Prabowo’s policies spark both hope and concern in Indonesia
Indonesia’s new administration faces challenges sustaining populist programs and addressing fears of pre-democratic era measures.
In a nutshell
- Policies like the Nutritious Meals Program aim to combat poverty
- Jakarta’s budget cuts in critical sectors cause protests and unrest
- Rising military influence spurs concerns over democratic backsliding
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After two previous unsuccessful attempts, Prabowo Subianto secured Indonesia’s presidency with 58.6 percent of the vote in the first round. He officially took office on October 20, 2024. During his first 100 days in office, a survey by Kompas Litbang found that 80.9 percent of respondents were satisfied with his leadership. This starkly contrasts with his predecessor, Joko Widodo (Jokowi), who began his first term in 2015 with a 65.1 percent public satisfaction rating.
The high approval rating largely stems from President Prabowo and Vice President Gibran Rakabuming Raka’s people-centered policies, which include a free nutritious meal program, free housing and medical checkups.
Prabowo’s flagship program
A key initiative under the Prabowo administration is the Nutritious Meals Program, or Makan Bergizi Gratis. Its goal is to combat stunting – a condition characterized by impaired growth and development in children caused by poor nutrition, infections and a lack of psychosocial support, as defined by the World Health Organization. Similar programs have yielded positive outcomes in countries like India and Japan. Although Indonesia has seen some progress, malnutrition remains a persistent issue.
Beyond addressing malnourishment, the meal program aligns with President Prabowo’s broader pledge to eradicate poverty in Indonesia. Despite steady economic growth, the country still grapples with major challenges. From 2019 to 2024, efforts to reduce poverty have been making progress, albeit at a moderate pace.
While Indonesians are enthusiastic about the meal program, implementing it has proven difficult. Food poisoning incidents that hospitalized students have raised concerns. Additionally, the logistical complexities of distributing meals across Indonesia’s vast archipelago, coupled with doubts about the program’s long-term sustainability, have sparked skepticism about its feasibility.
If not carefully managed, costs could exceed initial estimates, risking strain on state finances and threatening the viability of one of the world’s most expensive free meal programs.
In fact, the government recently scaled back its spending plans on the meal program, reducing next year’s projected expenditure to 350 trillion Indonesian rupiah ($21.4 billion) – a 22 percent cut from earlier proposals.
If not carefully managed, costs could exceed initial estimates, risking strain on state finances and threatening the viability of one of the world’s most expensive free meal programs.
Austerity measures fuel public backlash
Adding to these difficulties, the budget efficiency plan implemented by the Prabowo administration has stirred economic and social tensions.
To address fiscal pressures, spending cuts have been implemented for infrastructure development, including the new capital, Nusantara. The Ministry of Public Works’ budget was reduced by more than 70 percent. Civil servants’ allowances for business travel and meetings were also slashed, affecting industries reliant on government spending.
Civil servants’ business travel typically boosts hotel demand, accounting for about 40 percent of demand in Indonesia. However, occupancy dropped by 30 percent in February due to the government’s budget efficiency policy.
The aviation industry is also hurting, with civil servants and state-owned enterprises making up 15-20 percent of domestic airline passengers. Domestic flight occupancy decreased to 67 percent in the first three weeks of March, from 75 percent in January.
These economic disruptions have fueled public unrest, culminating in widespread protests. In February, just a month after the 100-day survey showed President Prabowo’s rising popularity, the Indonesian Student Executive Board Alliance participated in the Dark Indonesia protests across various cities. They demonstrated against major budget cuts that affected sectors like education to fund the Nutritious Meals Program.
The protests presented a major hurdle for President Prabowo’s administration and highlighted the deep-seated mistrust regarding his austerity measures. Initially announced in January, the budget efficiency plan for various ministries was set at $18.7 billion. Yet, by February, the government more than doubled this figure, raising the total to $43 billion.
A 25 percent spending cut to the Ministry of Science, Technology and Higher Education is expected to drive up student tuition fees. Furthermore, both public and private colleges have decreased the financial support provided to low-income students through the Smart Indonesia Card scholarship by 9 percent. Protesters are urging the government to carry out a comprehensive review of the free meal program.
In contrast to the optimistic 100 Days of Prabowo survey, the students’ protests reflect widespread dissatisfaction with government policies and fears about the country’s social support system and economic stability. The Dark Indonesia protest is one of the largest since the 1998 reform movement, which followed the end of the Suharto regime.
Indonesia’s democratic backsliding
There are also mounting worries about Indonesia’s democratic trajectory. In October 2023, the Constitutional Court relaxed eligibility criteria, allowing Vice President Gibran, son of former President Jokowi, to become Mr. Prabowo’s running mate.
Moreover, after the House of Representatives officially passed a revision to the law expanding the military’s role in civilian posts, concerns about democratic backsliding resurfaced. Despite the deputy speaker’s assurances that the concept of the New Order administration – Indonesia’s pre-democratic era – was not making a comeback, many viewed the legislative changes as a troubling return to the long-abolished dual function of the military.
