Ryan Eka Permana Sakti – On June 30, 2026, Nadiem Makarim, the former education minister and well-regarded co-founder of ride-hailing giant Gojek, was found guilty in a highly controversial corruption case centering on the procurement of more than a million Google Chromebooks for schools. The Jakarta Corruption Court sentenced him to 10 years in prison.
The court also ordered him to pay Rp 809 billion (USD 44.9 million) as restitution, or serve an additional 5 years.
This decision is a blow not only to Nadiem and many of his supporters but also to key players in Indonesia's emerging tech sector. As a disclosure, I worked for Gojek before its 2021 merger with marketplace giant Tokopedia, long before Nadiem became education minister. I am not close to Nadiem, but I am a member of the tech community.
Many have called out the problematic prosecution against Nadiem.
Australian legal scholars Simon Butt and Tim Lindsey, for example, have argued Indonesia's Anti-Corruption Law (31 of 1999) defines 'state losses' so broadly that convictions can be won without any proof of corrupt intent or the breach of any law. All that is needed is some kind of state loss, although how that is to be proved remains contested. In the case of Nadiem, they say, the state loss figure that was the basis of his conviction apparently rested on a government auditor's own margin assumptions rather than a market-price survey.
Indonesia's Constitutional Court has also acknowledged the problem created by the extraordinarily broad wording of the Anti-Corruption Law. It tried to impose restrictions on how state loss is to be proved, but the Supreme Court ignored them. In December 2025, the Constitutional Court urged the DPR (the national legislature) to reformulate the relevant provisions, but nothing has been done.
This means no honest government official in Indonesia can feel completely safe from prosecution. If an argument can be made that an ordinary administrative decision resulted in an inefficiency, then a court might decide this was a state loss and somehow 'corrupt'.
The cost of unpredictability
This unpredictability is what distinguishes Nadiem's case from many other Indonesian procurement scandals.
Most graft cases involve kickbacks or unmistakable transfers of value. But Nadiem was convicted of 'abusing his authority' simply for choosing Chromebooks during an emergency, pandemic-era procurement project. It was the kind of decision that other ministers have often made.
Questions have now been raised over whether Indonesia's judicial system can be trusted any longer. The problem is much bigger than just one panel of judges; Nadiem's case, sadly, is hardly an outlier.
Last year, former trade minister Tom Lembong, who co-chaired the campaign of President Prabowo Subianto's main electoral rival, Anies Baswedan, and Hasto Kristiyanto, secretary-general of the Indonesian Democratic Party of Struggle (PDI-P), a de facto opposition party, were both convicted in cases widely read as politically charged, only to be pardoned by President Prabowo Subianto.
Some read the pardons as an act of mercy on the part of the president, or simply a way to stem the huge controversy these convictions created. But pardons, especially when the verdicts are not yet final and binding, do not solve the underlying structural problem.
Every court decision perceived as arbitrary erodes judicial credibility, and eroded credibility becomes the standing justification for executive 'correction' of judicial outcomes. That is how deterioration compounds: the worse courts are seen to perform, the more intervention from above appears warranted, and the less the separation of powers means in practice.
A judiciary that loses what Indonesians call marwah (dignity and standing) does not become more independent. It becomes easier to override.
The market's verdict on Nadiem's case
Nadiem's verdict came at a time when Indonesia is facing a startup funding drought.
DealStreetAsia data shows Indonesian startup funding has collapsed from roughly $9.4 billion in 2021 to around $440 million in 2024. This decline has ben driven largely by global rate normalisation and the unwinding of inflated valuations, compounded by genuine governance failures at the agritech startup TaniHub and the aquaculture startup eFishery.
What the Nadiem verdict adds is confirmation of a perception investors have already formed about Indonesia: that, in this country, the line between a business decision, a policy misjudgment, and a prosecutable offence is drawn after the fact by whoever holds power at the time.
Here is the distinction that matters, and that domestic political debate tends to miss: foreign firms do not separate 'government issues' from 'investment climate' the way most Indonesian policymakers and officials do. What investors are actually watching is whether Indonesia can distinguish corruption from policy risk and ordinary administrative decision-making.
Investors can price risk; they do it for a living. What they cannot price is uncertainty, the possibility that a decision considered institutionally acceptable at the time is reclassified, years later, under a different interpretation by a different administration. The whole function of legal institutions in a market economy is to convert uncertainty into measurable risk through clarity, consistency, and due process.
When the line between misjudgment and criminal exposure blurs, that conversion fails. Confidence does not weaken at the margins; instead, it reprices everything.
The international community will not wait for a final decision on Nadiem's case to reach a settled view on Indonesia. The evidence of that repricing is already on the scoreboard. In the IMD World Competitiveness Ranking 2026, released weeks before the verdict, Indonesia plunged to 48th of 70 economies, its worst position in five years, down from 27th in 2024, and now behind Malaysia, Vietnam, and Thailand.
The institutional framework indicator alone collapsed from 14th to 50th over two years. IMD's own framing this year was pointed. In a fragmenting world, it said, competitiveness increasingly belongs to countries with credible institutions. This verdict extends precisely the trajectory that ranking describes.
No one should be surprised if, slowly but surely, Indonesia keeps sliding off the shortlists of major allocators – not because its market has shrunk, but because its institutions have stopped underwriting it.
What now?
For the private sector, though, the solution is not to retreat from government partnership. In a state-led economy of this size, that is commercially neither realistic nor sane.
The lesson is that engagement now demands an expensive precautionary discipline that goes well beyond compliance box-ticking: transparent processes, contemporaneous documentation, and decision-making designed to remain defensible, commercially and legally, a decade later, under interpretations no one can currently foresee. This will make many investments impossible.
The reality is that businesses can manage risk only when rules are clear. What this verdict teaches them to prepare for is a whole other thing.