Indonesia : Prabowo Navigates the Issues

Prabowo Subianto cruised to victory in Indonesia’s 2024 presidential election, winning 58 percent in the first round of voting.

Nearly a year later he has initiated numerous new social policies, but there’s concern he may be stumbling early in his first term, with public protests already beginning to make news across the country, and questions being asked over exactly where he is taking Indonesia.

Prabowo’s gigantic campaign pledge was the free lunch in school programme – similar to New Zealand’s in some ways but attempting to deal with a hugely complex phased rollout from three million to 17.5 million schoolchildren in the next year, at an eye-watering cost of US$4.3 billion. If the programme is extended to 83 million children as originally planned, it is estimated to cost a staggering US$28 billion. 

That’s roughly equivalent to the entire New Zealand Health budget.

It’s a popular policy in some quarters of course, but it’s already been difficult to deliver over a country of such immense size, and exactly the same issues have emerged in Indonesia as in NZ in terms of palatability and timeliness of delivery.

But the immense cost has many Indonesians asking whether recent cuts in the public service are being used to pay for it. There are also serious questions about the companies charged with providing the food, with many facing corruption allegations.

Many Indonesian government contracts, including school meal programmes, are prone to procurement fraud, where companies win bids through bribery or political connections rather than merit. Some firm inflate prices, while officials can take payoffs for awarding contracts.

There have been cases where companies delivered poor-quality or even expired food to schools, raising suspicions that funds were being misused. Indonesia’s anti-corruption bodies have identified loopholes in the monitoring of such programmes in the past.  

Last month a number of children were hospitalised in Cianjur, south of Jalarta, after they were served lunches containing bad chicken. Several such episodes have occuired across the country in the last year.

Previous food assistance programmes in Indonesia have been marred by corruption scandals, including the COVID-19 social aid scandal (Bansos) under President Jokowi, where officials embezzled food aid funds.

For many Indonesians, the thought of a single government programme costing $US28 billion dollars is absurd, and most believe there will be rampant corruption if the programme ever reaches a fully national level.

In February 2025, thousands of students organised nationwide demonstrations under the "Dark Indonesia" movement. The protests erupted in response to substantial budget cuts affecting sectors like education and health, implemented in part to fund the free school lunch program. Major protests occurred in cities in Java such as Jakarta, Yogyakarta, and Surabaya, with students expressing concerns over the nation's future under these policies

While Prabowo himself hasn’t been directly implicated, but the scale of the program and Indonesia’s history of corruption in government contracts make it a potential target for abuse.

Transparency and proper oversight will be crucial to ensuring funds benefit children rather than political or business elites – but many Indonesians believe the full programme will simply never be rolled out.

For a former General, defence spending has always been close to Prabowo’s heart.

Indonesia’s defence spending has stagnated at around 0.8 percent of GDP for some time, putting severe constraints on a once-omnipotent military, the TNI. As a former senior member Prabowo recognises that Indonesia needs to spend closer to 2.55 of GDP on the military to modernise an outdated force.

But while that spending target is proving difficult to reach, one of Prabowo’s most stunning Parliamentary reforms has been the success of the Indonesian Military Law earlier this year.

The new law gives the military the right once again to take back many of the civilian authorities it gave away after the collapse of the Suharto regime.

It rolls back laws passed in 2004, which swept away “dwi fungsi,” or dual function, which gave senior military personnel permissions to fill top civilian positions, including that of defence minister and as head of National Intelligence.

The attorney general, the country’s top law enforcement officer, can now again be a uniformed officer within the military’s chain of command, and the new law could allow military personnel to serve on the boards of state-owned enterprises.

The change is being seen as the most serious reversal of civilian oversight of the military since the fall of Suharto in 1998, and the amendments have sparked significant concern among civil society groups and pro-democracy activists.

Critics argue that allowing active-duty military personnel to occupy civilian roles may undermine democratic reforms and blur the distinction between military and civilian spheres - in a disturbing echo of the Suharto “New Order” years.

