The current economic landscape is marked by the return of a configuration of two major world powers after more than three decades of the post-Cold War unipolar era. Competition between the United States and China has now expanded from military to economics, technology, and diplomacy, impacting market volatility from the Middle East to the Indo-Pacific.
This is reflected in data from the Bloomberg Economic Surprise Index as of mid-July 2026, where the United States index stood at a level of 55.0, indicating economic data that is consistently stronger than expected. Meanwhile, China’s index was at -20.8, indicating data releases that remain below expectations, in contrast to the Asia Pacific which recorded optimism at a level of 51.5.
Amid this polarization, middle-power countries are expected to play an increasingly important role in the next two to three decades. With a strategic position, a growing economic size, and relatively well-maintained geopolitical stability, Indonesia is considered to have a major opportunity to strengthen its position as one of the primary drivers in the region.
Founder and Chairman of the Foreign Policy Community of Indonesia (FPCI) Dino Patti Djalal considers that Indonesia possesses increasingly strong geopolitical capital. “We are no longer a third-world country; we are a G20 nation with an upper-middle income economy. Indonesia’s geopolitics are relatively safe, because current global rivalries do not directly target Indonesia,” Dino stated via a press release, Monday, July 27, 2026.
Dino emphasized that this serves as crucial capital to strengthen Indonesia’s position as a strategic partner for various countries while maintaining regional stability. However, geopolitical capital alone is not enough, as Indonesia still requires concrete steps to win the trust of the global market. Amid high global capital mobility, investors will continue to seek countries capable of offering policy certainty, economic stability, and long-term growth prospects.
Increasingly Adaptive
Executive Director of Charta Politika Indonesia Yunarto Wijaya explained that the rising rivalry between the United States and China, as well as the tendency of various countries to implement more protectionist economic policies, require every nation to become increasingly adaptive in formulating economic and diplomatic strategies.
Indonesia’s steps to strengthen relations with various strategic partners, including joining BRICS and deepening cooperation with the United States, are part of a strategy to safeguard national interests amidst changes in the global order. However, Indonesia’s competitiveness will ultimately still be determined by its domestic economic fundamentals.
“A country’s bargaining position is determined not only by its diplomatic capacity, but also by the strength of its economic fundamentals. When regulations provide certainty, bureaucracy becomes more effective, the investment climate is conducive, and infrastructure development continues to be strengthened, Indonesia will hold higher competitiveness amidst global geopolitical dynamics,” Yunarto said.
