Indonesia's new export plan revives a warning from the 1990s

In May 2026, President Prabowo Subianto announced a "single-door" export policy. Sales of three key products, palm oil, coal, and ferroalloys (metals used to make steel), must now pass through one state-owned company, PT Danantara Sumberdaya Indonesia. The government says this will stop illegal mining, bring in more state income, and cut fraud and money that leaks out of the country. Writing for Indonesia at Melbourne, the author says the plan looks a lot like a failed experiment from the Suharto years. Investors seemed to share the doubt: the Jakarta stock market fell more than 2 percent on the day it was announced.

The warning comes from the clove monopoly of the 1990s, run by an agency called BPPC. A monopoly is when one seller controls a market. This was closer to a monopsony, where one buyer decides who can sell and at what price. The agency was led by Suharto's son, Hutomo "Tommy" Mandala Putra, and it promised to protect clove farmers with fixed minimum prices. Instead, farmers lost the power to bargain, the price they actually received fell sharply, and some growers in Aceh gave up their trees. The state had to rescue the scheme with about Rp 569 billion in central bank credit, plus more in commercial loans, before shutting it down in 1998.

The concern today is the structure, not the crop. When one company controls a market, has wide freedom to decide, and faces weak checks, the result is often corruption. The author points to a simple formula from the economist Robert Klitgaard: monopoly plus discretion minus accountability equals corruption. The new rules take effect at once, but the bodies meant to watch over them may not be ready until January 2027.

Why it matters

If you farm, mine, or trade these products, your buyer and your price may soon be set by one state company instead of the open market. The history here is not comforting: the last time Indonesia tried this, small farmers lost the most, and the plan still needed public money to survive. The gap until oversight begins in 2027 is the risky part, when a large flow of value passes through one door with few people watching.