamina methanol and ethanol, Bojonegoro
11 Oil North Hub Development, Makassar Strait
12 Oil refinery Pertamina Cilicap refinery rescoping, Central Java
13 Biofuel Pertamina Cilicap biorefinery, Central Java
Network development in Batam, Palembang, Pekanbaru, Makassar, Jakarta,
14 City gas
Bekasi and Palu
Economic Zones Arun, Lhokseumawe, Aceh; Sei Mangkei, North Sumatra; Galang Batang,
15-17
(KEK) Riau Islands
Batang, Central Java; Ketapang Bangun Sarana, West Kalimantan;
Kalimantan Industrial Park (KIPI), North Kalimantan; Weda Bay, North
Maluku; Bantaeng, South Sulawesi; Teluk Bintuni, West Papua (with
methanol, ammonia and CCUS/CCS; Tanah Kuning, North Kalimantan;
Pulau Ladi, Riau Islands; Fakfak, West Papua; Indonesia Dahuaxing, Central
Sulawesi; Huali, South Sulawesi; Wiraraja Green, Riau Islands; Indonesia
18-41 Industrial Parks
Giga, Southeast Sulawesi; Kolaka, Southeast Sulawesi; Aspire Stargate,
Southeast Sulawesi; Toapaya, Pulau Poto and Kampung Masiran, Riau
Islands; Tekno Hijau Konasara, Southeast Sulawesi; Futong, Riau; Pulau
Penebang, West Kalimantan; Kumai Multi Energi, Central Kalimantan;
Alumina Toba, West Kalimantan; Indo Mineral Mining, Central Sulawesi;
Tabuk, Central Kalimantan; Rimau, Central Kalimantan
42 National Capital Nusantara Capital (IKN)
43 Port Patimban, West Java
Transjakarta East-West corridor, Jakarta; Serang-Panimbang Toll Road;
44-47 Transport
Probolinggo-Banyuwangi Tollroad; Patimban Access Road, West Java
48 Sanitation Sewerage system, Jakarta
Source: Assorted press reports, Ref Wkly research

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 REFORMASI WEEKLY REVIEW – 10 March 2025

MINING
Energy and Mining Minister (ESDM) Bahlil Lahadahlia announced a decree on mining
export pricing for the purpose of calculating royalties and taxes. The regulation, Kepmen
ESDM #72/2025, sets forth formulas for calculating mineral-export guideline prices (HPM)
and coal-export guideline prices (HBA).

The calculations take into consideration the grade or quality of the export as well as recent
price trends. Exporters must pay royalties and taxes calculated as percentages of the HPM or
HBA – regardless of whatever prices they actually achieve on sales to customers. The
guidelines undergo updating every two weeks.

Spokespeople for mining interests registered harshly negative reactions. Among other
complaints, they faulted the minister for unveiling the decree without prior warning or
preparation.

ANALYSIS: The purpose of the guideline price calculation for mining exports is to address a
perceived problem of ‘under-invoicing’. Exporters who misrepresent and under-report the
true value of their sales, in order to reduce the amount of royalties and taxes owed to the
government, will no longer be able to do so. Instead, they must abide by the government’s
own calculation, in effect, of the sales that they achieved. As such, the policy has potential to
enhance non-tax state revenue (PNBP) from the mining sector – especially as Lahadahlia has
introduced it conjunction with the updated policy on foreign exchange earned from resource
exports (DHE). However, the increasingly meticulous regulation of the resource sector will
also depress investor sentiment and hold back growth.

JUSTICE
After a four-month wait, the trial of former Trade Minister Tom Lembong commenced
on 6 March. Prosecutors from the Attorney General’s Office (AGO) claim that Lembong
caused Rp578 billion in losses to the state due to his importation of sugar in 2015-16. Among
the allegations, they say that he wrongfully permitted a private company to import sugar,
while also approving imports by a state firm that misused the product. Lembong disputes the
AGO’s calculations and denies any wrongdoing.

