‘They are trying to intimidate us’: Indonesia’s Prabowo remains defiant in the face of an MSCI double downgrade

Indonesian President Prabowo Subianto has firmly stated that his country will not be "intimidated" by MSCI's proposal to downgrade Indonesia's market status. Speaking to his cabinet, Prabowo declared, "Our country continues to face all sorts of disturbances, including the MSCI. They are trying to intimidate us. I simply want to tell MSCI: the Indonesian nation fears no one and will never back down."

Prabowo emphasized his nation's strength and readiness to make sacrifices, adding, "We have the strength, the courage and we are willing to make sacrifices, and we refuse to surrender."

MSCI's potential downgrade of Indonesia to "standalone" status, alongside Argentina, Nigeria, and Ukraine, stems from concerns over "continued suspected coordinated trading behavior and lack of evidence of meaningful enforcement." If confirmed, this move could lead to billions of dollars of investment fleeing the country, as many investors rely on MSCI's indexes for their fund allocations. A final decision on the downgrade is expected by the end of June 2027.

Indonesia has been under the threat of a downgrade for most of 2026, with MSCI previously considering a downgrade to "frontier" status in January. That downgrade threatened to pull up to $13 billion in passive investment flows from the country. Since the MSCI proposal, the Jakarta Composite Index has dropped by more than 10%, and the benchmark index has declined nearly 40% for the year.

The MSCI reclassification is just the latest challenge for Prabowo, who has been in office for three years and faces a declining approval rating of 44.5%, according to a recent poll. Public dissatisfaction over his economy and social policies, such as Indonesia's free meal program and village cooperatives initiative, has led to growing protests against his administration. Over 9,000 police officers were deployed in Jakarta this week, as Indonesians increasingly voice their discontent.