Indonesia’s Resource Sector Escapes Mass Protests Amid Political Unrest

Political Unrest and Its Impact on Indonesia’s Resource Sector

Indonesia faces its worst political unrest in nearly 30 years, with violent protests triggered by a new housing allowance for parliament members. The demonstrations began in Jakarta and quickly spread to major cities, fueled by economic slowdown and rising living costs. Indonesian stock markets dropped nearly 4% on September 1 before rebounding, while the rupiah weakened against the dollar. However, the unrest remains largely confined to urban areas and has not disrupted the country’s vital commodity production.

Indonesia’s Resource Sector Resilience Amid Protests

Despite the turmoil, Indonesia’s resource sector remains unaffected. The nation is a top global producer of coal, nickel, palm oil, fertilizers, and liquefied natural gas (LNG), all critical to global commodity markets. Industry insiders confirm fertilizer production continues smoothly. Foreign investors, particularly from China—which plays a significant role in Indonesia’s booming nickel industry—are not targeted by the protests. This stability in Indonesia’s resource sector helps maintain supply chain confidence even as political challenges persist.

SuperMetalPrice Commentary:

Indonesia’s resource sector resilience amid political unrest signals strong fundamentals underpinning commodity production. While urban protests highlight social and economic tensions, the lack of disruption in mining and agriculture sectors reassures global markets. Indonesia’s strategic importance in nickel and coal markets remains firm, especially as the government pushes for oil production growth and food security under President Prabowo Subianto. Investors should monitor policy shifts closely, but for now, supply-side risks appear limited.