PRESIDENT Prabowo Subianto and Vice President Gibran Rakabuming Raka have begun ful„lling their populist promises, such as the Free Nutritious Meals (MBG) program launched on January 6, 2025, with a budget of IDR 71 trillion. Other “relief” initiatives include aid for orphans, the Family Hope Program, and food card programs. Additionally, 10 kilograms of rice aid was distributed in January-February 2025.

Social assistance (bansos) is crucial for the population, as 70% of Indonesians belong to the middle and lower-income groups, categorized as poor or vulnerable. The MBG program has received widespread public support from lower-income groups. However, populist policies alone are not enough to maintain public trust. Structural issues, such as supporting the middle class—the main taxpayers—must also be addressed.

The administration’s long-term support hinges on President Prabowo ful„lling his promises: to eradicate poverty and achieve 8% economic growth. However, these goals seem challenging as Indonesia’s GDP growth machinery lacks the capacity to exceed 6%.

Between 2014 and 2024, Indonesia’s average economic growth was only 4.11% annually—or 4.90% if the pandemic year 2020 is excluded. Since the reform era began in 1998, Indonesia has not achieved 7% growth. Growth rates above 7% were last seen during the New Order era in 1977, 1978, 1980, 1981, 1989, and 1990.

In its 2024 Article IV Consultation, the International Monetary Fund (IMF) projected that Indonesia’s economy would grow at a steady 5.1% annually from 2025 to 2029. While this „gure slightly exceeds the Jokowi administration’s growth, it falls short of what is required to realize Prabowo’s vision. Indonesia possesses vast economic resources, including abundant natural resources and a predominantly productive-age population.

Indonesia holds the world’s largest nickel reserves, amounting to 72 million tons (52% of global reserves). It has the world’s sixth-largest coal reserves at 134.24 billion tons, enough to meet domestic needs for 500 years, assuming an annual consumption of 250 million tons. The country ranks sixth in global bauxite reserves, as much as 28 million tons, with exploration potential of 1.200 million tons.

Additionally, Indonesia boasts the second-largest tin reserves globally, possesses rare earth metals, and produces commodities like palm oil, rubber, and „sheries products. Indonesia is the world’s largest palm oil producer, with annual production reaching 45…46 million metric tons.

With such wealth, no one in Indonesia should live in poverty. These resources could generate signi„cant revenue for infrastructure development and free meal programs without relying on debt or aggressive tax collection.

However, Indonesia’s natural wealth has not translated into widespread prosperity. Despite extensive debt-funded investments, economic growth remains sluggish, struggling to surpass 4%, hindered by numerous economic ailments. According to Infobank Research Bureau, 13 economic challenges impede high growth.

1.      CORRUPTION AND FINANCIAL LEAKAGES

Corruption and rent-seeking behavior remain Indonesia’s primary economic enemies. Between 2014 and 2024, the Corruption Eradication Commission (KPK) recorded 1,313 corruption cases, mostly involving district governments (556 cases), ministries/agencies (357 cases), provincial governments (178 cases), state-owned enterprises (178 cases), and the House of Representatives (52 cases). Transparency International’s 2023 Corruption Perceptions Index ranked Indonesia 115th, down from 110th in 2022 and 96th in 2021.

Financial leakages occur through various means, such as „ctitious projects, abandoned projects, in¦ated costs, bribery, speci„cation manipulation, program duplication, irrelevant projects, and ine§cient programs. Lost state revenue results from collusion between tax o§cials, who double as tax consultants, and taxpayers, as well as tax evasion in the natural resource sector.

Corruption crimes in Indonesia have spiraled out of control since President Jokowi’s administration weakened the Corruption Eradication Commission (KPK) in 2019 through a revision of the KPK Law. The year 2024 has been marked by a series of disappointing cases that indicate law enforcement is failing to deter perpetrators of corruption. Most recently, the defendants in the corruption case involving tin mining governance received light sentences. Despite this, an audit by the Financial and Development Supervisory Agency (BPKP) and evidence presented during the trial proved that PT Timah’s corruption caused the state a loss of IDR 300 trillion.

