Beyond ‘Watch and Catch’: Securing the Future and Reclaiming Indonesia’s AI Sovereignty
As Indonesia approaches the finalization of the 2026 Presidential Regulation (Perpres) on Artificial Intelligence (AI), a fundamental tension has surfaced. On the surface, the narrative is one of Digital Sovereignty—the noble goal of ensuring Indonesia becomes a producer, not just a consumer of intelligence. However, beneath this surface lies a troubling “Watch and Catch” regulatory culture that threatens to undermine national AI ambitions.
The Stakes in the Services Sector
The stakes could not be higher in the services sector, which is the engine of Indonesia’s modern economy. From banking to logistics, AI presents opportunities for significant productivity leaps. Yet, the current regulatory approach treats innovation as a liability to monitor rather than an asset to nurture.
The Price of “Compliance Anxiety”
The “Watch and Catch” mentality is characterized by reactive policing. Instead of establishing clear “Safe Harbors” for businesses to test and refine algorithms, a “Compliance Cage” is being constructed. For example, a logistics provider or retailer employing AI for predictive analytics must navigate a complex web of overlapping authorities. They face scrutiny from the Ministry of Communication and Digital for data ethics, sector-specific regulators for operational issues, and potential penalties under the Personal Data Protection (PDP) Law for algorithm outcomes still in testing.
This leads to a devastating Data Paradox: while Indonesia has one of the world’s largest and most diverse datasets, there is a lack of actionable insights, resulting in a brain drain of talent and capital. For every AI startup in Jakarta, there are approximately twelve in Singapore. Innovators are not leaving due to a lack of patriotism; they seek environments that offer a “Partner and Prosper” framework, while Indonesia remains trapped in a “Watch and Catch” loop.
The Sovereign Cost of Ego Sektoral
A significant threat to Indonesia’s digital sovereignty stems from Ego Sektoral or ministerial fragmentation. An AI application in the services sector could fall under the conflicting jurisdictions of multiple ministries, including the Ministry of Communication and Digital (Komdigi) and the OJK.
This fragmentation not only hampers business operations through bureaucratic layers but also creates a compliance burden that diminishes Indonesia’s competitiveness. While neighboring countries like Singapore and Malaysia push for harmonized AI governance, Indonesian service providers often find themselves “pingponged” between different agencies, each with its own conflicting rules. Without a National AI Office to unify these standards, Indonesia risks handicapping its champions while the global landscape evolves.
A Roadmap for Reform
To transform the upcoming Perpres A2026 into a guiding compass rather than a restrictive cage, three critical reforms are essential:
- Institutionalize ‘Safe Harbors’: Legal immunity must be provided for businesses engaging in National AI Sandboxes, encouraging reporting and remediation of errors. Innovation requires the “right to be wrong” during development, and sandboxes should serve as laboratories for “fast failure” rather than preliminary compliance tests.
- Establish Data Trusts: Transition from “Data Ownership” to “Data Stewardship” by pooling anonymized public data into neutral, independent Data Trusts. This will provide local developers with the necessary raw material to build authentically Indonesian AI models.
- Harmonize through a Unified Office: Indonesia needs a single compliance authority that harmonizes requirements from various ministries into a unified certification process, significantly reducing the compliance burden and allowing businesses to prioritize engineering over bureaucracy.
The Verdict
Digital sovereignty cannot be achieved through restrictions; it is earned through empowerment. If Indonesia continues to prioritize catching mistakes over fostering breakthroughs, it risks becoming a digital colony—where foreign AI operates on local data, capturing value abroad.
The government must aim to “Regulate for the Future, not for Control.” By focusing on punitive measures, the authorities will only catch smaller players with limited options, while larger innovators will relocate to more supportive environments.
The Perpres 2026 is an opportunity to decide whether Indonesia will be a spectator in the AI revolution or a leader in it. Moving beyond a “Watch and Catch” culture to a “Partner and Prosper” mindset is crucial. Regulation should not be a cage but rather a compass guiding the way. Only then can Sovereign AI become more than a slogan; it can become the engine of Indonesia’s digital economy and a cornerstone for securing the nation’s future.
