On April 7, nearly six months since assuming office, Indonesian President Prabowo Subianto sat down with seven Indonesian journalists to give a rambling three and half hour interview. One comment stood out. Marking his own presidency’s performance, Prabowo gave himself a modest six out of 10. A passing grade, but not the nine he was aiming for.
After a year in office, with the economy stuttering and August seeing Indonesia’s worst riots since 1998, one wonders what score he would give himself now.
Prabowo has not met his own expectations, or those of the Indonesian people. A recent public poll put Prabowo’s approval rating at a sky-high 83.5 percent – around where it was earlier in the year. But other polls privately circulating have shown a precipitous drop to below 50 percent.
Two features stand out for the Prabowo presidency. The first is the rapid centralization of power in the hands of the president, with worrying authoritarian undertones. The second is a chaotic approach to governance. These linked trends do not bode well for Indonesia and its political stability.
Prabowo does have a difficult in-tray, with a global trade war underway and geopolitical instability weighing on the world economy. But, his apparent lack of focus has not helped. Like Washington, D.C. under President Joe Biden, Jakarta buzzes with sotto voce conversations about the president’s age and health. People talk of an old man secluded by a protective huddle of aides. His relentless international travel schedule – Prabowo has spent 68 of his first 365 days abroad – likely does not help.
Despite this, Prabowo also has the firmest grip on Indonesian elite politics of any president since the dictator Suharto, his former father-in-law. The dire forecast that the one-time special forces general with a bloody past would usher in a new dictatorship have yet to be fulfilled. But the authoritarian direction of travel is clear and worrying.
Prabowo’s policy priorities can be crudely divided into four pillars: increase GDP growth to 8 percent; boost welfare spending, most notably via his signature free school meals program; push companies to process Indonesia’s natural resources domestically; and enhance Indonesia’s role on the world stage.
There are positive elements to this program, but much of it is either incredible or ill-conceived.
Claiming the Throne
Prabowo’s clearest achievement to date is his rapid consolidation of power. In a year Prabowo has accrued a personal influence over the political system that it took his predecessor, Joko “Jokowi” Widodo, years to achieve, albeit building on the foundations the latter left.
A quick survey of institutions shows the breadth of his dominance. The Cabinet is a swollen body with 123 members. New ministries and positions have been created and doled out to pull as many political actors as possible into Prabowo’s coalition. The only exception are Jokowi loyalists, who have been slowly weeded out.
But the Cabinet is also by all accounts not where policy gets made. Ministers complain privately of the difficulty of accessing the president. Policy seems to be set by a small inner circle where personal connections to the president matter more than official status.
Indonesia’s parliament is quiescent. Every party, bar one, has joined the government. The only party to stand outside, the PDI-P, has pointedly declined to take the role of an actual opposition. The brief imprisonment and then surprise pardon this summer of the PDI-P’s secretary-general, Hasto Kristiyanto, served as a shot across the bow.
As the Hasto incident illustrates, Indonesia’s legal institutions – notably the Attorney-General’s Office, the Corruption Eradication Commission, and the courts – are being used as tools to discipline opponents. This is not new, the technique was pioneered by Jokowi. However, it has been expanded.
Targets now include not just political figures like Hasto and former trade minister Tom Lembong but also civil servants. The costs of institutional resistance to presidential priorities are clear.
Bank Indonesia has also been taken in hand. December 2024 saw a warning shot when it was raided and the governor’s office searched by the Corruption Eradication Commission. A bill which would give parliament the power to dismiss governors is also in the works.
What institutions remain out of Prabowo’s grip? The top courts were compromised under Jokowi. The contortionist ruling that allowed his son, Gibran Rakabuming Raka, to be nominated as Prabowo’s running-mate showed this. But they have since shown spasms of independence.
For the security services, the work is in progress. The head of the police is a Jokowi man but public calls for police reform and his replacement gives Prabowo plenty of latitude to replace or discipline him.
The head of the military is not a Prabowo man but will be up for replacement before the president’s term ends. The ground is being prepared for the military to play a bigger political role with parliament passing a bill that expands military power by letting officers take on a wider range of civilian positions.
Local government is being reined in. Plans to get rid of direct elections for governors or other local officials seem shelved for now, but sharp cuts to regional transfers by the central government will trim their wings.
