The Prabowo era is born in Indonesia

JAKARTA – Prabowo Subianto has been inaugurated as Indonesia’s eighth president, marking the end of both outgoing President Joko Widodo’s ten years in office and Prabowo’s own multi-decade quest for the top job.

In his inaugural address to Indonesia’s parliament, Prabowo called on politicians and the nation to be brave in the face of challenges and put the interests of the Indonesian people above all else – including their own private interests.

But, what can we actually expect for the next five years? On the campaign trail, Prabowo, once Widodo’s bitter rival, vowed to be a faithful heir to his predecessor’s policies.

Yet, many expect the famously headstrong former general will go his own way on various fronts. In his inaugural address and cabinet picks announced later, a few key themes emerged: the need for an active foreign policy, a lean toward autarky in economics, a focus on poverty alleviation and a potential shift toward more authoritarian governance.

Foreign policy

“In facing the international world, Indonesia chooses a free and active path, non-aligned,” declared Prabowo, speaking to parliament. “Thus, we want to be friends with all countries, but we have principles, namely anti-colonialism because we have experienced colonization.”

In this light he went on to affirm Indonesia’s support for Palestinian independence – something parliament greeted with raucous cheers.

Indonesia’s principle of non-alignment paired broadly with a Third Worldist orientation is standard fare, suggesting continuity with Widodo, and, indeed, the policies that have guided Indonesia since 1998. However, there are also signs that Prabowo will blaze his own trail.

Widodo basically let the foreign ministry run itself for a decade, taking little interest in foreign affairs beyond their economic aspect. Prabowo, however, takes a much closer personal interest and will likely look to play an active role on the world stage.

This is reflected in the newly appointed foreign minister, Sugiono, a relatively little-known aide to Prabowo. In choosing Sugiono, Prabowo has broken with the post-1998 precedent of appointing a career diplomat to head the ministry.

Prabowo seems to want a foreign minister subordinate to him and with few, if any, loyalties to the powerful ministry civil service.

In his speeches, Prabowo has suggested a desire to play the role of an honest broker in international conflicts. Most notably, at the Shangri La Dialogue in 2023, he surprised many with a proposed peace plan for the Russia-Ukraine war.

Defense diplomacy may well step up. As defense minister, Prabowo oversaw the scaling up of Garuda Shield exercises with the US and the signing of a new military cooperation agreement with Australia, which he spearheaded in his role as Indonesia’s defense minister from 2019 to 2024.

Significantly, his views of the Quad and AUKUS, both seen as aimed at counterbalancing China in the Indo-Pacific, are noticeably more relaxed than many in the Indonesian establishment.

However, this should not be simplistically viewed as Prabowo leaning toward the US and its allies. Indeed, Prabowo’s first overseas visit after his election this year was to China, a reflection of both China’s desire to court Indonesia and Indonesia’s need for Chinese investment to grow its economy. His China visit was then balanced by subsequent visits to Japan and Malaysia.

Prabowo is also expected to take a cautious view on the issue of Israel and Palestine. Unlike many in Indonesia, he declined to criticize moves like Australia’s move of its embassy from Tel Aviv to Jerusalem.

The Indonesian military has long enjoyed quiet relations with Israeli counterparts, giving the armed forces a friendlier view of the country than many in the foreign ministry. Still, public opinion will leave Prabowo limited wiggle room.

Fiscal expansion

“Are we aware that poverty in Indonesia is still too great?” Prabowo asked parliament in his inaugural speech. Prabowo made fighting poverty and its effects a central plank of his campaign.

His signature promises here have been free school meals for children plus nutrition assistance for pregnant women. He has also promised to build three million new houses.

The potential cost of these programs has certain investors and economists worried. There have been suggestions that the school meals program alone could end up costing some 400 trillion rupiah ($25.8 billion) annually.

And, comments by various figures in the Prabowo camp have suggested his government would be willing to allow the national debt to climb from 39% currently to 50%.

However, Prabowo has moved to try and assuage those concerns. Most notably, Indonesia’s totemic Finance Minister Sri Mulyani Indrawati – who served with distinction under Widodo and his predecessor President Susilo Bambang Yudhoyono – has been asked to stay on in her role.

Her reappointment defied expectations that Prabowo would dismiss her, as the two reportedly clashed under Widodo over the defense budget.

However, should tensions between Prabowo and Sri Mulyani recur, it is unclear how they will be handled. Widodo was reportedly key in convincing Prabowo to keep her on. But as Widodo’s influence wanes, so might Prabowo’s patience with a powerful finance minister with a penchant for fiscal prudence.

Notably, Prabowo’s nephew – Thomas Djiwandono – is also staying on as deputy finance minister, a role he was appointed to in July 2024 to help ease the transition to Prabowo’s government. This seemingly suggests Prabowo may eventually want his loyalist in the finance ministry.

Meanwhile, making room for extra spending on social programs might require cuts elsewhere. There have already been signals that Widodo’s signature spending on infrastructure will be scaled back.

And a question mark hangs over how much funding the government will be willing to commit to Widodo’s final mega-project – the new capital Nusantara being built from scratch in Borneo.

