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The conflict between Iran and Israel has been one of the flashpoints in the Middle East. However, in recent years, the conflict between these two countries has transcended regional boundaries and triggered turmoil at the global level. This study aims to analyze the Iran-Israel war conflict and examine the implications for the economy in Indonesia. The approach used is normative juridical by utilizing the method through library studies. The results show that Indonesia, as a developing country with the implementation of an open economic system that relies on the imported power sector, has an indirect relationship to the war conflict between Iran and Israel. The conflict has significantly impacted the Indonesian economy, especially with rising energy prices, inflation in international trade, and a significant decline in foreign investment. This study also emphasizes the importance of Indonesia maintaining a free and active foreign policy, as well as prioritizing diplomacy and peaceful conflict resolution in dealing with the implications of the war between Iran and Israel.

The Iran-Israel war poses a significant threat to Indonesias economic stability.Negative impacts, such as rising oil prices, global financial market shocks, and pressure on foreign exchange reserves, require mitigation strategies.Maintaining financial system stability, diversifying energy sources, and prioritizing diplomacy are crucial for minimizing the negative impact and capitalizing on shifting global economic dynamics.

Indonesia should proactively investigate the potential for diversifying its energy sources beyond oil, including accelerating the development of renewable energy technologies and establishing strategic partnerships with alternative energy suppliers. Further research is needed to assess the long-term impact of the Iran-Israel conflict on Indonesias trade relationships and supply chains, particularly concerning critical imports, to identify vulnerabilities and develop contingency plans. Finally, a comprehensive study should be conducted to evaluate the effectiveness of Indonesias current foreign policy approach in navigating geopolitical tensions and to propose strategies for strengthening its role as a regional mediator and advocate for peaceful conflict resolution, ensuring national economic interests are protected and promoted in an increasingly volatile global landscape.

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