For state-owned companies, control has been stripped from the ministry of state-owned enterprises and passed to a new body, Danantara, which reports directly to the president. The revenues of state-owned companies will now pass to Danantara, not the finance ministry. It looks like an enormous piggy-bank for whatever project the president may wish to undertake.
The private sector is being squeezed too. In September major Indonesian businesses were subject to the bald extortion of having to buy Patriot Bonds at 2 percent yields from Danantara. Indonesian 10-year government bonds yield 6-7 percent. Meanwhile, major plantation companies have been prosecuted for corruption, fined, and their lands confiscated and handed over to army linked groups. Businessmen grumble, but privately.
Gambling on Growth and Losing the Crowd
This concentration of power has not been good for governance. Policymaking and execution has been chaotic with newly created ministers complaining early on they didn’t even know where their office was. Most dangerously, fiscal decision-making has become erratic with knock-on effects on the wider economy. When the government published data showing GDP growth of 5.12 percent, few believed it.
Admittedly, Prabowo was dealt a mixed hand. When he came to office Indonesia had strong fundamentals: steady growth, low debt, and a huge internal market. But the headline figures concealed more turbulent undercurrents. Real wages have stagnated over the past decade. Jokowi’s infrastructure binge piled up an opaque amount of off-balance sheet debt on state-owned enterprises. And Indonesia’s tangle of regulations, graft, and rent-seeking remained an untamed and persistent drag on growth.
Strains on the economy intensified this year. U.S. President Donald Trump’s tariff policy weighs on the global economy. It also pushed Chinese manufactured goods, locked out of the U.S., to flood the Southeast Asian market, driving local manufacturers to the wall. The middle class has shrunk. More and more workers struggle to find jobs and are pulled into the low productivity informal sector. The prices of commodities like coal, palm oil, and metals which have long driven the economy have fallen, too.
Prabowo has failed to meet these challenges. He is correct that Indonesia needs more growth. However, to grow faster, let alone achieve 8 percent annual growth, Indonesia will need foreign investment. Here the country has gone in the wrong direction, with FDI falling and foreign funds exiting the country. Prabowo’s often expressed suspicion about foreign plundering makes him a poor ambassador to try and lure overseas capital back.
Worries about political risk outlined above play a role in this capital flight. Typically investors have viewed Indonesia as relatively low risk. The government keeps it debts low and Bank Indonesia keeps the rupiah steady, even if this means less juice for growth.
But Prabowo is pursuing a program that throws both of these into doubt, and with power concentrated in his hands few can deter him. Many worry that his spending plans may strain the budget. Meanwhile, Bank Indonesia seems in thrall to political priorities. It has cut rates even as the rupiah has slid to become one of Asia’s worst performing currencies. And, now it has started to purchase government debt, a measure usually reserved for emergencies like the COVIDd-19 pandemic.
New Finance Minister Purbaya Yudhi Sadewa will have trouble dealing with this. Appointed in the wake of the August riots that saw the house of his predecessor looted, he has responded by splashing the cash. Government reserves have been injected into state-owned banks to stimulate lending. Some modest stimulus and welfare packages have been proposed.
These moves are not necessarily wrong. But, many question the efficacy. Few think Purbaya will have the capital to fundamentally reassess the issue currently distorting Indonesia’s budget to deleterious economic effect: welfare spending.
Austerity For Thee but Not For Me
With welfare spending, the problem is simple. Prabowo wants to spend lavishly on public welfare, in particular his signature campaign promise of free school meals. Such an aim is laudable, but not necessarily affordable.
In 2025, this has absorbed 5.1 percent of the budget. Next year this will rise to 8.8 percent of the budget, or about 1.5 percent of GDP, absorbing the lion’s share of the education budget. This, plus his spending on other projects, like the food estates and defense discussed in the following paragraphs, represents a significant sum. With SOE funds now going to Danantara budget revenues have taken a hit.
To cover the costs, Prabowo had a few different options. Initially he flirted with just taking on more debt, breaching Indonesia’s commitment to a 3 percent deficit, but adverse market reaction seems to have deterred him.