Indonesia’s sugar market features a high degree of regulation. Industrial capacity was huge a
century ago, and protection has been in place for decades to protect ageing factories that
compete poorly with modern producers elsewhere in the world, such as in Brazil. Domestic
industries source sugarcane from farms, mostly in East Java. These refineries produce
‘standard sugar’ (gula krystal putih or ‘GKP’), which is for sale on the domestic market,
primarily through traditional ‘wet’ markets. Farm production has been stagnant for many
years and therefore annual deficits occur between domestic production and domestic
household demand.

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 REFORMASI WEEKLY REVIEW – 10 March 2025

Meanwhile, Indonesia’s sizeable food-and-beverage (F&B) industry absorbs vast quantities of

sugar, which must be a higher-quality ‘refined sugar’ (gula krystal rafinasi or ‘GKR’).
However, these F&B producers must purchase GKR from domestic refineries – which, in
turn, make it using imports of raw sugar (gula krystal mentah or ‘GKM’).

At the time that Lembong served as minister, various regulations – established through
ministerial decrees – government what type of company could import which type of sugar.
Only state firms could import GKP, while both state and private firms could import GKM.
However, private firms had to confer their GKM strictly for use by F&B industries – not
consumers. Since Lembong’s tenure, these rules have changed, but prosecutors are
nonetheless faulting him for supposedly violating the pre-reform framework.

Sugar Imports, 2015-16: Importers & Partners

Partnering Cooperatives
Executives Named Suspects Company (PT) Rpbn* SKKP TNI-Polri/
PPI Inkopkar Inkoppol
Puskoppol
Tony Wijaya NG Angels Products 144 √ √ √
Hans Falita Hutama Berkah Manis Makmur 75 √ √ √
Surianto Eka Prasetyo Makassar Tene 31 √ √
Hansen Setiawan Sentra Usahatama Jaya 37 √ √
Indra Suryaningrat Medan Sugar Industry 65 √ √
Eka Sapanca Permata Dunia Sukses 26 √ √
Hendrogiarto Atiwow Duta Sugar International 41 √
Ali Sandjaja Boedidarmo Kebun Tebu Mas 48 √
Ramakrishna Prasad Murthy Dharmapala Usaha Sukses 6 √
* Value of sugar imports
SKKP TNI/Polri = Military & Police Personnel Welfare Cooperative; Inkopkar = United Workers
Cooperative;
Inkoppol = United Police Cooperative; Puskoppol = Central Police Cooperative

Prosecutors say that Lembong wrongfully issued a permit in late 2015 for a private company,
PT Angels Products (AP), to import a relatively small quantity of 105,000 tons of GKP. The
objective was to stabilize domestic sugar prices in the early part of 2016. Prosecutors
maintain that Lembong neglected to properly coordinate with related entities prior to issuing
AP’s permit, and that it should have been a state firm doing the importing (it became legal in
2020 for private firms to import GKP).

Additionally, Lembong permitted a state firm, PT Perusahaan Perdagangan (PPI), to import

300,000 tons of GKM in early 2016, for refining into GKP. However, PPI was not the normal
state firm that conducted such imports. As such, the company relied on other companies to
refine the GKM – and it turned to eight different private-sector operators to perform the
refining. Because these operators only possessed permits to refine sugar for use by industries
– not consumers – none of the resulting GKP was eligible for National Standard (SNI)
certification. As a result, delays persisted until the GKP could undergo distribution to
consumers in the market; in the interim, domestic sugar prices had soared due to shortages.

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 REFORMASI WEEKLY REVIEW – 10 March 2025

In their case against Lembong, prosecutors say that PPI allowed private refiners to sell sugar
at Rp16,000 per kilogram, while the government’s guideline price for farm-gate purchase was
Rp13,000 per kilogram – and therefore this entailed losses to the state. Lembong’s attorney
argued that this is a senseless basis for calculations. He pointed out that the imports were
happening because supplies from farmers were inadequate and a shortage prevailed –
therefore comparing PPI’s selling price to the government guideline price is inappropriate.

Lembong’s attorney also points out that prosecutors claimed losses to the state based on an
audit from the State Development Audit Agency (BPKP). However, they did not attach the
BPKP report to their court filings. Moreover, the attorney notes that the Trade Ministry’s
sugar imports during Lembong’s tenure had already received a clean audit result from the
State Audit Agency (BPK). According to the 2004 State Treasury Law, with a clean audit
report in place, there is no basis for performing an additional audit. Critics of the government
have pointed out that, in contrast to the independent BPK, the BPKP is under the direct
control of the president.