Indonesia has become one of the most corrupt countries. Out of 180 countries surveyed in 2023, Transparency International ranked Indonesia 115th with a Corruption Perceptions Index (CPI) score of only 34. The score remains stagnant, and the ranking has dropped from the previous year’s position at 110. This indicates that other countries have improved their e©ectiveness in combating corruption.

As part of his Asta Cita program, President Prabowo Subianto aims to strengthen political, legal, and bureaucratic reforms and bolster corruption prevention measures. During his campaign, Prabowo also promised to pursue corrupt individuals even to Antarctica. However, the public doubts the future of corruption eradication under Prabowo’s administration. So far, there has been no groundbreaking action from the government to combat corruption. The Corruption Eradication Commission (KPK) is perceived to be too closely tied to practical political dynamics, which it should avoid. The House of Representatives (DPR) has yet to discuss the Asset Con„scation Bill, while President Prabowo has expressed a willingness to pardon corruptors who are willing to return their stolen assets.

2.   THE WEAKENED GAVEL OF JUSTICE

The enforcement of law in Indonesia is deeply ironic. The public perceives the legal system as harsh on the weak but lenient toward the powerful. Corruption among o§cials allows the legal system to be easily manipulated, often failing to side with victims. A striking example is the arrest of the Surabaya District Court Chief with IDR 21 billion in bribes from defendant Ronald Tannur, who fatally assaulted his girlfriend, Dini Sera Afrianti. Ronald, the son of an Indonesian House of Representatives member from East Nusa Tenggara, Edward Tannur, was able to buy his way to a favorable verdict from three judges who ultimately acquitted him.

The gavel of justice held by judges no longer holds its sanctity within Indonesia’s legal system. Evidence of judicial corruption remains, as seen in the arrest of Zarof Ricar, a former Supreme Court o§cial allegedly acting as a “broker” for appeals in the Ronald Tannur case. Authorities con„scated over IDR 920 billion and 51 kilograms of Antam gold from Zarof’s residence.

Because the legal system favors those with power and money, it fails to deter corruption. For instance, corruption in the tin trade between 2015 and 2022 caused IDR 300 trillion in losses and widespread environmental damage. By late 2024, ten defendants received light sentences, averaging half the prosecutor’s demands. These included businessman Harvey Moeis, sentenced to 6.5 years and „ned IDR 1 billion, and PT Timah Tbk CEO (2016…2021) Mochtar Riza Pahlevi Tabrani, sentenced to 8 years with a „ne of IDR 750 million.

The weak state of law enforcement in Indonesia is re¦ected in the World Justice Project (WJP) data. The Rule of Law Index (RLI) for Indonesia in 2023 was 0.53, unchanged from the previous year. This score placed Indonesia 66th out of 142 countries globally and ninth out of 15 countries in the region.

The RLI is calculated based on eight indicators. Indonesia’s highest score came from order and security at 0.71, below the regional average of 0.79 and the global average of 0.72. The indicators for constraints on government powers scored 0.66, regulatory enforcement 0.57, open government 0.55, fundamental rights 0.50, civil justice 0.47, and the lowest scores—0.40—were recorded for the absence of corruption and criminal justice.

3.   ONLINE GAMBLING DESTROYS COMMUNITY’S ECONOMY

The struggling economy is further eroded by online gambling (judol), which has reached emergency levels. Despite forming an Integrated Task Force (Satgas) under Presidential Decree No. 21 of 2024 to combat online gambling, the government has been slow to act. The turnover of online gambling ballooned from IDR 327 trillion in 2023 to nearly IDR 1,000 trillion. The larger the gambling market, the more money ¦ows out of the country.

The number of online gamblers has reached nearly 9 million, with 80,000 under the age of 10. “The majority of players are from lower-income groups, including 97,000 members of the military and police and 1.9 million private-sector employees. (Among them), 80,000 are under 10 years old,” said Coordinating Minister for Political, Legal, and Security A©airs Budi Gunawan during a press conference at the Ministry of Communications and Digital (Komdigi), late last year.

