Prabowo issues regulation appointing SOEs as sole exporters of key commodities

By Romel S. Gurky

President Prabowo Subianto on Wednesday announced the issuance of a new Government Regulation (PP) on the governance of natural resource commodity exports, under which state-owned enterprises (SOEs) will become sole exporters for strategic commodities including palm oil, coal and ferro alloys.

The announcement was made during Prabowo’s presentation of the Macroeconomic Framework and Main Fiscal Policy Directions (KEM-PPKF) for the 2027 State Budget Draft at a plenary session of the House of Representatives in Jakarta.

“Today, the Government of the Republic of Indonesia under my leadership is issuing a Government Regulation on the Governance of Natural Resource Commodity Exports,” Prabowo told lawmakers.

“The issuance of this government regulation is a strategic step to strengthen the governance of our natural resource commodity exports. The sale of all our natural resource products — beginning with palm oil, coal and ferro alloys — will be required to go through state-owned enterprises appointed by the Government of the Republic of Indonesia as sole exporters,” he said.

According to Prabowo, the policy is aimed at strengthening state oversight of commodity exports and eliminating long-standing illegal practices in the sector.

“The primary goal of this policy is to strengthen supervision and monitoring, as well as eradicate under-invoicing, transfer pricing practices and the flight of export foreign exchange earnings abroad,” he said.

He added that the policy is expected to optimize tax and non-tax state revenues from Indonesia’s natural resource sector.

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Prabowo said the designated SOEs would function as export marketing entities, while export proceeds would still be channeled back to the companies producing the commodities.

Through the mechanism, the government expects to improve transparency in export volumes, pricing and state revenues.

The President said the regulation forms part of broader efforts to ensure Indonesia’s natural resources are managed in line with Article 33 of the 1945 Constitution, which mandates that natural resources be utilized for the greatest prosperity of the people.

Prabowo also compared Indonesia’s new policy with export governance systems implemented in countries such as Saudi Arabia, Qatar, Algeria, Morocco, Ghana, Malaysia and Vietnam, which he said have exercised stronger state control over natural resource management.

“We cannot be naive, we cannot be gullible, and we cannot ignore common sense,” he said.

“We do not want our revenues to remain the lowest simply because we are not brave enough to manage our own assets — the assets of the Indonesian nation itself,” he added.

The government expects the regulation to strengthen oversight, improve efficiency and transparency in commodity exports, and increase Indonesia’s state revenues from the natural resources sector while reinforcing the country’s position in global commodity trade.

Editing by Reiner Simanjuntak