Former military general Prabowo Subianto is set to be inaugurated as the president of Indonesia, with plans to enhance economic growth and assert a larger international presence for the largest economy in Southeast Asia. Prabowo, aged 73, will succeed Joko Widodo, following a decisive victory in the presidential election held in February. Gibran Rakabuming Raka, the eldest son of his predecessor, will be inaugurated as his deputy.
Prabowo’s inauguration marks a significant reversal of fortunes for the former commander of Indonesia’s special forces, who was previously dismissed from the military and barred from entering the US over allegations of kidnapping democracy activists — allegations that he has consistently denied. The former general gained the support of millions of Indonesians, partly due to the endorsement from the highly popular Widodo, and by pledging to maintain policy continuity along with initiatives such as free school lunches, a program projected to cost $28 billion. Additionally, Prabowo has committed to raising Indonesia’s economic growth rate to 8 percent annually, up from the 5 percent rate maintained for over a decade.
However, Prabowo has signaled potential deviations from his predecessor’s approaches in areas such as government spending and foreign policy. He has expressed willingness to increase debt to finance social assistance programs and plans to expand the cabinet by one-third to incorporate political allies. Prabowo aims for Indonesia to adopt a more proactive role on the international stage, contrasting Widodo’s avoidance of international events — notably, never attending the annual UN General Assembly in person during his decade in power. Since the election, Prabowo has made numerous international trips.
Political analyst Kennedy Muslim from Indikator Politik Indonesia noted that Prabowo’s foreign policy focus will significantly depart from Widodo’s, shifting from solely attracting business investments to adopting more strategic geopolitical interests. Prabowo intends to maintain Indonesia’s neutral foreign policy while seeking greater global engagement. As a former defense minister, Prabowo had previously suggested a demilitarized zone and a UN referendum to address the conflict between Ukraine and Russia, although this plan was rejected by Ukraine. This year, he expressed Indonesia’s willingness to send peacekeeping forces to Gaza.
Prabowo’s first foreign visit post-election was to China, where he met President Xi Jinping. China stands as Indonesia’s largest trading partner and the second-largest source of foreign direct investment, contributing significantly to industries such as metals, mining, and infrastructure. Prabowo has also engaged with leaders from Russia, Japan, France, and neighboring Southeast Asian countries.
Domestically, Prabowo is prioritizing social assistance programs, diverging from Widodo’s focus on infrastructure development. His agenda includes ensuring food and energy security, eradicating poverty, and providing free meals and health check-ups. Analyst Brian Lee from Maybank highlighted Prabowo’s immediate focus on addressing social aspects rather than solely national economic growth. Nonetheless, achieving the targeted 8 percent growth rate will necessitate substantial investment, both domestically and from foreign entities.
The Indonesian economy has seen a transformation during Widodo’s tenure, particularly in becoming a key player in the global energy transition due to its abundant nickel reserves. However, GDP growth has not reached Widodo’s initial 7 percent target. Although Prabowo has committed to being investor-friendly, he has yet to outline detailed plans.
An economic adviser to Prabowo emphasized that relying solely on minerals processing would be insufficient to meet GDP targets, advocating for exploring sectors like the digital economy, energy transition, and higher-quality manufacturing as potential growth drivers.
Fiscally, Prabowo intends to adopt a more liberal approach compared to Widodo, especially to support his social programs. His brother and adviser, Hashim Djojohadikusumo, mentioned plans to increase Indonesia’s debt-to-GDP ratio from 39 percent to 50 percent. To accommodate increased debt, Prabowo aims to boost tax revenues and privatize state assets. Although Indonesia’s debt is relatively low compared to regional peers, economists caution that a rapid increase in borrowing could negatively impact the currency, credit rating, and the wider economy.
Prabowo’s team has assured investors of their cautious fiscal approach, yet concerns linger. Helmi Arman, chief Indonesia economist at Citi, warned that Prabowo’s domestic-focused programs might not enhance exports and could strain fiscal resources over time. Moreover, Prabowo must navigate relationships with political allies, most notably former rival, Widodo, who has been keen to preserve his influence and legacy.
Analysts suggest that Widodo might be offered an advisory role, as some of his ministers are anticipated to serve in Prabowo’s administration. The extent of Gibran’s role as vice-president could reflect Widodo’s continued influence. Prabowo aims to establish a larger government, expanding the cabinet from 34 to as many as 46 members, which raises concerns over fiscal expenditure. His advisers explain that the larger government structure aims to satisfy coalition partners.
Indikator Politik’s Kennedy Muslim noted that Prabowo would face inevitable trade-offs, balancing between political stability, internal cohesion, and effective governance within a diverse coalition.