Once again, weak law enforcement and corrupt bureaucracy are to blame. Late last year, police revealed the bribes website operators must pay to avoid their gambling sites being blocked. Operators reportedly paid IDR 24 million to reopen blocked sites through corrupt o§cials within Komdigi.

Many gambling bosses roam freely, while gamblers are seen as victims and receive social assistance. In Singapore, online gambling can result in „nes of SGD 5,000 and six months of imprisonment, while in Malaysia, o©enders face „nes of RM 3,000 and one month of jail time.

The impact of online gambling is alarming. Many citizens become addicted, fall into debt through online loans (pindar), and eventually resort to suicide. Nearly 80% of online gamblers come from lower-income groups, posing a signi„cant threat to the nation. Structural poverty worsens, and online gambling damages and weakens the economy.

4.   FISCAL POLICY HIDING A TIME BOMB

The national budget (APBN) poses a ticking time bomb if predominantly allocated for non-productive activities and „nanced through debt. From the IDR 3,621.3 trillion budget in 2025, a signi„cant portion—IDR 1,350 trillion or 37.85%—is earmarked for debt payments, consisting of IDR 800.3 trillion in principal and IDR 552.9 trillion in interest. President Prabowo Subianto’s administration inherited a towering debt of IDR 8,680 trillion as of November 2024 from Joko Widodo’s government. This massive debt results from low tax ratios and extensive infrastructure development, weapons procurement, and distribution of social assistance (bansos).

While much of this debt was for productive purposes like infrastructure, high levels of ine§ciency in government spending persist. This is indicated by Indonesia’s Incremental Capital Output Ratio (ICOR), which averaged 5.7 from 2000 to 2004 and climbed to 6.9 in 2023. A high ICOR suggests signi„cant ine§ciencies or leakages in development spending. Compared to Singapore’s ideal ICOR of 3…4, Indonesia’s ine§ciency or leakage rate reaches 70%. Thus, despite mounting government debt, economic growth remains stagnant at around 4.5%-5%.

Another non-productive expense is personnel spending, budgeted at IDR 513.22 trillion in 2025, up from IDR 460.86 trillion in 2024. This increase is a direct result of the bureaucratic expansion under President Prabowo. The number of ministers rose from 34 to 48, with an additional 56 deputy ministers and 5 agency heads. The creation of new bodies has resulted in 137 top government positions. Within just one year, personnel costs have surged by IDR 52.36 trillion.

Further non-productive expenditures include social assistance programs like the Nutrition-Free Meal Program (MBG), initially allocated IDR 71 trillion in January and requiring an additional IDR 100 trillion to target 82.9 million beneficiaries this year.

On the revenue side, state income, particularly tax revenue, remains suboptimal due to two key issues. First, low per capita income, estimated at USD 4,470…USD 5,500 in 2024. Second, poor bureaucratic integrity, leading to tax leakages and lost potential revenues. For example, Hasjim Djojohadikusumo highlighted 300 tax evaders in the natural resource sector that cost the state IDR 300 trillion in lost revenue. This „gure, derived from information provided by Luhut Binsar Pandjaitan and BPKP Head Muhammad Yusuf Ateh, was corroborated by the Ministry of Environment and Forestry (KLHK).

The tax-to-GDP ratio has declined from 19.1% in 1990 to 16.3% in 1999, 10.8% in 2014, 9.8% in 2019, and approximately 10% in 2023. To increase this ratio, the government raised VAT from 11% to 12% this year and imposed additional levies such as “opsen” taxes for vehicle owners. These levies include Vehicle Transfer Fees (BBNKB), Motor Vehicle Taxes (PKB), additional PKB, additional BBNKB, SWDKLLJ, vehicle registration fees (STNK), and license plate administration fees (TNKB).

