Indonesia’s financial markets took a hit amid intensifying political and social unrest, as growing public discontent over surging living expenses, controversial parliamentary benefits, and allegations of police brutality weighed on investor confidence in Southeast Asia’s largest economy.
The Jakarta Composite Index tumbled by as much as 3.6% on Monday, but managed to pare some losses to close with a 1.2% drop. Meanwhile, the rupiah slid to 16,500 per U.S. dollar—marking its weakest level in nearly a year, according to LSEG data. The market selloff came against a backdrop of widespread protests that have convulsed the capital, Jakarta, and other cities, with demonstrators venting frustration over escalating costs and political grievances.
Tensions escalated sharply this week following reports that members of parliament receive generous housing allowances worth 50 million rupiah ($3,000) per month—almost ten times the local minimum wage in Jakarta, and far higher compared to many regions across the archipelago. The revelations about lawmakers’ perks have amplified resentment at a time when many Indonesians struggle with daily expenses.
Public anger turned to outrage after a viral video showed a motorcycle taxi driver fatally struck by a police vehicle while delivering food near the parliament building, sparking further protests and violent clashes. The incident has become a focal point for anti-government anger, with demonstrators demanding affordability and accountability.
President Prabowo Subianto, in a bid to restore order, addressed the nation on Friday urging calm and appealing for public trust in the government. However, the violence that erupted as riot police responded to rock-throwing and fireworks-firing demonstrators highlights deeper, simmering discontent.
The latest upheaval follows months of mounting economic and political pressures, underscoring challenges facing Indonesia’s leadership as it seeks to maintain stability and reassure investors sensitive to unrest.
