High-profile prosecutions of Indonesia’s technocrats are reshaping incentives across government and business. When good-faith decisions are treated as crimes, reform, investment and innovation all suffer.

Jakarta’s courtroom drama has become an unexpected test of the nation’s imagination. Once celebrated as a hub of reform, Indonesia now watches as renowned technocrats – executives, ministers, and innovators who took risks on modernisation – see their efforts portrayed as crimes. The outcome is a fragile public mood: admiration for bold policies is overshadowed by fear that honest mistakes could lead to prison and damaged reputations.

The headlines paint a stark picture. A former trade minister was sentenced to four and a half years in jail over sugar import permits, despite the court finding no evidence of personal enrichment; a well-known SOE CEO faced the same sentence for an acquisition later described by a dissenting judge as a business decision, not embezzlement; a prominent tech founder turned education minister has been detained as a suspect in a large Chromebook procurement investigation while maintaining that pandemic-era emergency purchases were compliant with regulations and aimed at keeping classrooms connected.

These are not minor scandals – these are high-profile figures whose decisions have influenced markets, schools, and emerging industrial strategies.

This sequence does more than just fill columns; it shifts incentives. Ambitious civil servants and returnee professionals from the diaspora now consider legal risk a key career hazard. Boards of state-owned enterprises are becoming hyper-conservative; risk-taking is replaced by a default to inaction. For a nation aiming for rapid industrial upgrading – from electric vehicles to digital education – such risk-avoidance proves costly, slow, and disheartening.

One of the ironies is that the legal language around corruption traditionally hinges on intent and personal gain. Philosophical and legal texts emphasise that corruption involves sacrificing public duty for private benefit. When courts view managerial failure or controversial policy judgements as criminal without proof of personal enrichment, that legal stretching erodes the very trust anti-corruption bodies are designed to safeguard. The business judgement rule – a doctrine protecting directors who make reasoned, good-faith decisions – provides a helpful conceptual safeguard; yet its inconsistent application currently leaves an uncertain legal landscape for state managers.

This is not merely an internal governance quarrel. Domestic signals reverberate across trade halls and foreign ministries. The current administration’s pivot toward Asian partnerships and more transactional economic ties amplifies that reverberation: partners and investors now judge not only resource endowments and market size, but also the predictability of legal outcomes and the safety of commercial or technological cooperation.

If high-profile prosecutions are followed by political rehabilitations or presidential clemency, the image presented is of a court system subject to sudden reversals – an image corrosive to long-term capital and strategic trust.

The sustainability agenda adds another layer of urgency. Indonesia’s nickel-rich promise for batteries and an industrialised EV value chain requires sustained policy signals and sustained private-sector confidence. The International Council on Clean Transportation and other analysts argue that continuity and clarity in incentives are essential to meet electrification targets and attract the manufacturing partnerships that underpin green industrial policy. A legal environment where policy decisions risk retroactive criminalisation threatens those partnerships, slowing climate transitions and economic upgrading simultaneously.

This crossroads invites a simple but politically awkward diagnosis: anti-corruption must remain vigorous, but its instruments must distinguish between malfeasance and managerial misjudgment. Criminal sanctions should target clear private gain and corrupt intent; administrative and civil remedies are more proportionate responses where processes failed but public actors acted without enrichment. Reforms that codify a business-judgement-like protection for bona fide public-sector decision-making, alongside strengthened judicial training on corporate governance, would recalibrate the balance between accountability and innovation.

Furthermore, it is vital to implement a series of gradual, humane reforms that preserve honest risk-taking while holding corrupt individuals accountable: Legislate a clear ‘business-judgement’ safeguard for bona fide public-sector decisions to prevent responsible innovation from being punished as theft; require transparent, published prosecutorial standards and a tiered remedies framework that reserves criminal sanctions for intent and private gain while using administrative/civil sanctions for process failures; mandate ongoing judicial and prosecutor training in corporate governance and complex procurement to reduce harmful legal drift; expand robust whistleblower protections and safe-reporting channels in accordance with OECD guidance; and publish investor-facing policy roadmaps that ensure continuity for strategic green and digital projects to maintain long-term partnerships.

Restoring confidence will demand more than technical fixes. Transparency about prosecutorial standards, restraint in the use of mass pardons that look politically motivated, and visible protections for whistleblowers and honest managers will matter.

Equally important is a national narrative that values courage as well as caution – a story that recognises that ambitious policy sometimes fails without being corrupt. For a country intent on attracting its global citizens home under new residency and citizenship offers, legal assurance is the currency that will buy back brain-gain.

The stakes are clear. If the incentive system keeps rewarding caution, the flow of ideas driving education reform, digital economy growth, and green industry will diminish. However, if the governance framework can be stabilised so that honest policy risks are not penalised as theft, Indonesia has a real chance to regain not only reputational capital but also the human resources needed for a clean-energy, knowledge-based future. The country’s decision will be reflected in budgets, boardrooms, and the choices of expatriates contemplating whether to return.

At a time when sovereign strategy depends on agile technocracy and daring industrial policies, the law must be careful not to criminalise the very innovation that the nation aims to foster.