5.   THE RICH WILL GET RICHER, THE POOR WILL GET POORER

Wealth inequality in Indonesia is worsening. The wealth of the country’s 50 richest individuals amounts to USD 262.67 billion, according to Forbes—equivalent to the wealth of 50 million Indonesians or 17% more than the 2025 APBN budget of IDR 3,621.3 trillion. During the New Order era, the wealth of the top 300 conglomerates was only 75% of the national budget, highlighting the growing wealth gap.

The ratio as of September 2024 stands at 0.402, unchanged from a decade earlier. Wealth inequality is also evident in banking deposit distributions. Of the 609.21 million bank accounts, only 0.02% hold balances exceeding IDR 5 billion, yet these accounts represent 53.13% of the total deposits of IDR 8,873.15 trillion as of December 2024. The average balance for the 144,476 accounts exceeding IDR 5 billion is IDR 32 billion per account.

Meanwhile, 98.83% of bank accounts hold balances below IDR 100 million. Unfortunately, the average balance for accounts under IDR 100 million has steadily declined, from IDR 2.98 million in 2019 to IDR 1.83 million in 2024.

6.      LIMITED JOB OPPORTUNITIES

Mass layo©s (PHK) have exacerbated the di§culty of „nding formal employment. Data from the Central Bureau of Statistics (BPS) shows a decline in formal job absorption: from 15.61 million in 2009…2014 to 8.55 million in 2014…2019, and just 2.00 million in 2019…2024. Of the 142.18 million employed individuals, 67.7% have only completed high school or less, and 59% work in the informal sector due to a sluggish manufacturing industry and the impact of digitalization.

The contraction of the manufacturing and agricultural sectors, which traditionally absorb large numbers of workers, has further limited job availability. Of the 144.64 million workforce, 28.18% are employed in agriculture, forestry, and „sheries, though agriculture’s contribution to GDP has dropped to 13.71%. Similarly, manufacturing employs 13.83% of the workforce, but its GDP contribution fell to 19.02% in September 2024.

Mass layo©s are expected to continue. The Ministry of Manpower has warned that the wave of layo©s will persist into 2025. Deputy Minister Immanuel Ebenezer indicated that 60 companies plan layo©s soon. In 2024, layo©s surged to 77,965 people, up from 64,855 in 2023 and 25,114 in 2022.

7.      THE THREAT OF DEINDUSTRIALIZATION AND HIGH ICOR

The manufacturing industry is a vital engine for GDP growth, job creation, and export performance. However, a deindustrialization trend has been occurring for over two decades. The manufacturing sector’s contribution to GDP has consistently declined from 27.41% in 2005, 22.04% in 2010, 21.08% in 2014, 20.99% in 2015, 20.52% in 2016, 20.16% in 2017, 19.86% in 2018, 19.70% in 2019, 19.87% in 2020, 19.24% in 2021, 18.34% in 2022, 18.67% in 2023, and 18.52% in the „rst half of 2024.

The weakening of the manufacturing sector is attributed to competitiveness issues, making its products less competitive compared to those of other countries. To improve manufacturing performance, the government should provide incentives, ensure easy access to raw materials and ener®y at competitive costs, reduce logistics expenses, streamline bureaucratic processes, and protect domestic markets. This is critical as the sector faces competition from legal imports subjected to dumping due to oversupply in their countries of origin.

The government is accelerating the downstream processing of natural resources (SDA). According to the Strategic Investment Downstream Roadmap of Indonesia 2023¯2035 (Peta Jalan Hilirisasi Investasi Strategis Indonesia Tahun 2023 – 2035), 21 commodities are prioritized for downstreaming e©orts, including coal, nickel, tin, copper, bauxite, steel, silver, buton asphalt, oil, natural gas, palm oil, coconut, rubber, biofuel, wood, pine resin, shrimp, „sh, crabs, seaweed, and salt. The Ministry of Industry targets manufacturing contributions to GDP to increase to 20.92% by 2029. This year, manufacturing sector growth is projected at 7.29%, rising to 8.59% by 2028.

