Indonesia’s jailing of Gojek founder raises fears for investor confidence

The jailing of 1 of Indonesia’s astir influential entrepreneurs successful a arguable corruption lawsuit has raised fears of harm to capitalist assurance successful Southeast Asia’s largest economy.

Nadiem Makarim, the cofounder of the fashionable super-app Gojek, was past period sentenced to 10 years successful prison for allegedly abusing his authorization portion serving arsenic the country’s acquisition minister.

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Makarim was recovered blameworthy of giving favourable attraction to Google, an aboriginal capitalist successful Gojek, erstwhile procuring Chromebook laptops for schoolchildren during the COVID-19 pandemic.

Prosecutors argued that Makarim, who served arsenic erstwhile Indonesian President Joko Widodo’s acquisition curate from 2019 to 2024, inflicted authorities losses of $120m, alleging that helium should person been alert the laptops would not enactment successful distant areas with mediocre net access.

Critics of the prosecution person argued that the lawsuit against Makarim lacks grounds and that the startup founder-turned-politician is the latest unfortunate of a run of governmental retribution being waged by the medication of Indonesian President Prabowo Subianto.

Nicky Fahrizal, a researcher of authorities and societal alteration astatine the Centre for Strategic and International Studies (CSIS) successful Jakarta, said overseas investors volition inevitably deliberation doubly earlier committing superior to Indonesia pursuing the verdict.

“The Nadiem case, on with a drawstring of akin incidents, has served arsenic a informing awesome to investors,” Fahrizal told Al Jazeera.

“For them, non-economic factors, specified arsenic ineligible certainty and the prime of the judicial system, are implicit prerequisites.”

Nadiem Makarim gestures aft being sentenced successful a laptop procurement corruption lawsuit astatine the Indonesian Court for Corruption Crimes successful Jakarta, connected June 30, 2026 [Tatan Syuflana/AP]

Makarim was recovered blameworthy by a sheet of 5 judges connected June 30, pursuing charges related to the procurement of much than 1 cardinal laptops intended for usage successful schools successful distant and impoverished areas.

At the proceedings held astatine the Indonesian Court for Corruption Crimes successful Jakarta, prosecutors alleged that Makarim deliberately tailored the tender specifications to favour Google, which invested successful Aplikasi Karya Anak Bangsa (AKAB), Gojek’s then-parent company.

Scrutiny of the tender process archetypal arose among the nationalist aft it emerged that the Chromebooks often did not enactment successful distant areas, raising questions astir however Google was chosen successful the archetypal place.

“Choosing a instrumentality that relies connected an net transportation amid uneven infrastructure… demonstrates a mismatch with needs…” Judge Sunoto said during the sentencing.

Following the verdict, authoritative Corneles Geeb Paulus hailed the result arsenic a triumph for “the schoolchildren whose rights were taken distant and who were deprived of equitable entree to integer acquisition crossed Indonesia”.

Google has denied providing oregon offering authorities immoderate inducements to triumph the tender.

The California-based tech giant, which has a marketplace worth of much than $4 trillion, was not indicted successful the case.

“From a ineligible standpoint, authorities look to person deed a partition successful their efforts to unafraid capable grounds and found the indispensable transgression nexus to prosecute the corporation,” the CSIS’s Fahrizal said.

“From a governmental perspective, Google is simply a tech elephantine with immense concern influence.”

Taking enactment against Google could person jeopardised the government’s ongoing digitalisation efforts, Fahrizal added, describing the institution arsenic “too large to fail” wrong the integer sector.

Trissia Wijaya, an Indonesian-born probe chap astatine the University of Melbourne’s Asia Institute, said Nadiem’s prosecution, coupled with the uncertainty of the concern situation nether Prabowo, would inevitably erode marketplace confidence.

“Regardless of whether Nadiem is really blameworthy oregon not, helium is simply a awesome of startups and marketplace optimism successful Indonesia, particularly successful the mid-2010s,” Wijaya told Al Jazeera.

“When Gojek started booming and gaining traction, Indonesia was 1 of the main people countries for planetary investors, some from the US and China, to put successful the fintech industry,” Wijaya added, describing Indonesia’s concern situation arsenic being astatine a “critical juncture.”

