The Ripple Effects of Indonesia’s Ongoing Parliamentary Protests on International Business

Indonesia, Southeast Asia’s largest economy, is witnessing one of its most significant waves of demonstrations in recent years. What began as outrage over lavish parliamentary allowances has grown into a nationwide movement fueled by anger at inequality, economic hardship, and state repression. With thousands of students, workers, and civil society groups mobilizing, the protests have spilled beyond Jakarta, shaking the political landscape. But if these demonstrations stretch on for weeks—or even a month—the impact will not remain within Indonesia’s borders. International business markets will feel the ripple effects.

Political instability and Investor Confidence

Protests lasting a month or more may weaken global investor confidence in Indonesia. Multinationals and foreign direct investors (FDI) frequently prioritize political stability over market opportunity. With 580 members of parliament under fire for earning huge housing allowances while ordinary Indonesians confront rising living costs, overseas investors see a growing gap between elites and the general people.

If the violence worsens, international firms may postpone new projects or shift investments to other ASEAN neighbors such as Vietnam, Malaysia, or Thailand, which may appear more stable. A prolonged legitimacy issue in Jakarta may decrease Indonesia's attractiveness as an investment destination.

Financial Market Volatility

• Financial markets are particularly vulnerable to extended chaos. A month of demonstrations may cause major volatility:
• Rupiah Depreciation: Political uncertainty is likely to weaken the Indonesian rupiah, as investors seek safer currencies.
• Stock market sell-offs: International funds may flee Indonesian shares, lowering the Jakarta Composite Index.
• Bond Market Pressure: Investors would demand higher Indonesian bond yields, signifying risk and increasing the government's borrowing costs.

This dynamic generates a loop in which deteriorating investor sentiment puts more pressure on markets, increasing the appearance of instability.

Supply Chain Disruption and Metals

Indonesia's contribution to global supply chains cannot be emphasized. Prolonged turmoil threatens the flow of products into and out of the country.

• Nickel: As the world's largest nickel producer, interruptions in Indonesia might raise global prices. This has a direct impact on the electric vehicle (EV) industry, which uses nickel for batteries.
• Palm Oil: Indonesia is the world's leading exporter of palm oil, which is crucial to the global food, cosmetics, and biofuel industries. Protests that block transportation routes or ports may raise costs and generate shortages elsewhere.
• Coal and rubber: Delays in coal shipments would harm Asian energy markets, while interruptions in rubber exports would have an impact on global industries, particularly automotive.

A month of continuous disturbance might result in instability in multiple companies.

Multinational corporations based in Indonesia

Toyota, Samsung, Unilever have a large presence in Indonesia. If regarded as siding with elites, they would face rising operational risks, including labor strikes and facility interruptions, as well as reputational repercussions. Multinationals may be required to pay more on:

• Political risk insurance
• Employee Security Measures
• Contingency plans and alternate supply lines

These additional expenses would make Indonesia a more costly and unstable environment to operate.

Regional and Global Perception

Sustained chaos in Indonesia may change perceptions of ASEAN's overall stability. Indonesia, as the region's largest economy, plays an important role in luring supply chain investments to Southeast Asia. If the ongoing protests mirror the chaos of the late 1990s Asian Financial Crisis, investors may doubt the reliability of ASEAN markets in general.

Notes 

From everything I've written, this is a serious threat to the Indonesian economy, from a security perspective to a trade perspective, this can already be considered a threat to all Indonesian people. The goal of these protesters is to express all existing issues and the injustice of the way decisions are made. Hopefully, with the protesters and activists taking to the streets, they will be given ease and safety in upholding justice from the community to the people's representatives.