The attorney also points out that Lembong’s actions had been standard practice in the
ministry. Prosecutors have not established whether or how he derived any benefit.

ANALYSIS: Lembong’s case garners a high profile because he stood out last year as a
prominent critic of President Widodo and his ally at the time, Prabowo. The case against him
– which has embroiled other executives from the various sugar companies – may be a form of
retribution for his political stance. However, because Lembong’s actions were standard
procedure in the ministry for many years prior and after his tenure, his conviction would
demonstrate to other past trade ministers that they, too, are susceptible to imprisonment if the
government chooses to examine their past decision-making. These figures include Zulkifli
Hasan, currently the chair of the National Mandate Party (Pan). In the effect, the Lembong
case can serve as a means to ensure that Pan remains obedient.

DISASTERS
Flooding severely affected several areas of West Java, including the Jakarta suburb of
Bekasi and the southern district of Sukabumi, among others. The flooding began early on
5 March and had largely receded by 7 March. President Prabowo Subianto visited a flooded
neighborhood in Bekasi accompanied by Cabinet Secretary Teddy Wijaya. They distributed
food packets for Ramadhan fast-breaking.

In Bekasi District, flooding of 30 centimeters or more affected 19 of the region’s

23 sub-districts. This inundated a total of 56 communities with 87,000 residents. Flood
levels reached 2.3 meters in Cikarang Utara. In neighboring Bekasi Municipality, floods
affected 61,000 people.

In Sukabumi, 26 sub-districts suffered flooding, with at least three deaths. These included a
mother and child in the coastal community of Pelabuhan Ratu: water filled their home and a

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 REFORMASI WEEKLY REVIEW – 10 March 2025

current carried them away. Five others remain missing. A bridge in Simpenan, a community
south of Pelabuhan Ratu, requires rebuilding.

In Puncak, on the north slope Gunung Panggrango, flooding destroyed two amusement parks
– Eiger Adventure Land and Hibisc Fantasy. Buildings and structures collapsed due to flash
flooding, but few injuries occurred.

Authorities acknowledged that the sites had altered the landscape of a steep slope, using an
area that vastly exceeded the amount allocated to them in their land-use permits. West Java’s
new governor, Gerindra’s Dedy Mulyadi, visited the location to inspect the damage. Photos
showed him having gone limp, his head sagging, as conveyed a show of grief and despair at
the scene. Local residents responded to the event by forcibly taking over pieces of heavy
equipment and destroying the remaining structures at the sites. Reports said that the residents
sought to carry out the governor’s order to remove all edifices and restore the site as a forest
area; they voiced skepticism that such work would actually happen if left to officials.

An expert from the Research and Innovation Agency (Brin), Yus Budiono, explained that the
flooding in West Java was fluvial, due to upland rainfall that caused rivers to overflow their
banks. He attributed chronic flooding in Bekasi to overdevelopment in higher elevations,
combined with insufficient drainage and reservoirs.11

In Riau on Sumatra, flooding inundated the capital, Pekanbaru. The Siak River
overflowed and affected 17,000 residents. The head of the regional Disaster Response
Agency (BPBD) said that flooding hit a total of 12 sub-districts located across five districts
and municipalities: Rokan Hulu, Pekanbaru, Kampar, Indragiri Hulu and Kuantan Singingi.

The opinions contained in this document are not for public consumption or dissemination, but rather for the express use of
the private clients who have requested this service. The information contained in this document is gathered from sources
believed to be reliable and correct, but no warranty is made as to the accuracy or fairness of the information herein. No
liability whatsoever will be accepted for the fairness of the contents hereof by the Reformasi Weekly Review, PT Reformasi
Info Sastra, or the author. This document is not to be forwarded without the prior approval of PT Reformasi Info Sastra.

11
Jawa Pos, “Brin Ungkap Penyebab Banjir Jakarta dan Bekasi,” 9 March 2025, p. 4.

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