He also flirted with raising more tax. Indonesia’s tax to GDP ratio has hovered at a measly 10 percent. But while he talks about cleaning up the graft-ridden tax system so far all we have seen is a few high-profile officials fired.
More fundamental issues are avoided. Increased political risk means Indonesian conglomerates are even less likely want to keep their money in country. And broad tax hikes are not on the agenda. Prabowo intervened in December 2024 to cut back a scheduled VAT hike in the face of popular outcry. As such, Indonesia’s tax to GDP ratio has actually declined throughout 2025.
In this context, Prabowo has opted for what he calls “efficiencies”: sweeping cuts to every other part of government spending. Certainly Indonesia can make savings. Quietly shelving his predecessor’s new capital project, Nusantara, is sensible.
But certain cuts have proved extremely disruptive – even to the president’s own plans. In February, the Ministry of Public Works saw its allocation for the year cut by 73.3 percent leaving almost no infrastructure spending to speak of. Cuts to the cash transferred to regional governments are also biting. This year saw a reduction of 6 percent. Next year it is scheduled to fall further by about 30 percent, compared to 2025. With provincial and local governments responsible for services from education, healthcare, and local infrastructure this has made itself felt. Scrambling for cash, regional governments are making cuts and looking for revenue wherever they can find it.
The consequences are potentially dangerous. In August, locals in the small town of Pati rioted over a sudden hike in property taxes and the consolidation of local schools that saw staff laid off. This attracted massive public sympathy. Donations flowed in. It is hard not to see this prefiguring the riots that gripped the whole nation later that month. With the central government still pressing ahead with its agenda we should expect more strains to manifest.
Indeed, Prabowo does not seem to have reaped the popularity rewards Indonesian leaders usually get from splashing the cash. What money is being spent on his projects comes at the expense of other programs. And, the rushed rollout and execution of the free school meals scheme has seen it hit by repeated food poisoning scandals.
Reform or Relapse?
A revival of growth could soothe tensions. But Prabowo’s muddled economic strategy seems unlikely to achieve this. He has wavered between reforms that would boost markets and international trade, and his own preference for state-led quasi-autarchic developmentalism.
On the positive side, Indonesia has seen some important developments. The deal with the United States to reduce tariffs from 32 percent to 19 percent involved some humiliating concessions but has helped soften the blow. Although with most other countries in the region receiving a similar rate it can’t be touted as a special victory for Indonesia.
A trade deal with the European Union, negotiations for which had dragged on for nearly a decade, was also signed in September. A trade deal with Canada followed. This was a sensible response to U.S.’s erratic protectionism – and well overdue. Vietnam has had a deal with the EU since 2020.
However, other reforms have stalled. After the U.S. announced its huge tariffs there was a brief period where Prabowo signaled a willingness to cut away at the some of the jungle of red tape that retards development and encourages endemic graft. That initiative has since withered on the vine.
What has persisted is the “downstreaming” agenda, inherited from the Jokowi administration, a concept which envisions Indonesia industrializing via processing its own rich natural resources. For Prabowo, vocally suspicious of foreign businesses as plundering and inclined to self-sufficiency as a strategic asset, the concepts aligns with his instincts. The government has talked extensively about promoting domestic processing of commodities ranging from copper to coal to cocoa to used cooking oil.
The recent success of this strategy for nickel – from ores to nickel pig iron and battery materials and maybe next electronic vehicles – has inspired many. But the credibility of this approach as a development strategy is dubious. The success of the nickel scheme was the product of unusual circumstances and may already be stalling. Other efforts, such as the gambit to become a global chocolate producer on the back of the country’s cacao production, have not seen success.
For Prabowo’s signature projects the outlook is not promising. The president’s focus is on agricultural products to make foodstuffs and biofuels, with the aim of achieving national self-sufficiency in these areas. To this end he assigned state funds to vast food estates in Indonesian Papua in murky partnership with politically connected companies.
Prabowo’s food will likely end up as little more than an expensive and environmentally damaging failure. That was, after all, the fate of his previous attempt at this policy while serving as defense minister. The wider loss though is the waste of time and focus going in the wrong direction.