Autarky and protectionism

“Brothers and sisters, I have declared that Indonesia must immediately achieve food self-sufficiency in the shortest possible time. We cannot depend on food sources from outside. In a crisis, in a critical situation no one will allow their goods for us to buy,” Prabowo told parliament.

“We also have to be self-sufficient in energy. In a state of tension, in a state of possible war everywhere, we have to be prepared for the worst possible outcome,” he added.

Self-sufficiency in food and fuel were key themes for Prabowo throughout his presidential campaign. Whereas Widodo, with his entrepreneurial background as a furniture exporter, was inclined towards the promotion of international trade, Prabowo’s military background has engendered a different world view.

Prabowo has set extremely ambitious goals, though with serious question marks about their achievability. In his speech, he suggested Indonesia could achieve food self-sufficiency in 4-5 years. And, there are plans for Indonesia to increase its percentage of biodiesel blended with regular fuel from 35% to 50% or even 60%.

However, serious concerns have been raised about the feasibility of these goals. Food estate projects pushed by Prabowo as minister for defense notably flopped. More mega-projects in pursuit of these goals are underway in Papua and attracting critical scrutiny.

The focus on fuel self-sufficiency may also come at the cost of green goals. As sources of energy self-sufficiency, Prabowo cited geothermal, biodiesel and coal. While the first is low emission, the second could prove emission-intensive if paired with logging to grow biodiesel fuel like sugarcane or palm oil. Coal, of course, is anything but green.

Overseeing all of this will be Zulkifli Hasan, who holds the newly created position of Coordinating Minister for Food. As a close political ally of Prabowo who displayed protectionist instincts as trade minister, the pick complements Prabowo’s priorities. However, some may worry about implementation in this apparently central area given Hasan’s patchy record in his previous post.

Meanwhile, the new minister of trade, former civil servant Budi Santoso, is said to be linked to a certain powerful businessman with enormous coal and substantial biodiesel interests.

Whether these protectionist instincts spread to other areas of the economy remains to be seen. Coordinating Minister for Economic Affairs Airlangga Hartarto will continue in his current role and may be a potential counterweight.

Nickel and downstreaming

“We must downstream all the commodities we have. The added value of all those commodities must increase our economic strength so that our people can achieve a prosperous standard of living,” said Prabowo in his speech.

In Indonesia, the heart of “downstreaming” is the nickel industry. A mix of export bans, tax incentives and Chinese investment has made Indonesia the world’s dominant nickel producer. And there are efforts and hopes to extend this into battery and electric vehicle production.

However, the mastermind of the policy under Widodo – Coordinating Minister for Maritime Affairs and Investment Luhut Panjaitan – has retired alongside Widodo. Who will take over the position is unclear – Luhut’s centrality relied more on his personal status than his title – but without guidance, the policy could drift.

The figure now taking point is Minister of Energy and Mineral Resources Bahlil Lahadalia, who is continuing in the role passed to him in the final months of the Widodo administration. A PhD dissertation on the nickel industry was recently published under his name – though some have raised questions about how he apparently completed it in just under two years while serving as a minister.

Despite the PhD’s dubious origins, it could provide some indication of Bahlil’s priorities. Four flagged issues include overreliance on foreign workers, lack of opportunities for local entrepreneurs, a paucity of revenue-sharing with local governments and a lack of post-mining diversification plans.

Authoritarianism

“In the midst of such great ideals and dreams, we need an atmosphere of togetherness, unity, collaboration, not prolonged bickering,” declared Prabowo. He then went on to add, “Let us realize that our democracy must be a democracy that is unique to Indonesia.”

While the comments may seem innocuous, they’ll put a shiver down Prabowo’s critics’ spines. Prabowo has repeatedly criticized democracy in the past, comparing it to a bad habit that’s hard to give up like smoking. He has floated getting rid of direct elections for regional leaders and the president.

The key concept here is musyawarah, which broadly means deliberation. It is often invoked to argue Indonesia’s culture means its politics must be centered on consensus-building and not oppositional. In practice, this usually means a system that leaves little room for criticism and dissent.

Prabowo’s governing coalition now includes every party represented in the national parliament bar one, the Indonesian Democratic Party of Struggle (PDI-P). There were efforts to sew up regional elections by using nomination thresholds to ensure only candidates backed by this big coalition could run, but only a last-minute Constitutional Court ruling nixed the scheme.

This, plus Prabowo’s tendency to blame protests on foreign agitation, has left many worried about the space for opposition under the new government.

Cabinet appointments here provide little reassurance. Minister of Home Affairs Tito Karnavian and Attorney General ST Burhanuddin will continue in their roles, having served during Widodo’s second term when the former president increasingly used legal institutions for political ends.

Meanwhile, new Minister of Law Supratman Andi Agtas and new head of the State Intelligence Agency Muhammad Herindra are both close to Prabowo. New Minister of Communication and Digital Meutya Hafid, a former journalist, is a potential bright spot.

Looking ahead to Prabowo’s new era, many anticipate challenges to media freedoms, tough crackdowns on any protests, and possible changes to election rules. Constitutional changes to repeal or modify liberalizing amendments introduced post-1998, measures that effectively gave birth to Indonesia’s modern democracy, are also not inconceivable considering Prabowo’s known views.