When Prabowo Subianto campaigned to become Indonesia's new president, he promised dynamic economic growth and major social change.
However, his first year in office has not lived up to this populist platform. Frustrated youth, anxious about jobs, took to the streets in late August protesting against the rising cost of living, corruption, and inequality. The government was compelled to roll back certain perks for politicians that had incited public outrage, following earlier demonstrations against budget cuts affecting healthcare and education spending.
These events coincided with an expensive free school meals initiative costing $28bn (£20.8bn), a cornerstone of Prabowo's agenda aimed at tackling child malnutrition and enhancing educational outcomes. Despite presenting it as an investment in the nation's future, recent reports depicted weak, dehydrated children suffering food poisoning after consuming the free lunches.
More than 9,000 children have reportedly fallen ill since the program's launch in January, raising questions about its efficacy and the pressure it places on public resources, which is worsening Indonesia's financial deficit.
Analysts warn that these challenges highlight more extensive issues in public spending and oversight, shedding light on deeper strains within Indonesia's $1.4tn economy.
The protests in August, which resulted in ten fatalities, reflected widespread anger directed towards Prabowo's government, with many accusing it of emphasizing prestige-driven projects over addressing essential economic support.
Despite the backdrop of steady 5% annual growth, Indonesia is feeling the effects of slowing global demand and rising living costs, with competition from neighboring countries like Vietnam and Malaysia complicating the economic landscape, as these countries attract foreign investment seeking to diversify away from China.
As President Prabowo sets an ambitious growth target of 8% by 2029, experts stress that achieving such goals will demand careful management of public finances and foreign investment. While a new sovereign wealth fund targeting impactful projects may spur growth, uncertainty remains regarding the government's ability to ensure successful execution of ambitious initiatives.