OTR : Indonesia's Student Protests Reflect Deeper Economic Concerns

Hundreds of Indonesian students took to the streets of Jakarta last week, with organisers saying around 1,500 joined the march, carrying a stark warning for President Prabowo Subianto: Indonesia, they say, is heading towards bankruptcy.

Marching under the slogan Menuju Indonesia Bangkrut ("Heading Towards Bankruptcy"), the protesters demanded lower fuel and food prices and an end to what they described as wasteful government spending. But beneath the chants, placards and clashes with police lay a deeper anxiety about the future of Southeast Asia's largest economy.

At the centre of that debate is a question increasingly being asked not only by students, but also by economists and investors: can Indonesia afford Prabowo's ambitions?

From fuel prices to a broader reckoning

The protests took place in Jakarta on 12 June, with students marching towards the capital's iconic Hotel Indonesia Roundabout, known locally as Bundaran HI.

Reuters and CNA described the crowd as numbering in the hundreds, while organisers told Al Jazeera that around 1,500 students took part. Around 6,000 police and military personnel were deployed to secure the protest route. Scuffles broke out after organisers said protesters had been prevented from reaching the designated protest site.

Dressed in their university jackets, students held signs reading "Cancel the fuel price hike" and a "Wall of Shame" directed at members of Prabowo's Cabinet.

The immediate trigger for the protests was the government's decision to raise prices for non-subsidised fuel products earlier this month. Pertamax, one of Indonesia's most widely used non-subsidised fuels and popular among the country's middle class, rose from Rp12,300 to Rp16,250 per litre, an increase of more than 32 per cent, while Pertamax Green climbed from Rp12,900 to Rp17,000 per litre. Tempo reported that economists warned the biggest impact would not necessarily be on inflation, but on household purchasing power, particularly among middle-income Indonesians already contending with a weakening rupiah and rising living costs. The increase, they argued, risked curbing domestic consumption, which accounts for more than half of Indonesia's GDP.

Kuwait Times reported that the government had long relied on subsidies to shield consumers from fluctuations in global oil markets. However, the spike in crude prices linked to the Iran conflict, combined with mounting fiscal pressures stemming from Prabowo's ambitious spending plans, prompted what the publication described as a "substantial price rise" earlier this month. But while the fuel hike may have been the spark that brought students onto the streets, the grievances quickly broadened into a wider critique of the government's economic priorities.

According to Yatalathof Ma'shum Imawan, a student leader from the University of Indonesia, protesters presented five demands:

• lower fuel prices;

• lower prices for staple foods;

• the cancellation of Prabowo's flagship free meals programme;

• the cancellation of the village cooperatives initiative; and

• an end to what they described as "wasteful" government spending.

Students also criticised the growing role of the military in civilian affairs, arguing that it risks rolling back democratic gains achieved since the end of Suharto's authoritarian rule.

"We want to show that things are not okay. We don't want Indonesia to truly go bankrupt, but these behaviours prove that Indonesia will go bankrupt economically, democratically, and morally," Imawan told Reuters on behalf of the organisers of the rally.

The programme at the heart of the protests

One of the most striking aspects of the demonstrations was the anger directed at Prabowo's signature Free Nutritious Meals programme.

Introduced as a centrepiece of his successful 2024 presidential campaign, the initiative aims to provide meals to around 83 million schoolchildren and pregnant women across Indonesia.

Supporters argue it is exactly the kind of long-term investment Indonesia needs. Government officials have described it as an investment in the country's future, saying it will reduce malnutrition, improve educational outcomes and strengthen human capital. BBC reported that authorities continue to defend the programme in these terms.

But critics argue that the issue is not whether children should be fed. It is whether Indonesia can afford a programme of this scale at a time of mounting economic pressure.

The initiative is estimated to cost around US$15 billion annually. In recent months, it has also been dogged by allegations of corruption and implementation failures.

Earlier this month, Prabowo dismissed the head of the agency overseeing the programme following governance concerns. Food poisoning incidents linked to the scheme have also raised questions about oversight and quality control.

For many students, the programme has become symbolic of what they see as misplaced priorities.

"Wasteful spending on free meals has led to a fiscal situation where subsidies initially provided had been withdrawn," student protester Rafael Arreva said during the demonstration. Reuters reported that Arreva made the remarks while standing in front of a police blockade.

The government has pushed back against those claims.

Presidential Communications Office chief Muhammad Qodari said the protests reflected a healthy democracy and insisted the administration was listening to public concerns. He added that the government had already reduced unnecessary spending and maintained that the free meals programme was intended to "safeguard public health".