On the streets, many Indonesians refer to the current situation as “Baru Yang Baru”  ..the “New New Order”.

Despite public protests and opposition from various organisations, the government maintains that these changes are necessary to address evolving geopolitical challenges and enhance national security.

Defence Minister Sjafrie Sjamsoeddin told media the amendments aim to adapt the military's role to contemporary needs, including addressing cyber threats and protecting national interests abroad. But for many Indonesians it’s a disturbing flashback to the 1990’s, and the flagrant nepotism and corruption of the Suharto years.

Prabowo has also announced the launch of the new sovereign wealth fund Daya Anagata Nusantara (Danantara) to support a target of 8% growth.

With the goal of $900 billion in assets under management, the fund would be among the largest  in the world.

The fund is expected to take over all government holdings in state-owned corporations including three key banks: Bank Mandiri, Bank Rakyat Indonesia (BRI) and Bank Negara Indonesia (BNI).

But the markets already have the jitters and investors are concerned,  On March 18, Indonesia’s main stock index slid 7.1 percent over concerns about Prabowo’s economic policies and a global trade war. The Indonesian Stock Exchange is down some 20% from its peak in September 2024, as the foreign money flees.

The Indonesian rupiah has in the last few months approached a record low against the U.S. dollar, a decline directly attributed to investor apprehension regarding the administration's fiscal policies and increased government spending.

From a foreign policy perspective, Indonesia’s leader must deal with the common issues facing  ASEAN leaders dealing with the Trump administration, and the new tariffs which will hurt Indonesia’s export-led economy.

Internally, General Prabowo is largely regarded as having unfinished business with Indonesia’s restive eastern province of West Papua, where he saw military service as a member of the Indonesian Special Forces, Kopassus.

His role in previous military operations in East Timor during the 1980’s and 90’s remains controversial, with accusations of his involvement in the kidnapping and assassination of pro-independence leaders.

Jakarta arguably has little interest in seeking a permanent political solution to West Papuan claims for independence, as it has too much to lose resource-wise. The Prabowo administration also sees the province as a major solution to food self-sufficiency for the nation, an election pledge it has promised to be in place by 2028.

Instead of policy discussions, the TNI recently announced it had redeployed a further 450 troops to the Papua region, bringing the total since Prabowo took office to over 20,000 additional troops.

That has now sparked a new round of threat and counter-threat, leading to many non-Papuans leaving the region

Reports indicate that thousands of West Papuans have recently been forced from their homes due to the increased military presence and operations aimed at suppressing separatist movements.

 Human rights organisations have documented numerous instances of violence and repression, and called for an increased international attention to the situation.

The United Liberation Movement for West Papua (ULMWP) remains active in advocating for self-determination and increased international support.

In March 2025, the ULMWP held a historic meeting with New Caledonia’s Front de Libération Nationale Kanak et Socialiste (FLNKS) in the European Parliament, signalling strengthened alliances among indigenous and independence movements.

Additionally, indigenous leaders and activists have called for international boycotts of products linked to environmental degradation in West Papua. Boycotts on products like KitKat and Oreo have been demanded, citing the destruction of rainforests for palm oil plantations. ​

 The new attention to the province from Prabowo, and the heavy hand of the TNI, has only opened old wounds and reinforced the belief among indigenous groups that the province is under occupation.

Just this week the topic has again been in the headlines, as the Indonesian Presient pushes on with a project to write an "official" history of Indonesia, but one that leaves out key events.

Indonesia's Ministry of Culture claims the official history is urgently required to establish a strong national identity, "eliminate colonial bias", and address contemporary challenges.

The government's account has drawn criticism for historians as it omits major events in Indonesia's contemporary history, such as the 1997 financial crisis, the anti-Suharto protests and the violent crackdowns that followed, and the eventual fall of Suharto's regime.

Its just another headache on a growing list of issues for the new Indonesian President.

Asia Media Centre