# Indonesia Political Risk 2026 Policy errors under President Prabowo Subianto made Indonesia one of the worst markets of 2026. Consumer stocks are now cheap.^[From [[Key Themes in Asia - Fritzell Oct 2026]], slides 41-46] ## The missteps - "Patriot bonds" at only 2%, sold to win favour with the government. - A state-owned entity took farmland. - Finance minister Sri Mulyani, a fiscal conservative, was fired. A family member took the post. - A government monopsony will control all coal, palm oil and nickel exports. - The new sovereign wealth fund, Danantara, took over all SOEs. Prabowo controls it. - MSCI threatens to cut Indonesia from emerging to frontier. ```mermaid flowchart LR POL["State control<br/>bonds, land, exports, SOEs"] --> TRUST["Investor trust falls"] FIN["Conservative finance<br/>minister fired"] --> TRUST TRUST --> MSCI["MSCI frontier<br/>downgrade risk"] MSCI --> OUT["Foreign selling"] OUT --> CHEAP{{"Cheap consumer stocks"}} ``` ## The value case - Consumer stocks fell hard since 2024: - Sumber Alfaria Trijaya: -57%. - Avia Avian: -27%. Fritzell owns it. - MAP Aktif Adiperkasa: -20%. - Astra International: -19%. - Indonesia CAPE is 15. See [[East Asia vs Southeast Asia Divide]]. - Fritzell places Indonesia in the last phase of the [[Marc Faber Asian Market Cycle]]. > [!question] > Is the political risk priced in, or is a frontier downgrade still ahead? ---- tags: #boat #investing #geopolitics links: [[Asia Macro MOC]] [[East Asia vs Southeast Asia Divide]] [[Geopolitical Capital Flows]]