Nevertheless, the long-term sustainability of industrialization must be considered, as natural resources will eventually be depleted. Indonesia must transform its trade structure from labor- and resource-intensive to capital-intensive and innovation-driven industries. In countries that have transitioned to high-income status, exports are not solely reliant on surplus production but are driven by technological innovation that enables product diversi„cation.

8.      FRAGILE RUPIAH, HIGH INFLATION, AND INTEREST RATES

The rupiah, Indonesia’s proud currency, often leaves businesses anxious due to its susceptibility to depreciation against the US dollar. As of this writing, the rupiah is valued at IDR 16,367 per USD, its weakest level in four years. It ranks as the sixth weakest currency globally.

As of January 18, 2024, the world’s weakest currencies are: 1) Venezuela’s Boliviar (VEF 5,620,940 per USD), 2) Iran’s Rial (IRR 42,087.50 per USD), 3) Vietnam’s Dong (VND 25,080 per USD), 4) Sierra Leone’s Leone (SLL 22,700 per USD), 5) Laos’ Kip (Kip 21,772.40 per USD).

The rupiah’s depreciation is driven by high demand for USD due to elevated imports relative to exports. Despite trade and payment surpluses in 2024, the rupiah continues to weaken. Indonesia’s balance of payments recorded a surplus of USD 5.9 billion in Q3…2024, while the trade balance achieved a USD 31.04 billion surplus, driven by exports worth USD 264.7 billion and imports of USD 233.66 billion. However, this surplus narrowed from USD 36.93 billion in 2023.

Another contributing factor is the ¦ight of export earnings (DHE), with businesses preferring to park their funds abroad. President Prabowo’s administration plans to revise DHE regulations, requiring 100% of earnings to be stored domestically for one year, compared to the previous 30% for three months. This policy aims to reduce exchange rate pressures and increase foreign exchange liquidity in domestic markets.

The rupiah remains fragile due to Indonesia’s twin de„cits—„scal and current account de„cits. The „scal de„cit for 2025 is projected at 2.53% of GDP or IDR 616 trillion, while the current account de„cit in 2024 stands at 0.6% of GDP. Prolonged de„cits risk depleting foreign exchange reserves, increasing the country’s vulnerability in meeting external payment obligations.

Currency depreciation signi„cantly impacts the economy by increasing external debt burdens for both the government and private sector. Rising import costs elevate production expenses, which in turn drive in¦ation, the primary adversary of economic stability. To curb in¦ation, the central bank often tightens monetary policies, leading to higher interest rates. Consequently, borrowing costs rise, loan demand declines, and economic activity slows.

9.      DECLINE IN QUANTITY AND QUALITY OF THE MIDDLE CLASS

The majority of Indonesia’s population belongs to the middle class. However, over the past „ve years, the number of middle-class individuals has been declining, from 57.33 million (21.45%) in 2019 to 53.83 million (19.82%) in 2021, 49.51 million (18.06%) in 2022, 48.27 million (17.44%) in 2023, and just 47.85 million (17.13%) in 2024.

This decline is attributed to factors such as the COVID…19 pandemic, soaring prices, government policies favoring the lower-income population, and the depreciation of the rupiah. In 2025, the middle class is expected to face additional pressures from three factors: 1) rising prices of secondary and tertiary goods due to a stronger USD, 2) the VAT increase to 12% and additional levies such as motor vehicle taxes, 3) shrinking disposable income due to housing and car installment payments, 4) the limited job opportunities.

According to the Center of Economic and Law Studies (Celios), the 12% VAT increase in 2025 will signi„cantly impact Gen Z and the middle to lower-income groups, raising monthly expenses by IDR 354,293 or IDR 4,251,522 annually. This will reduce purchasing power, especially for non-essential goods like entertainment, travel, and luxury items.

The decline in both the size and purchasing power of the middle class automatically slows household consumption growth, which accounts for approximately 54% of GDP. This trend was evident in 2024, when household consumption grew only 4.91% year-on-year in Q3…2024, resulting in GDP growth of 4.95%. In Q2…2024, private consumption grew by 4.93%, with GDP growth at 5.05%.

