FREE MEALS PROGRAMME UNDER SCRUTINY
At the centre of Mr Prabowo’s welfare agenda is his flagship free nutritious meals programme, aimed at combating stunting and malnutrition among children.
Despite food poisoning incidents that have raised concerns over food safety and oversight, the initiative has expanded rapidly to reach more than 57 million beneficiaries nationwide, including schoolchildren, toddlers, breastfeeding mothers and pregnant women.
At least US$15 billion has been earmarked for the initiative in next year’s state budget, underscoring the significant financial resources required to sustain it and intensifying scrutiny of the government’s spending priorities as it simultaneously pursues other costly programmes.
Indonesia’s parliament in September approved Mr Prabowo’s 2027 budget, with spending projected at over US$228 billion.
The growing expenditure has also revived debate over Indonesia’s long-standing fiscal rules.
The country’s annual budget deficit is capped at 3 per cent of gross domestic product, a restriction intended to maintain fiscal discipline and reassure investors.
Some lawmakers have called for a review of that ceiling to give the government greater flexibility to spend.
However, critics warn that relaxing the limit could weaken confidence in Indonesia’s fiscal management.
“That’s very risky because it implies that the government will do anything to raise funds for these priority programmes or projects,” said Bhima Yudhistira Adhinegara, executive director of the Centre of Economic and Law Studies (CELIOS), a Jakarta-based public policy institution.
“The consequence is that investors and creditors may start to view Indonesia as being a little reckless.”
Last Friday (16 Oct), Indonesian stocks suffered their steepest one-day fall in nearly three decades, after index provider MSCI raised the prospect of stripping the country of its “emerging market” status.
ECONOMIC GROWTH OFFERS BRIGHT SPOT
Despite concerns over government spending, Indonesia’s economy has shown resilience.
The economy expanded by 5.45 per cent in the first half of 2026, exceeding economists‘ expectations and prompting the International Monetary Fund (IMF) to raise its full-year growth forecast.
However, a significant portion of that expansion has been driven by public expenditure, raising questions about whether the momentum can be sustained.
Government spending rose 15.97 per cent in the second quarter, following an even sharper increase of 21.81 per cent in Q1.
Analysts say that while higher public spending can stimulate economic activity in the short term, sustained growth will also require stronger private investment, job creation and productivity gains.
That is particularly important for Mr Prabowo, who has set an ambitious target of accelerating Indonesia’s economic growth to 8 per cent annually.
Last month, Mr Prabowo appointed Mr Suahasil Nazara as finance minister, placing him at the centre of efforts to balance the administration’s spending ambitions with fiscal discipline.
Mr Suahasil has pledged to maintain the budget deficit below the statutory ceiling of 3 per cent of GDP, signalling continuity in the government’s commitment to fiscal prudence.
However, the pressure to finance expensive welfare initiatives, infrastructure development and other national priorities could test that commitment in the years ahead.
CABINET SHAKE-UPS RAISE POLITICAL QUESTIONS
Economic challenges are not the only pressures confronting Mr Prabowo as he begins the second half of his five-year presidential term.
This month, he carried out his seventh and largest cabinet reshuffle, replacing several high-profile figures overseeing key economic, diplomatic and security portfolios.
Political observers say the shake-ups could be aimed at tightening his grip on the ruling coalition and ensuring that ministers remain aligned with his priorities, amid signs of declining public approval.
They caution that the coalition’s cohesion could face growing challenges as political parties begin positioning themselves for the 2029 general election, especially if public dissatisfaction with the administration grows.
“Part of the reason why the coalition is so intact now is because everybody is compliant with Mr Prabowo … because they expect political incentives,” said Mr Djayadi Hanan, head of the political science programme at Indonesian International Islamic University.
“With the fact that the public is having more and more gap with the president, indicated at least by the very low approval rating, the political parties (looking ahead at) the next election will think (if) it’s worth it being on the side of the president.”
Further complications could emerge from efforts by some political parties to impeach Vice President Gibran Rakabuming Raka. Mr Gibran, the eldest son of former president Joko Widodo, has faced growing scrutiny over his educational credentials.
The Constitutional Court has dismissed a legal challenge seeking his disqualification on procedural grounds, but continued questions surrounding his vice presidency could become another source of political tension.
The issue is particularly sensitive given Mr Gibran’s ties to his father, whose support played a significant role in the political alliance that brought Mr Prabowo to power in 2024.
HAZE CLOUDING FOREIGN RELATIONS
Beyond economic and political pressures, the administration is also grappling with a major environmental crisis.
Forest and land fires have been raging across parts of Indonesia for more than two months, triggering transboundary haze and raising concerns about air quality across the region.
More than 60,000 firefighters have been deployed to contain the blazes.
Indonesia has long struggled with recurring forest and peatland fires, particularly during prolonged dry periods. The resulting haze poses public health risks, disrupts economic activity and can strain diplomatic relations with neighbouring countries.
During a hybrid limited cabinet meeting last week, Mr Prabowo described the crisis as one of his administration’s highest priorities and pledged to strengthen preventive measures.
“If there are any needs or requirements, tell us what you need. This is one of our highest priorities. We must address this immediately, and we must prevent it from happening again. Going forward, our campaign and strategy must be extensive, comprehensive and far-reaching, with a strong focus on prevention,” he said.
He has replaced the head of the agency responsible for firefighting and disaster relief, put in place directives against slash-and-burn practices on peatland, and prioritised fire prevention as a long-term solution.
As Mr Prabowo enters his third year in office, the challenge will be to translate his ambitious promises into tangible results while balancing public expectations with economic and political stability.
And with the 2029 election approaching, his ability to deliver could prove crucial to maintaining public confidence and the support of his political allies.