Photo from Instagram/pt_pindad
One feature of President Prabowo Subianto’s leadership is his unwavering confidence. It is evident in nearly every speech he delivers: “I am confident that I am on the right path … I will continue this program (the Free Meal Program)”. Time and again, he asserts, “I believe and am confident that Indonesia’s economy will grow beyond 8%”.
It is perhaps this confidence that enabled him to achieve an 80-percent approval rate in his first 100 days in office, according to a Kompas survey.
But confidence or public perception alone is not enough to bring about substantial progress. This is particularly the case when that confidence merely translates into performative policies that amount to little more than political grandstanding to impress the electorate.
The president needs a reality check — how did he fare, really, in his first 100 days?
The 8% growth target — still a pipe dream
Indonesia will need to go all out in attracting investment if it wants to achieve 8% GDP growth that Prabowo set as the target.
In fact, it will need Rp 13,528 trillion in investment for the next 5 years, which is double the already ambitious Rp 5,823 trillion achieved from 2019 to 2024. Unfortunately, the president is yet to come up with breakthrough policies to achieve that gargantuan task.
The reality is that when investors compare Indonesia to regional neighbours like Vietnam or Thailand, it comes up short. The challenges are clear: high ICOR (investment needed for economic growth efficiency), excessive logistics costs, costly borrowing, and, above all, a chaotic regulatory environment.
Worse, with its current high interest rates, many investors think they’d be better off parking their money in government bonds than risking it in the real sector.
If Prabowo is serious about hitting his ambitious targets, he needs to address these chronic problems. Unfortunately, his policies do not reflect the urgency of doing that.
A bloated and disjointed cabinet
Prabowo’s first blunder was to have created a bloated and disjointed cabinet. With no clear structure of authority or clarity about who does what, it seems his administration has little interest in streamlining bureaucracy.
One of the biggest setbacks is the absence of a “development commander” — a figure with the authority to take charge, align fragmented programs, and cut through inefficiencies. In Soeharto’s era, he had Widjojo Nitisastro and his “economist gang,” powered by a formidable Bappenas. During president Susilo Bambang Yudhoyono’s administration, there was Kuntoro Mangkusubroto and his technocratic UKP4 delivery unit.
What we see now is chaotic implementation — institutions scramble to execute programs that please the boss, often lacking substance.
Misguided economic policy
This absence of a unified and coherent economic policy was visible in the way the government handled the mass layoffs by Sritex, one of Indonesia’s major textile companies.
In October, the Semarang Commercial Court declared Sritex bankrupt, leading to the furlough of 2,500 employees. Prabowo reacted hastily, with a viral video of the Deputy Minister of Manpower making promises on-site, earning applause from the workers chanting Prabowo’s name.
Yet, no clear resolution has emerged. Legal assistance remains uncertain. The promised financial intervention, criticised as a risk to market stability and a moral hazard, has not materialized. Until now, there is still no clear plan to resolve this, and a solution to the crisis remains elusive.
The Sritex debacle is the result of misguided economic policy of the past decade, which focused too heavily on capital-intensive mineral downstreaming and paid little attention to labour-intensive manufacturing.
Commodity “downstreaming”, while crucial for adding value to exports, has been criticized for its vulnerability to fluctuating commodity prices as supply increases. Sritex shows that downstreaming alone cannot stop Indonesia’s growth stagnating at 5%; manufacturing matters too.
Industrialisation, a critical stage for any country’s development, has not been fully achieved in Indonesia. No nation has advanced without it. However, Indonesia’s industrial sector has remained stuck at 29% of GDP since 2000s.
Meanwhile, the rapid rise of the non-tradable service sector has created a gap in labor-intensive jobs and export growth, pushing many with lower levels of education to the informal sector. This is something the new president should have planned to tackle, but did not.
Haphazard policymaking
On November 29, 2024, President Prabowo announced a minimum 6.5% increase in the Provincial Minimum Wage (UMP) for all provinces. The 2025 UMP formulation, as stated in Minister of Manpower Regulation 6/2024, ignores economic growth and inflation as variables, simply increasing the UMP for 2024 by 6.5% without any explanation from the government of how it was arrived at.
This, as analysts say, can create legal uncertainty, since no new regulation has determined how wages are to be calculated since the Omnibus Job Creation Law was passed. The dangers of raising the minimum wage at the wrong time with no solid formulation should not be taken lightly. The move risks harming small and medium-sized businesses by pushing up their costs, potentially triggering layoffs. Ultimately, as many business owners stress, the real issue is not the numbers—it’s the unpredictability.
It is also certainly unusual for the president to personally announce a minimum wage increase, sparking speculation that the policy was made to boost his populist image. If that is the case, then the move is somewhat redundant, given that the next election is still four years away. Its grave implications for here and now, however, cannot be overstated.
Wither technocracy?
It does not help that Prabowo himself seems to have little regard for rational and technocratic advice. His controversial claim that oil palm plants are no different from trees in their contribution to oxygen production and carbon absorption, for example, raised many eyebrows.
This tendency to overlook policy design is also reflected in the recent extensive budget and unclear policy design of Free Meal Program. Simple steps like targeting specific schools and considering students’ socio-economic backgrounds to manage budgets and improve efficiency were not taken. Instead, we’ve seen issues like food stalls in schools going bankrupt, unchecked portion sizes, and concerns about food hygiene.
In February 2025, Prabowo’s boldness—or recklessness—became evident through extreme reallocation of the state budget. In order to reallocate funds to the Free Meal Program, Prabowo boldly slashed most ministerial budgets for what he called ‘efficiency’.
While the idea seemed promising, the lack of a clear implementation plan led to cuts in essential public services. Reports indicate that the budget reductions have resulted in reduced operating hours for the National Library, halted infrastructure maintenance and construction, and a freeze on national research projects.
Substance over optics
Prabowo’s legacy will not be defined by his charisma or confidence, but by the tangible changes he brings to the lives of Indonesians. The president should care more about the impacts of his policies on the country, and less about his public persona. This means more time spent on devising sound policies, and less time worrying about the optics.
In the end, history will judge the president on what he does, not what he says.