10.  NEGLECTED EDUCATION

The cancellation of Apple’s investment in Indonesia in 2024 was a wake-up call for the country’s workforce. In addition to uncertainties in incentive negotiations, Apple cited low investment in human capital development and Indonesia’s talent index as reasons for withdrawal. Data shows that Indonesia’s per-student education budget lags behind other ASEAN countries.

The high cost of education also hinders access to higher education. According to 2023 data from Statistics Indonesia (BPS), only 10.15% of the population held a university degree. Most Indonesians aged 15 and older had a high school education (30.22%), followed by elementary school graduates (24.62%), and junior high school graduates (22.74%). Alarmingly, 12.23% of Indonesians still lack any formal education credentials.

This situation impacts Indonesia’s performance in the Programme for International Student Assessment (PISA), which evaluates students’ skills in mathematics, science, and literacy. It highlights gaps in talent readiness and an underdeveloped technological ecosystem. Unlike Malaysia and Vietnam, which boast dedicated technolo®y industrial zones, Indonesia has yet to provide comparable facilities to attract high-tech investors like Apple.

As industries shift from labor-intensive to capital intensive operations, the quality of human resources (HR) has become a primary concern for global investors. According to the World Talent Ranking 2024, Indonesia ranked 46th globally, far behind Singapore (2nd) and Malaysia (33rd). These rankings re¦ect the competency and readiness of local workers to compete in technolo®y-driven industries.

The low education levels also shape Indonesia’s workforce structure, with 55.4% being junior high school graduates or below, and 12.3% high school graduates. This is incompatible with innovation-based industries like Apple. With a workforce dominated by lower education levels, Indonesia’s manufacturing sector has traditionally relied on labor-intensive industries. Unfortunately, even these industries have lost competitiveness, leading to factory closures, such as Bata Shoes.

11.  WEAK FINANCIAL, DIGITAL, AND CYBER LITERACY

Low literacy levels in society impact the quality of life for individuals and the nation. A primary cause of poor literacy is the lack of interest in reading, as highlighted in a survey by Indonesia’s National Library. This aligns with the PISA survey, which ranks Indonesia 60th out of 61 surveyed countries.

Poor literacy limits knowledge and a©ects societal behaviors, leading to issues such as domestic violence, indi©erence to environmental conservation, and involvement in online gambling (judol). Financial illiteracy exacerbates the problem, as judol players often resort to easily accessible online loans.

The inability to „nd jobs and poor „nancial management has resulted in many households facing economic di§culties. According to the 2024 National Financial Literacy and Inclusion Survey (SNLIK), Indonesia’s „nancial inclusion rate is 75.02%, with a „nancial literacy index of 65.43%. The Financial Services Authority aims to raise the „nancial literacy index to 98% by 2045.

12.  ENVIRONMENTAL DAMAGE AND CLIMATE CHANGE

President Prabowo Subianto’s statement about clearing forests for palm oil plantations raised concerns. “Don’t worry about deforestation. Palm oil trees are trees too, right?” he remarked at the National Development Planning Conference for 2025ƒ2029 RPJMN in December 2024.

In addition to expanding plantations, mining operations will also be intensi„ed. Following last year’s issuance of mining permits to religious organizations, universities will now also be involved. A proposed amendment to Law No. 4 of 2009 on Mineral and Coal Mining (Minerba) includes granting universities mining rights. As pillars of critical thought and future development, universities may become tools for economic distribution by the state. Deforestation caused by mining and plantations is set to continue. Prabowo seems to forget that leaders from over 100 countries have pledged to halt and reverse forest loss by 2030. The Forest Declaration Assessment identi„es mining, plantations, and pulp and paper production as primary deforestation drivers. Converting forests into palm oil plantations is a form of deforestation.

A report titled Forest Under Fire: Tracking Progress in 2023 Forest Goals places Indonesia as the second-worst country for deforestation after Brazil, with 1.18 million hectares lost in 2023.