Indonesian President Prabowo Subianto gestures during a associated quality league with Singapore’s Prime Minister Lawrence Wong astatine the Merdeka Palace successful Jakarta, Indonesia, connected July 6, 2026 [Willy Kurniawan/Reuters]

Since taking bureau successful 2024, Prabowo has faced disapproval implicit his handling of the economy, including precocious levels of spending connected nationalist initiatives, specified arsenic his signature escaped luncheon programme, which is expected to outgo astir $15bn this year.

In June, the Indonesian rupiah deed an all-time debased against the US dollar, a nadir economical analysts partially attributed to investors’ scepticism astir Prabowo’s populist economical policies.

For his part, Prabowo has denied that helium is anti-business, portion emphasising that Indonesia indispensable uphold the regularisation of law.

“Some person claimed that I dislike overseas investors and volition thrust them away, but that is not the case. I person met galore investors who are readying to participate the market,” Prabowo told a league for young entrepreneurs successful the metropolis of Lampung past month.

“The authorities indispensable make a favorable situation for entrepreneurs, including the enforcement of the law. If the instrumentality is not enforced, what ensues is the instrumentality of the jungle… instrumentality based connected power, and successful the end, that is not bully for immoderate of us.”

‘Credibility’ of authorities policies

Siwage Dharma Negara, a co-coordinator of the Indonesia studies programme astatine the ISEAS-Yusof Ishak Institute successful Singapore, said Indonesia’s estimation arsenic an concern destination had already been successful diminution earlier the Makarim verdict.

“Investors are unsure astir the credibility of authorities policies, and they are unsure astir the credibility of institutions, whether executive, legislative, oregon judicial successful Indonesia,” Negara told Al Jazeera.

“Nadiem’s lawsuit is lone 1 origin that has damaged overseas capitalist confidence. But determination are galore different factors that contribute, including authorities policies that are progressively little pro-market.”

Teguh Yudo Wicaksono, an economics lecturer astatine Universitas Islam Indonesia successful Yogyakarta, said that though helium does not expect the lawsuit to person overmuch of an interaction connected overseas investment, it could deter Indonesian endowment based overseas from returning home.

“This could effect successful a encephalon drain and Indonesia losing talent,” Wicaksono told Al Jazeera.

Makarim attended Harvard Business School and Brown University successful the United States earlier returning to Indonesia successful 2006 and cofounding Gojek 4 years later.

In 2019, Gojek, which began arsenic a ride-hailing concern earlier evolving into a super-app that besides offers nutrient transportation and integer outgo services, became the archetypal Indonesian tech institution to execute a valuation of much than $10bn.

Drivers deterioration Gojek helmets during the Go-Food festival successful Jakarta, Indonesia, connected October 27, 2018 [Beawiharta/Reuters]

Not each observers spot the Makarim lawsuit arsenic a antagonistic for capitalist sentiment.

I Gusti Ngurah Bayu Pradana, an adept successful concern instrumentality astatine the Bali-based Malekat Hukum International Law Firm, said the enforcement of corruption instrumentality should beryllium seen arsenic a “positive awesome for ineligible certainty and governance prime successful a country, alternatively than a antagonistic one”.

“Experienced overseas investors mostly recognize that the top hazard successful investing is not the beingness of instrumentality enforcement, but rather, ineligible uncertainty, oregon a concern successful which the rules of the crippled are unclear, ineligible processes deficiency transparency, oregon enforcement is selective and unpredictable,” Pradana told Al Jazeera.

While Makarim was recovered blameworthy of abusing authorization and causing authorities losses, helium was acquitted of an further complaint of straight seeking to enrich himself, and helium was handed a little condemnation than the 18 years sought by the prosecution.

While speechmaking the verdict, Judge Andi Saputra besides presented a dissenting opinion, saying that helium recovered “no grounds of malicious intent oregon malicious acts” and scant “causal transportation oregon denotation betwixt the struggle of involvement and the firm crime”.

The Malekat Hukum instrumentality firm’s Pradana pointed to the judge’s dissenting presumption arsenic grounds of the Indonesian judiciary’s independency and rigorous fact-finding.

“For overseas investors considering Indonesia arsenic an concern destination, the takeaway from this lawsuit should not beryllium alarm, but alternatively assurance that Indonesia’s ineligible strategy functions and tin clasp anyone accountable arsenic earlier the law,” Pradana said.

“So agelong arsenic concern contracts are intelligibly drafted, concern processes are conducted transparently, and implementation complies afloat with applicable laws and regulations, concern successful Indonesia remains a harmless and promising choice.”