An economy under pressure

Indonesia is not facing economic collapse. Official figures showed the economy expanding by 5.6 per cent in the first quarter of 2026, although some economists have questioned the reliability of the data. The World Bank expects growth to moderate to around 5 per cent this year. Yet the protests suggest that many Indonesians are looking beyond headline growth figures. For students grappling with rising fuel and food prices, a weakening rupiah and uncertainty about the country's economic direction, strong GDP numbers offer little reassurance. The concern is less about whether Indonesia is growing, and more about whether that growth is translating into economic security and whether the government's spending priorities reflect the realities faced by ordinary people.

Prabowo has set an ambitious target of achieving 8 per cent annual growth by 2029 as Indonesia seeks to become a high-income nation by 2045.

The challenge is that those ambitions are unfolding against a backdrop of weakening investor confidence, rising spending commitments and a deteriorating external environment.

East Asia Forum recently described Indonesia's predicament as a looming "crisis of economic confidence".

"Prabowo's presidency is shaping up as a test of Sadli's law," the publication observed, referring to economist Mohammad Sadli's famous remark that "bad times may produce good economic policies and good times frequently the reverse". Reported by East Asia Forum.

The publication argued that concerns extend beyond the free meals programme itself. Investors have become increasingly uneasy about what it characterised as Prabowo's more interventionist and nationalist approach to economic policymaking, particularly at a time when Indonesia remains vulnerable to external shocks.

Prabowo, however, has rejected suggestions that his government's priorities are misplaced. Responding to criticism over his frequent overseas travel, which has also come under scrutiny as Indonesia tightens spending, he argued that the trips were necessary to protect Indonesia's interests and secure economic opportunities for its people.

"People think I like to travel but I travel to take care of my people as well," he said in remarks reported by local outlet Detik. CNA also reported that Prabowo defended his active diplomacy by pointing to Indonesia's longstanding "free and active" foreign policy tradition. "A thousand friends are too few. One enemy is too many," he said, adding that maintaining good relations abroad was essential to advancing Indonesia's national interests and creating jobs at home.

For Prabowo, ambitious social programmes and an assertive diplomatic approach are investments in Indonesia's future. His critics, however, increasingly question whether the country can sustain the costs of those ambitions at a time of mounting fiscal pressures and weakening investor confidence.

The Iran war exposed existing vulnerabilities

The timing of the protests is significant.

Indonesia is a net importer of oil, making it particularly vulnerable to rising energy prices.

The conflict involving Iran has pushed up global crude prices, placing additional pressure on the government's budget and trade balance. Initially, Jakarta absorbed much of the shock through fuel subsidies. But as fiscal pressures mounted, the government raised prices for some fuel products by more than 30 per cent, fuelling public frustration.

The rupiah has also come under intense pressure.

Al Jazeera reported that Indonesia's currency recently breached the psychological threshold of 18,000 rupiah to the US dollar, its weakest level on record. Earlier this year, it had traded closer to 16,000 against the dollar. Reported by Al Jazeera, citing AFP and Reuters.

The Straits Times reported that Indonesia's stock market had lost about a third of its value since the start of 2026, making it one of the world's weakest performers this year.

The Iran war did not create Indonesia's vulnerabilities, rather, it exposed them.

As East Asia Forum argued, the weakening rupiah has become "a barometer" of deeper concerns about Indonesia's structural challenges and the policy choices being made under Prabowo's administration. A prolonged slide in the currency, it warned, risks compounding worries about public finances and investor confidence.

The publication noted that difficult choices now lie ahead. Sustained support for households, it argued, would require "hard choices about spending on Prabowo's pet programs" at a time when the government is in no position to undermine investor confidence by significantly expanding deficits.

More than a student protest

Indonesia has a long history of student activism, with university movements often emerging as the conscience of the nation during moments of political uncertainty and reform. The demonstrations in Jakarta are nowhere near the scale of the protests that helped topple Suharto nearly three decades ago, nor do they suggest that Indonesia is on the brink of collapse. What they do reveal, however, is a growing debate over the country's economic direction and the trade-offs that come with Prabowo Subianto's vision for Indonesia's future.

Prabowo has argued that ambitious social programmes and a stronger role for the state are necessary if Indonesia is to escape the middle-income trap and achieve developed-country status by 2045. His critics do not necessarily dispute those goals. Rather, they question whether the country can sustain the costs of those ambitions at a time of mounting fiscal pressures, a weakening currency and increasingly nervous investors.

Indonesia remains one of Asia's most promising economies, buoyed by its young population, abundant natural resources and growing strategic importance. Yet the students marching through Jakarta last week suggest that Prabowo's biggest political challenge may not come from opposition parties, but from a generation asking whether the foundations being laid today are strong enough to support the future they have been promised. They are not predicting Indonesia's collapse. They are asking what price the country is willing to pay for its aspirations.

-Asia Media Centre