Indonesia's economic policy direction under President Prabowo Subianto faces mounting criticism from leading economists who warn that ambitious growth targets risk undermining fiscal stability in Southeast Asia's largest economy.
In a research dissemination titled "Prabowonomics: Can Indonesia Really Grow at 8%" held on March 13, economists from three prominent institutions delivered a unified message: the government's focus on short-term demand stimulus rather than structural reform threatens long-term prosperity for the nation's 280 million citizens.
Rizkia Nauli Siregar, a researcher at the Institute for Economic and Social Research at the University of Indonesia (LPEM UI), argued that current policy implementation risks becoming counterproductive while private sector investment remains stagnant. "The focus is on market demand, unconventional monetary policy, and state-led capitalism, rather than on productivity improvements," she explained.
The criticism centers on several flagship programs, particularly the Free Nutritious Meals (MBG) initiative, which has become the largest single expenditure in the national budget. Riandy Laksono, a researcher at the Center for Strategic and International Studies (CSIS), questioned whether the program delivers sufficient economic multiplier effects to justify its cost. "MBG funding was diverted from other budget lines. Government infrastructure spending, which has proven multiplier effects, was cut. We've never received clarification on whether MBG's multiplier effect exceeds the value pulled from other programs," he stated.
The government's decision to import 105,000 pickup trucks from India for village cooperatives has emerged as another flashpoint. described it as emblematic of state-led capitalism creating market friction. she noted.
