Insights

This article dissects the anatomy of systemic value extraction in Indonesia's capital markets through a detailed examination of financial engineering mechanisms that exploit regulatory deficiencies. The Indonesian Stock Exchange (IDX) has become an arena where sophisticated actors manipulate market structures through concentrated shareholding, offshore collateralization, and algorithmic trading strategies. These practices create dangerous feedback loops that disconnect stock valuations from underlying fundamentals, undermine market integrity, and ultimately transform capital markets from engines of economic growth into tools for value extraction. The phenomenon of "saham gorengan" (artificially inflated stocks) is particularly prevalent in low-float securities where price manipulation is facilitated by thin trading volumes and concentrated ownership. By analyzing the structural mechanisms of manipulation, algorithmic trading strategies, and regulatory frameworks, this article identifies critical enforcement gaps and proposes strategic reforms necessary to restore market integrity and realign capital markets with their intended economic purpose. The analysis draws on concrete cases from Indonesia and international markets, including the Jiwasraya scandal, Archegos collapse, and numerous instances of low float manipulation schemes that have severely impacted market integrity.

The recent implementation of the United States' universal and targeted tariffs has triggered unprecedented disruption in global trade dynamics, necessitating swift and strategic policy responses from export-oriented economies. This paper analyzes Indonesia's economic exposure to this "Global Tariff Shock 2025" and evaluates potential policy pathways to mitigate negative impacts while strengthening long-term economic resilience. Our analysis indicates that Indonesia's vulnerability extends beyond direct export exposure to the United States (9.8% of exports) to encompass broader systemic risks including global demand contraction, capital flight, and value chain disruptions. Through quantitative modeling and scenario analysis, we demonstrate that a coordinated dual approach—combining export market diversification with domestic fiscal stimulus through tax-side interventions—offers the most favorable balance of short-term stabilization and long-term resilience. Key findings suggest that reallocating 10-15% of non-mandatory government expenditure toward targeted tax cuts could activate domestic consumption without increasing sovereign debt, while strategic export diversification toward emerging markets could halve projected GDP losses. This paper outlines a comprehensive policy framework to transform external shock into structural opportunity, emphasizing the importance of maintaining Indonesia's strategic economic autonomy in an increasingly fragmented global trade environment.