Jakarta, Indonesia – The escalating conflict between the United States, Israel and Iran is reverberating far beyond the Middle East, prompting growing concern in Indonesia about its potential economic and political ramifications. Whereas President Prabowo Subianto’s administration has maintained a neutral stance, calling for de-escalation, domestic pressure is mounting for a more assertive response, particularly regarding Indonesia’s involvement with the US-led Board of Peace (BoP). The situation presents a complex challenge for Jakarta, balancing its burgeoning strategic partnership with Washington and its traditional role as a leading voice for the Muslim world.
The recent barrage of Iranian missiles targeting neighboring Gulf states, a direct response to a coordinated strike by the US and Israel on Iranian cities on February 28th – an attack that tragically resulted in the death of Iranian Supreme Leader Ayatollah Ali Khamenei – has significantly heightened tensions. This escalation has triggered a reassessment within Indonesia of its foreign policy priorities and its commitment to multilateral initiatives like the BoP, initially intended for post-war reconstruction in Gaza. The conflict’s potential to disrupt global energy markets and exacerbate existing economic vulnerabilities is a key concern for Southeast Asia’s largest economy.
Economic Vulnerabilities and Energy Security
Indonesia’s economic resilience is particularly vulnerable to disruptions in the global energy supply. Experts warn that escalating tensions in the Middle East, especially around critical chokepoints like the Strait of Hormuz, could lead to a significant increase in oil prices. According to data from the Indonesian Ministry of Energy and Mineral Resources, the nation remains heavily reliant on oil imports, with domestic reserves sufficient to cover only approximately 20 days of national consumption. Tempo.co reports that this limited buffer makes Indonesia particularly susceptible to price shocks and supply disruptions.
The potential for a broader economic crisis is a central concern. Tia Mariatul Kibtiah, a lecturer in International Relations at Binus University, highlighted this risk during a recent webinar hosted by the Institute for Strategic Transformation (IFORSTRA). Kibtiah emphasized the potential for escalating conflict to trigger a wider economic downturn, impacting Indonesia’s micro and small enterprises, which form the backbone of the nation’s economy. The impact on the Indonesian Rupiah and foreign investment flows are also significant considerations.
Diplomatic Challenges and the Board of Peace
Indonesia’s diplomatic position has develop into increasingly delicate. The government, through the Ministry of Foreign Affairs, has consistently advocated for a neutral stance, emphasizing its commitment to an independent and active foreign policy. Santo Darmosumarto, the Director General of Asia Pacific and Africa at the Ministry, stated that Indonesia aims to act as an “honest broker” rather than taking sides in the conflict. As reported by Tempo, this approach is rooted in the constitutional mandate to participate in maintaining world order.
However, this neutrality has drawn criticism from some quarters, particularly from Islamic communities and lawmakers who believe Indonesia should take a stronger stance against the US and Israel. The decision to join the Board of Peace, a US-led initiative, has also come under scrutiny. Iran reportedly rejected Indonesia’s offer of mediation and voiced criticism of Jakarta’s participation in the BoP, viewing it as aligning with the US and Israel. This diplomatic rebuff underscores the challenges Indonesia faces in navigating the complex geopolitical landscape.
Lawmakers are calling for a reassessment of Indonesia’s involvement with the Board of Peace. TB Hasanuddin of the Indonesian Democratic Party of Struggle (PDI-P) argued that continued participation could compromise Indonesia’s “free and active” foreign policy and be interpreted as tacit approval of aggression against a sovereign state. He urged the government to “immediately take steps to withdraw” from the BoP, as reported by Channel NewsAsia. Oleh Soleh, a lawmaker from the National Awakening Party (PKB), echoed this sentiment, calling for sanctions against Israel and the US.
Internal Security Concerns and Social Polarization
The conflict in the Middle East is also raising concerns about potential internal security risks within Indonesia. The death of Ayatollah Ali Khamenei sparked condolences and protests in Jakarta, as evidenced by a gathering in front of the Iranian Embassy on March 1, 2026, reported by Tempo.co. The government has responded by placing the military on alert, with reports indicating a “siaga tiga” (level three) status to anticipate potential mass demonstrations. This heightened state of readiness reflects concerns about the possibility of social unrest and polarization fueled by the conflict.
M. Syauqillah, Director of the Institute for Strategic Transformation and an expert on terrorism, warned of the potential for extremist groups to exploit the situation and incite violence. The conflict could exacerbate existing ideological divisions within Indonesia, potentially leading to increased radicalization and recruitment by extremist organizations. Maintaining social cohesion and preventing the escalation of tensions within the country are therefore critical priorities for the government.
A Complex Conflict and Asymmetric Warfare
Analysts describe the current conflict as an asymmetric war, characterized by a significant disparity in military capabilities between the US and Israel on one side, and Iran on the other. M Syaroni Rofii, a lecturer in National Resilience at the University of Indonesia and a Middle East observer, noted the contrast between the conventional military strength and nuclear capabilities of the US and Israel and Iran’s reliance on advanced drone technology. He suggested that the conflict may be aimed at regime change in Iran.
The limited role of the United Nations and the cautious approach adopted by China and Russia further complicate the situation. With major international actors largely sidelined, Indonesia is being encouraged to pursue a “shuttle diplomacy” approach, positioning itself as a neutral mediator and a strategic actor on the global stage. This would involve engaging in direct dialogue with all parties involved in the conflict, seeking to de-escalate tensions and promote a peaceful resolution.
Indonesia’s Potential Role in Mediation
Indonesia’s long-standing tradition of non-alignment and its strong relationships with countries across the Middle East could position it as a credible mediator. Its membership in the Organization of Islamic Cooperation (OIC) and its historical role in promoting interfaith dialogue further enhance its potential to facilitate negotiations. However, successfully navigating this role will require careful diplomacy and a willingness to engage with all parties, even those with whom Indonesia has strained relations.
The government’s three-pronged approach – issuing statements calling for de-escalation, intensifying diplomatic communication with regional countries, and maintaining a neutral stance – represents a cautious but deliberate strategy. Whether this approach will be sufficient to mitigate the risks and capitalize on the opportunities presented by the conflict remains to be seen.
The situation remains fluid and unpredictable. The potential for further escalation, the impact on global energy markets, and the internal security implications for Indonesia all demand close monitoring and proactive engagement. The coming weeks will be critical in determining the long-term consequences of this conflict for Indonesia and the wider region.
The next key development to watch will be the outcome of ongoing diplomatic efforts led by regional and international actors, particularly any potential meetings or negotiations aimed at achieving a ceasefire or de-escalation. Readers are encouraged to follow updates from reputable news sources and engage in constructive dialogue about the implications of this evolving crisis. Share your thoughts and perspectives in the comments below.