Every January, heads of state, finance ministers and choice executives – essentially a hand-picked bunch of individuals holding immense financial power – convene at the prestigious Davos Summit in Switzerland to maintain their continuing faith in liberal interdependency and cooperation. This year’s summit, under the precedent of “A Spirit of Dialogue,” played along in accordance to these themes. Macron’s speech especially stood out: he spoke of a global “shift towards autocracy, against democracy… towards a world without rules.” In order to correct this, he said, states would need to “remain committed to cooperation… (and) multilateralism.”
Macron’s statements on global political trends ring truer today than they have ever before. The world is shifting away from the so-called ‘rules-based order’ through constant hostilities and violence. Economies, in tandem, are withdrawing unto themselves, pushing self-sufficiency agendas that are at the root scathing indictments of deglobalisation through hyper-nationalised security programmes. They are decoupling to avoid the costs of supply chain leverage being used against them during times of conflict.
Take for example Indonesia’s recent export controls on crucial industries, including coal and palm oil. In a bid to nationalise exports and increase incoming tax flows, the state is introducing Danantara Sumberdaya, an enterprise designed to centralise control over key Indonesian commodities. External companies seeking to trade with Indonesia will have to place their contracts in the hands of Danantara Sumberdaya. It will act as a financial intermediary, keeping checks on profits and ensuring that capital control is transferred from foreign parties to domestic. This move was taken after exporters reportedly underreported numbers on export invoices from 1991-2024, causing the Indonesia Rupiah to take repeated hits. Its floating standard against the dollar has also caused ever-widening deficits, requiring the state to take strict action. This effort to securitise the flow of significant goods is yet another point in the rise of protectionist policies worldwide, underlining not just endeavors to protect domestic profits, but also the politicisation of national profit control as an issue of national interest.
China, Indonesia’s largest trading partner, is liable to be affected by these export controls. China’s 2025 imports from Indonesia came to $82.1 billion, commodities ranging from key metals to mineral fuels. Prabowo’s new policy may restrict Chinese access to clean energy raw materials required for its renewable energy industry. This, in addition to China’s dependence on Indonesian nickel, highlights the growing importance of resource geoeconomics and the tangibility of leverage during times of resource crises, such as that created by the Iran War. Countries are in need of hedging their resource dependencies, no longer able to remain comfortably reliant on their trading partners.
China’s own export controls are cutting global electronics industries at the knee. Their rare earths and critical minerals total to around 70% of the world’s capacities, with Japan and the US forming their largest markets. MOFCOM announcements from last year designated rare earths and magnets as export controlled commodities. This move came during the height of last year’s US-China trade war, where American tariffs were met with retaliatory export controls on key industrial materials. January of this year brought a notice banning all exports of dual-use materials that Japan could use for military purposes. Last year’s export squeeze was felt deeply by automotive industries from the US, Europe, and Japan, among others. The retaliatory rare earths restriction maneuvre underlined a time immemorial point in geoeconomic strategy: whoever controls resources, controls global political outcomes. It came in contrast to the ambitious liberalism of post 2000s cooperation that the world strove so hard to achieve.
