Indonesia Remain a Calm Anchor Amid Middle East Volatility
By Teguh Anantawikrama
Vice Chairman, Indonesian Chamber of Commerce;
Chairman for MSME Development, HIPPI;
Founder, Indonesian Tourism Investor Club
INVESTORTRUST - The world is watching with unease as U.S. strikes on Iran’s nuclear sites push the Middle East closer to wider conflict. Overnight, oil prices have surged. Stock markets are rattled. Investors across Asia, too, are bracing for renewed geopolitical risk at a moment when the global economy is already navigating fragile recoveries.
Yet amid the tension, Indonesia’s response must be clear, calm and rooted in the pragmatism that has served us well for decades.
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Neutral Diplomacy, Real Economic Exposure
Indonesia has long upheld a free and active foreign policy, engaging the world but aligning with none. President Prabowo Subianto has reaffirmed this commitment to non-alignment and stability. Our foreign ministry is working closely with regional partners and the Organization of Islamic Cooperation to advocate de-escalation.
However, while Indonesia does not choose these conflicts, we do feel their impact deeply through our energy exposure. Indonesia is Southeast Asia’s largest economy — but over half our oil supply is imported. Any prolonged surge in global crude prices will increase subsidy burdens, raise inflationary pressures, and pose policy challenges for our central bank and fiscal authorities.
Strengthening Resilience Must Be Our Priority
Having worked closely with micro and small businesses, tourism investors and rural communities, I see clearly where such shocks hit hardest: fuel costs strain transport and logistics; logistics costs raise food prices; food inflation tests household resilience.
To manage this effectively, our immediate steps must be practical and transparent:
-Expand domestic energy security — accelerating biofuel deployment and domestic gas production to reduce dependence on volatile imports.
-Keep subsidies targeted and efficient — protecting the most vulnerable while containing fiscal slippage.
-Use commodity windfalls wisely — higher revenues from coal and palm oil must help cover rising energy costs, not feed wasteful spending.
-Communicate clearly — so markets and the public trust that monetary and fiscal responses remain credible.
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A Responsible Regional Partner
In the ASEAN context, Indonesia’s steady hand matters. In times of global turbulence, the region looks to its largest economy to maintain a stable currency, healthy domestic demand and open trade flows. This is vital not just for our 280 million citizens, but for supply chain continuity and investor confidence across Southeast Asia.
Diplomatically, Indonesia should continue to work quietly behind the scenes to support any initiative that reduces the risk of further escalation in the Middle East. Our credibility as a moderate Muslim-majority democracy gives us a unique voice at this time.
Business Must Adapt, Not Panic
I encourage our private sector and investors not to overreact. Review your exposure, hedge risks where prudent, but do not doubt Indonesia’s fundamentals: a young consumer base, robust commodity buffers, and a government committed to stability.
If history teaches us anything, it is that Indonesia emerges from shocks more resilient, not more fragile.
Calm Leadership is Our Best Shield
Geopolitical headlines come and go. It is the choices we make in response that define our resilience.
In this moment of uncertainty, Indonesia’s unity, pragmatism and steady policy are once again our best safeguards — and our greatest contribution to ASEAN’s broader economic stability. ***