The number of government agencies legally allowed to hire active-duty military personnel rose from 10 under the previous guidelines to 14 under the updated ones. This dual military role was vital for Suharto to maintain power from 1965 to 1998.
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This year marks the 27th anniversary of the Reformation, a new chapter in Indonesia’s history that began after 1998. Following the efforts of reformist groups, the country witnessed a shift toward democracy. It is now the world’s third-largest democracy, by population. The military’s involvement in civilian and political matters officially ended, press freedom was established and presidential terms were capped at two five-year periods.
Indonesia’s democratic transition, with its peaceful power transfers, set a regional example. However, there are now apprehensions about the possibility of a gradual reversal of this progress.
A March study by Kompas Litbang found that 69.5 percent of respondents were worried that the growing presence of military personnel in civilian sectors could undo the reforms initiated in 1998. The Asian Barometer Survey indicates that Indonesians often link democracy to effective governance and positive socioeconomic outcomes. Notably, only 7 percent value economic growth over democracy, which explains strong support for the Prabowo-Gibran administration’s free meal program in their first 100 days.
Economic woes
In February, President Prabowo launched Danantara, a sovereign wealth fund designed to consolidate several state-owned enterprises. This ambitious initiative aims to boost the country’s economic growth, manage state assets and engage in high-impact projects. However, critics have pointed to the lack of independent supervision and transparency associated with the fund. Since it operates directly under presidential control, national auditors are not allowed to provide oversight.
Meanwhile, in April, the currency fell to an all-time low of 16,868 Indonesian rupiah against the U.S. dollar, surpassing its depreciation during both the pandemic and the 1998 Asian financial crisis. This plunge makes it one of the world’s weakest currencies, signaling market skepticism about President Prabowo’s policies.
Facts & figures
Indonesia’s GDP growth
The government’s efficiency plan, aimed at upholding fiscal discipline, has not only reduced public spending but also hindered private investment, leading to an economic growth rate of 4.87 percent in the first quarter of the year – the slowest since the peak of the Covid-19 pandemic.
Several factors, including budget cuts in essential sectors, influence the country’s attractiveness to global investors. Healthcare spending has been slashed by 18.5 percent, while infrastructure investment has seen an even steeper cut of 73 percent. The $28 billion meal program, set to serve 83 million by 2029, could raise concerns about the government’s ability to balance the budget.
Scenarios
Likely: Democratic regression
The meal program that was promised during the campaign will remain the focus of the current administration. However, it is unlikely to deliver the desired results due to concerns about a potential decline in food quality stemming from an overextended budget.
Democratic backsliding is unlikely to stop in the short term. Signs of this decline were already visible during the final term of the previous administration, and it seems unlikely that the country will reverse course anytime soon. The rising participation of military personnel in civilian roles only compounds the issue. Indonesia appears to be shifting from traditional Western alliances and showing some changes in its democratic practices.
Highly likely: Jakarta boosts ties with China, other ASEAN members amid U.S. tariffs
With Donald Trump back in the White House for a second term, Indonesia faces a significant challenge. The U.S. had proposed a 32 percent “reciprocal” tariff, but then on April 9 paused the decision for 90 days. However, during an April meeting in Washington, U.S. Secretary of State Marco Rubio praised Indonesian Foreign Minister Sugiono for Jakarta’s efforts to implement economic reforms to foster a fair and balanced trade relationship.
According to the government, Indonesia’s exports to the U.S. represent approximately 2 percent of its GDP. Even though the tariffs have been postponed, the Prabowo administration will still look to diversify its trade partners. As a result, the Indonesian leader may shift his focus toward strengthening economic cooperation with other members of the Association of Southeast Asian Nations (ASEAN).
On May 25, multiple agreements were signed with China, further strengthening the already robust economic relationship between the two countries. Among these is an investment agreement between Danantara and China Investment Corporation (the country’s largest sovereign wealth fund). A standout feature of this deal is the use of local currencies for bilateral transactions, marking a significant move toward reducing dependence on the U.S. dollar. China is Indonesia’s largest trading partner and was one of its key sources of foreign direct investment in 2024. Additionally, China played a significant role in financing Indonesia’s high-speed rail project, a cornerstone of former President Jokowi’s infrastructure initiatives. This rail service is also part of Beijing’s Belt and Road Initiative.
In January, Indonesia became the first member of ASEAN to join the BRICS group. This membership in the international organization of 10 countries, which aims to challenge G7 dominance, will boost Jakarta’s ability to forge economic partnerships with emerging countries worldwide. China is one of BRICS’ founding members, contributing 52 percent of the group’s total GDP.
Nevertheless, Jakarta maintains its independent foreign policy and has openly expressed interest in joining the Organisation for Economic Co-operation and Development.
Indonesia’s close ties with China may hinder its ability to navigate the U.S.-China rivalry in the region, which would in turn affect ASEAN. As the largest country and a cofounder of this regional group, Indonesia has the potential to influence the organization, especially on the ongoing issues of the South China Sea.
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