On 23 March 2026, the US Federal Communications Commission (FCC) effectively banned foreign-made consumer routers from the American market. The ban targets Chinese manufacturers, but it catches every foreign producer — including Indonesia, which exported USD 43.6 million worth of routers to the US in 2025. This post looks at what happened, why Indonesia’s router exports to the US have been on a rollercoaster since 2021, and what the FCC ban means going forward.
Supplementing our Survey of Recent Developments in BIES with additional visualizations on government spending, primary expenditure, and revenue.
I recently finished Michael Pettis’s book “The Great Rebalancing: Trade, Conflict, and the Perilous Road Ahead for the World Economy.” The book discusses global economic imbalances caused by differences in savings and consumption rates between advanced and developing countries. Pettis argues that these imbalances could trigger a global economic crisis if left unaddressed.
I’m one of the regular readers of tweets by Haryo Aswicahyono, who often talks about economics. Just the other day, he tweeted mainly about how rice prices remain high, even though there’s an abundant supply. Here’s the tweet:
I just finished reading Ray Dalio’s book titled How Countries Go Broke, which illustrates how nations fall into debt crises. It starts with the premise that the United States is currently facing a massive debt problem, which Dalio sees as entering the final stage of what he calls “The Big Debt Cycle.” This debt problem is driven not only by budget deficits but also by interest rates and inflation—which have remained super low since the 2000s—making debt easy to roll over. Because interest rates were kept so low, the U.S. (and other advanced economies) got too relaxed and addicted to borrowing. But after COVID-19, interest rates in developed countries started rising again, forcing the U.S. to reconsider how sustainable its debt truly is.
It was quite surprising yet interesting when I watched the press conference by the National Economic Council (DEN) some time ago. The reason was that Luhut Binsar Panjaitan (LBP), the DEN chair, gave the spotlight to Professor Arif Anshory Yusuf (AAY) to present a teaser of his ex-ante model results on the impact of the Free Nutritious Meals program (MBG) on the economy. According to AAY, MBG has the potential to create 1.9 million jobs and reduce poverty by up to 5.8%. MBG, he said, is equivalent to giving IDR 600,000 per family if the average number of children in poor families is 3. This figure is 3x larger than PKH! He also added that to realize the maximum impact of MBG, “leakage” of food demand “that does not need to be imported” should be minimized by prioritizing domestic products. Those numbers sound off.
Recently, there have been many reports about the weakening of Indonesia’s middle class. The middle class in Indonesia has been shrinking since 2018 and now makes up only 17% of the total population. However, consumption growth often relies on the middle class. Unsurprisingly, Indonesia’s consumption growth has long lagged behind that of other countries in the region, except Thailand.
Some time ago, my colleague Anton and I were invited to chat on the Indah G Show platform. It was a casual, mostly spontaneous conversation. Unfortunately, in these impromptu settings, I often don’t have data memorized, and there’s no opportunity to check data – or at least doing so would break the flow. Quite different from chatting on Twitter, which is asynchronous.
Indonesia has recently been buzzing about five consecutive months of deflation. Some analysts like INDEF have argued this signals weakening purchasing power among the middle class. But Finance Minister Sri Mulyani considers it not a serious concern because core inflation (inflation excluding food and energy prices, which tend to be volatile) on a month-to-month basis is still positive.
Since the events in Ukraine and Palestine, I have been following John Mearsheimer more closely – a professor of international politics. He is a “realist.” In international politics there are several schools of thought, which I admittedly don’t understand deeply. But the gist, according to Prof. Mearsheimer, is that “realism” holds that what matters in inter-state relations is relative power. That is, what counts is how strong our country is compared to our neighbors. This arises from the belief that above the state, there is no higher institution that will protect it if attacked by another state. Therefore, our country must be stronger than the rest.