However, the Ministry of Environment and Forestry claimed that only 0.12 million hectares of deforestation occurred in 2023. Still, the cumulative deforestation in Indonesia from 1990 to 2023 is staggering, reaching 14.21 billion hectares—10.09 billion hectares of forests and 4.11 billion hectares of non-forests.

Indonesia must adopt systematic and integrated approaches to natural resource management and climate action. This includes implementing 15 climate action groups outlined in the Folus Net Sink 2030 Operational Plan.

13.  ILLEGAL EXPORTS, IMPORTS, AND TRANSACTIONS

In its „rst 100 days, the Prabowo administration claimed to have successfully thwarted illegal goods smuggling worth IDR 3.7 trillion. However, this discovery pales in comparison to the dark money originating from illegal mining, illegal logging, illegal „shing, online gambling, narcotics trade, cybercrime, and other illicit transactions.

The Financial Transaction Reports and Analysis Center (PPATK) has noted that illicit „nancial ¦ows (IFF) account for 2% to 5% of global GDP. This means that, with Indonesia’s GDP currently at IDR 21,000 trillion, the illicit „nancial ¦ows could amount to IDR 420 billion to IDR 1.05 trillion.

Cross-border illicit „nancial ¦ows from illegal economic activities between countries have increased, exacerbated by virtual assets like cryptocurrency, which are di§cult to trace. Each year, trillions of rupiah leave Indonesia for foreign countries.

Countries like Singapore have long been known as destinations for money from Indonesia, whether legal or illegal. Legal funds may come from dividend repatriation, as Singapore is Indonesia’s largest investor, contributing USD 15.4 billion in 2023, followed by China (USD 7.4 billion), Hong Kong (USD 6.5 billion), Japan (USD 4.6 billion), and Malaysia (USD 4.1 billion).

Illegal funds, however, originate from money acquired, transferred, or used illicitly across borders (illicit „nancial ¦ows). Examples include proceeds from online gambling (judol), such as a case last year that implicated 16 banks in Singapore. Other sources of dark money include narcotics transactions and misinvoicing in export-import activities, particularly for commodities like coal and palm oil.

The United Nations Comtrade, which records global trade transactions, has identi„ed Indonesia as one of the countries with the highest illicit „nancial ¦ows. The modus operandi often involves misinvoicing export import transactions, particularly commodities, to evade taxes, customs duties, and royalties. Research by The Prakarsa calculated that between 2012 and 2021, the value of such evasion in the coal sector reached USD 133.5 billion, and USD 9.7 billion in „sheries—excluding other commodities like tin, copper, palm oil, and others.

The administration of Joko Widodo left behind a challenging economic condition riddled with systemic issues that have stagnated growth. As a leader entrusted with the people’s mandate, President Prabowo Subianto must address these problems. With his populist policy strategies, he can maintain public support during the „rst 100 days of his tenure. However, if these economic ailments are not resolved, the promise of 8% economic growth will be di§cult to achieve.

President Prabowo Subianto and his team surely understand how to tackle these economic issues. The question is whether they will take action. For instance, corruption, ranked as the number one issue, could be addressed by passing the Asset Con„scation Bill, which would deter corrupt individuals and free the nation from corruption. If the legislature delays its passage, the President could issue a Government Regulation in Lieu of Law (Perppu). This includes restoring the powers of the Corruption Eradication Commission (KPK), which were weakened under Jokowi in 2019.

Allowing these 13 economic issues to persist is akin to nurturing potential crises, whether „scal, monetary, industrial, or employment related. History has shown that severe crises in 1965 and 1998 did not occur spontaneously but were the result of unattended issues, while o§cials were too preoccupied with enjoying their power. The job is now to make sure that the 30-year crisis cycle is not going to repeat itself.

Social assistance (bansos) is crucial for the population, as 70% of Indonesians belong to the middle and lower-income groups, categorized as poor or vulnerable. The MBG program has received widespread public support from lower-income groups. However, populist policies alone are not enough to maintain public trust. Structural issues, such as supporting the middle class—the main taxpayers—must also be addressed.