Indonesia needs government, not military, discipline
From free lunches to budget cuts, Prabowo offers more showmanship than strategy
My latest op-ed for Nikkei Asia:
Shortly after Prabowo Subianto was inaugurated as Indonesia's president in October, the former special forces general put his Cabinet through a military-style boot camp to prepare them for office.
At the time, many investors inside and outside the country were hoping that Prabowo could bring firm leadership to Southeast Asia's biggest economy and overcome long-standing challenges such as corruption, regulatory uncertainty and a lack of cross-government coordination.
Six months later, however, Prabowo has found that instilling discipline across Indonesia's sprawling, highly decentralized system of government is a different and far more difficult mission than pulling rank inside the military.
He has struggled to convince investors about the rationale and effectiveness of his economic policies, including a $29 billion plan to offer free school lunches across the nation, around $18 billion of severe budget cuts that are necessary to fund the meals, and the creation of a new sovereign fund that will control Indonesia's state-owned enterprises.
The rupiah has fallen to levels not seen since the Asian Financial Crisis of nearly three decades ago because of fears that the 73-year-old president prioritizes high-profile initiatives over fiscal discipline.
On the global stage, Prabowo's more personalized approach to foreign policy has confounded Indonesian analysts and external partners, from his offer to temporarily take in Palestinian refugees to his agreement with China to pursue joint development in areas of overlapping maritime claims, which Indonesia had previously refused to recognize as contested waters.
Meanwhile, rights activists have been spooked by a rise in attacks on independent media and recent legislative changes that open up more positions in civilian government to serving military officers. This represents a partial rollback of elements of the vital reforms that put the army back in the barracks following the ouster in 1998 of long-ruling former Gen. Suharto, who was Prabowo's father-in-law. Students have led a protest movement against the military-friendly measures, and in defense of democracy, under the slogan "Indonesia Gelap" or "Dark Indonesia."
Prabowo, who built his political career as a tough-talking nationalist before softening his image to help win the presidency in February 2024, conceded in a recent meeting with senior Indonesian editors that he would give himself a 6 out of 10 for his first few months in office.
Indonesia needs a coordinated, focused government more than ever, with U.S. President Donald Trump's erratic policies and the intensification of the U.S.-China trade and technology war shaking confidence in Asia's economic outlook. And Asia needs a well-run Indonesia to help provide balance and alternative leadership as the region risks being caught between the two sparring great powers.
Prabowo ran for the presidency last year as a continuity candidate, pledging to continue the economic policies of his predecessor, Joko Widodo, an ally-turned-opponent-turned-ally, nothing unusual in Indonesia's topsy-turvy politics. Prabowo's selection of Joko's son, Gibran Rakabuming Raka, as his vice president, was meant to symbolize this merger of minds.
In practice, having spent two decades trying to secure the presidency, Prabowo was always going to rule as his own man. Beyond sharing his predecessor's predilection for governing by his gut instincts, Prabowo has his own vision for Indonesia that is less about building toll roads and bridges and more about projecting national strength.
The free school meals, the launch of the sovereign wealth fund and a more presidential foreign policy all reflect Prabowo's desire to demonstrate Indonesia's existing clout and to make Indonesia a more powerful nation.
But Prabowo has struggled to bring a sense of clear purpose and direction to his administration, much like his predecessors Jokowi and Susilo Bambang Yudhoyono, who also led large and unwieldy coalition governments.
Overcoming what Indonesians call "ego sektoral," the prioritization by government agencies of narrow self-interest over the common good, is extremely tough. Competing power centers and levels of government are a feature, not a quirk, of Indonesian democracy.
If Prabowo is to sustainably boost economic growth and social development over the next four-and-a-half years, he will need to bring more discipline to his administration, rather than displays of military authority.
He will need to articulate his aims more clearly and consistently, and consult beyond his close-knit inner circle to work out the best ways to deliver his ambitious vision for Indonesia.
Given tight budget constraints and a gloomy global economic outlook, the government should reassess its spending priorities to ensure the utmost effectiveness. The free school lunch program, which health experts say is an inefficient way to target the real problem of child malnutrition, should be targeted more carefully to save money and improve outcomes.
As international investors seek opportunities beyond the U.S. and China, Indonesia can profit if it can clarify where foreign capital and talent are welcome and where domestic alternatives are preferred. But that will require a big change from years of flip-flopping between economic nationalism and calls for foreign investment.
Without a refreshed and focused approach, Indonesia risks drifting at a time when the currents of geopolitics and global economics are getting choppier and choppier.