Less than 11 months into his term, Indonesian President Prabowo Subianto faces a stark choice. He could be remembered either as a leader whose presidency was defined by public anger and discontent, or as one who recognized the challenges facing his country and acted in the national interest.
The anti-government protests sweeping Indonesia over the past two weeks are not fleeting outbursts, but the culmination of long-suppressed grievances against abuses of power, the erosion of constitutional norms and the violation of basic human rights. The protesters are not seeking an apology or even sympathy from the president; they demand the chance to live a decent life in which their dignity and human rights are respected and upheld.
Prabowo’s administration has set its sights on making the country the world’s fourth-largest economy by 2045 — a goal that would require sustained annual growth of 8 percent. However, with 68 percent of Indonesia’s population living below the poverty line for upper-middle-income countries, such ambitions mean little if millions of citizens remain trapped in poverty and hardship.
Illustration: Mountain People
Indonesians have experienced rapid growth before, most notably during the long dictatorship of Suharto (1967 to 1998), Prabowo’s former father-in-law. Given that history, they know that lasting and inclusive development gains depend on political and social reform, not strongman rule.
Blaming previous administrations or consolidating power among key parties — which might provide short-term stability, but weakens democratic resilience — would not absolve the current government of responsibility for its decisions today. What Indonesia needs are concrete measures to reduce poverty, create employment opportunities and restore trust in the government.
To heal the country’s deepening social fractures, policymakers must focus on four urgent priorities.
First, they must enforce the separation of powers and eliminate conflicts of interest. Democracy flourishes only when the executive, legislative and judicial branches operate independently, yet in Indonesia, power remains heavily concentrated. Many political parties operate as family-run enterprises, with leaders holding executive roles or wielding outsize influence across institutions. This concentration fosters a culture of impunity and erodes public trust.
Clear ethics rules are essential. Public officials — including the president, Cabinet members and parliamentary leaders — should not hold party posts, positions in state-owned enterprises (SOEs), and private-sector jobs simultaneously. Eliminating these overlaps would reduce corruption, ensure that policies serve citizens rather than private or partisan interests and bolster the credibility of Indonesia’s democratic institutions.
Second, fiscal transparency is critical to delivering better-targeted social assistance and accelerating SOE reform. For two decades, Indonesia’s tax-to-GDP ratio has stagnated at 10 percent to 12 percent. While the budget for next year projects revenues totaling 12 percent of GDP, early figures this year are lagging this target — a shortfall worsened by a decline in commodity revenues.
At the same time, budget pressures continue to mount, underscoring the need for fiscal discipline. The government’s Free Nutritious Meals program is a prime example. Although well-intentioned, it is prohibitively expensive, with a budget of 171 trillion rupiahs (US$10.38 billion) that is expected to rise to 335 trillion rupiahs next year. A more effective approach would be to pilot the program in five underserved regions, at a cost of no more than 5 trillion rupiahs, while engaging with local communities. The remaining funds could be used to support teachers, health professionals and waste-management workers, or finance programs that deliver tangible benefits to low and middle-income households.
Similarly, the new Danantara sovereign wealth fund, with its 300 trillion rupiah budget, is unnecessary. With public debt at 41 percent of GDP, new borrowing should be directed toward productive investment rather than bureaucratic expansion. Reforming existing SOEs would be cheaper, faster and more effective. While consolidation has reduced the number of SOEs from 118 in 2018 to 64 last year, the state still dominates sectors ranging from banking to hospitality, crowding out small enterprises.
Third, civil authority must be bolstered to curb military interference. Military or police intervention in civilian affairs tends to undermine democratic institutions. In Indonesia, where the military continues to wield significant political influence, preserving clear boundaries is particularly important. That means codified institutional checks, stronger civilian oversight and strict adherence to human rights norms. Without these safeguards, Indonesia risks sliding toward the instability seen in Myanmar or in parts of Latin America and Africa.
Lastly, the long-delayed Asset Recovery Bill, which would empower the state to reclaim disproportionate wealth without waiting for a criminal conviction, must be enacted. Crucially, its aim is not to seize assets arbitrarily, but to ensure that stolen public assets are restored to their rightful owners — the people. First drafted in 2008 and submitted to parliament in 2012, the bill has languished for nearly two decades, enabling corrupt actors to plunder public resources with impunity.
By establishing a civil process for recovering unexplained wealth (in rem asset recovery), the law fulfills Indonesia’s obligations under the UN Convention Against Corruption and shows that the government stands with citizens in fighting abuses of power. If Prabowo channels this recovered wealth into education, healthcare and social programs, he could leave a truly transformative legacy.
Indonesia’s leadership could choose to deepen repression, or it could take a different path and bolster democratic governance. Prabowo’s legacy would not be measured by electoral margins, but by whether his government respects human rights, improves healthcare and education, and creates more good jobs. He could be remembered as the president who presided over Indonesia’s largest protests since Suharto, or he could be celebrated as a leader who delivered political, social and economic justice. The choice is his.
Lili Yan Ing, secretary-general of the International Economic Association, is lead adviser for the Southeast Asian region at the Economic Research Institute for ASEAN and East Asia.
Copyright: Project Syndicate
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