On the World Stage
Weak growth will undermine Prabowo’s final aspiration of bringing Indonesia – and himself – glory. Once a tribune of the Third World under Sukarno and then the leading regional player under Suharto in recent decades Indonesia has generally punched below its weight in international affairs. The president seems determined to change that – but without growth, Indonesia will struggle to enhance its global standing.
Foreign policy is the area Prabowo has taken the most personal role in. He has engaged in near constant travel that has seen him meet most world leaders of note, including Donald Trump, Xi Jinping, Vladimir Putin, Narendra Modi, Emmanuel Macron, Keir Starmer, and Luiz Inácio Lula da Silva. Prabowo’s foreign minister, Sugiono, is not a veteran diplomat, as is usual, but a close personal aide who acts as conduit of his will.
Security seems to be Prabowo’s main interest. He has repeatedly volunteered Indonesian forces to serve as peacekeepers in Gaza, Ukraine, and elsewhere. And, he has boosted defense spending, something for which he long lobbied as defense minister.
Prabowo’s personal diplomacy on the world stage has yet to yield clear concrete results or much plaudits at home. Indeed, his recent speech at the United Nations General Assembly on the Israel-Palestine conflict was well received there, but set off a firestorm of domestic controversy with the president accused of being soft on Israel.
Whether the prize Prabowo is looking for is worth it is also unclear. An Indonesian peacekeeping force ending up in Gaza may well find Jakarta grasping a poisoned chalice. Caught between Israel and Hamas, it risks, at best, being reduced to an impotent bystander or, at worst, being dragooned into conducting operations against Palestinian groups. The risk of domestic outrage to secure a goal that has limited bearing on Indonesia’s strategic interests is clear.
There are questions to ask about the defense spending going ahead too. Indonesia could well do to upgrade its security capacity, but a magpie like approach of buying prestige equipment gives dubious returns. Indonesia’s latest announcement that it will buy 42 Chinese jets will give it an air force made up of planes from seven different countries, including the U.S., Russia, and Brazil – a nightmare to effectively integrate.
It is also extremely expensive, with a price tag around $9 billion. With a budget already creaking, further defense spending may be difficult.
The Next Four Years
Looking ahead Indonesia’s trajectory is worrying. August’s crisis has passed. The riots rapidly subsided. Prabowo, despite strong urgings from some in his Cabinet, did not respond with martial law. There have been only limited signs of further unrest.
However, the discontent that fueled the August unrest remain unaddressed. The initial spark was rage over elite self-dealing as parliament awarded itself incredibly generous housing allowances. Parliament initially backed down, but a little over a month and half later it has awarded itself new perks.
The protests really took off when a police vehicle, recklessly speeding through a protesting crowd, accidentally ran down a motorbike taxi driver and then sped off. The officers in the car have been dismissed or otherwise punished. And, there is talk of police reform. But, whether Prabowo – a product of the security services with his own bloody past – is truly willing to take on the culture of ill-discipline, corruption, and impunity that has long beset Indonesia’s police and military is dubious.
Meanwhile, economic issues seem likely to worsen. The flow of foreign funds out of Indonesia has accelerated. And, if this continues social discontent especially among Indonesia’s youth, who face an unemployment rate of 16 percent, will only grow.
With Prabowo’s tight grip on elite politics there are few venues for opposition. The street will likely remain its main locus.
Many who sought to understand Prabowo looked to Suharto as a model. But, in fact it may be his predecessor, Sukarno, that Prabowo most resembles – for years having aped his style with a safari suit, shades, and black cap.
There is the left-wing tendency that manifests more in grand rhetoric and projects than practical improvements, to the detriment of the economy. There is the nationalism that seeks an expanded role on the world stage. There is the personalist leadership style paired with an apparent failure to engage with the actual details of administration. And there is the focus on unity via co-option and coercion of the political elite into a semi-authoritarian system.
Sukarno today is feted as a great national hero, but for all his early achievements in Indonesia’s revolution it is always worth remembering his later authoritarianism and appalling economic stewardship. As he grew old – though still younger than Prabowo is today – worries about his grip on power and succession sparked the 1965 crisis.
Indonesia is thankfully far from a repeat of that bloody tragedy of coup and massacre. The country’s dysfunctions are now far less extreme. But as Karl Marx once put it, history repeats itself, first as tragedy, then as farce.