Two Years of Prabowo: Assessing Progress, Not Just Accumulating Challenges

Two Years of Prabowo: Assessing Progress, Not Just Accumulating Challenges

The first two years of an administration provide a reasonable basis for assessing its policy direction, although they may not be sufficient to measure all its structural impacts. In this context, Channel NewsAsia’s (CNA) report on President Prabowo Subianto, published on 20 October 2026, raises several important questions concerning fiscal sustainability, the quality of economic growth, and political consolidation ahead of the 2029 general election. These questions deserve serious consideration. However, a comprehensive assessment must go beyond simply compiling a list of risks. It must distinguish between problems that have been empirically established, policy consequences that are still unfolding, and concerns about the future that have yet to be fully substantiated.

The challenges facing a government do not disappear simply because its policies have well-intentioned objectives. Conversely, the existence of challenges is not sufficient grounds for dismissing the progress that has been achieved. An assessment of Prabowo’s first two years should therefore be guided by more fundamental questions: Have policy choices produced measurable changes? Have their benefits been distributed equitably? And can these outcomes be sustained without compromising economic stability or the quality of democracy?

Economic Growth Is More Than a Number, but It Is Not an Illusion

One of the issues highlighted by CNA is the sustainability of Indonesia’s economic growth. The report cites economic growth of 5.45 per cent in the first half of 2026 and draws attention to the substantial contribution of government expenditure to economic expansion. Concerns about excessive dependence on public spending are legitimate, particularly as the government seeks to achieve its annual growth target of 8 per cent. However, a substantial contribution from government spending does not, in itself, indicate that economic growth is unhealthy. Under certain conditions, public expenditure can sustain domestic demand, strengthen essential public services, and create markets for business activity.

Data from Statistics Indonesia (BPS) provide additional context. Indonesia’s economy grew by 5.11 per cent in 2025, up from 5.03 per cent in 2024. Meanwhile, the Ministry of Investment and Downstream Industry, through the Investment Coordinating Board (BKPM), recorded realised investment of IDR 1,931.2 trillion in 2025, an increase of 12.7 per cent from the previous year. This investment was also associated with the creation of 2.71 million jobs (BPS, 2026; BKPM, 2026). These figures do not establish that all economic sectors have developed evenly. Nevertheless, they demonstrate that Indonesia’s economic performance cannot be reduced to a narrative of dependence on government spending alone.

The real challenge lies in transitioning from demand-driven growth to growth underpinned by productivity. The government must ensure that public expenditure creates opportunities for private investment, improves economic infrastructure, strengthens workforce skills, and increases industrial value added. If government spending merely boosts consumption without generating productivity gains, economic growth will eventually encounter structural limits. Conversely, when public expenditure enhances productive capacity and human capital, it can serve as a bridge towards more sustainable growth.

The 8 per cent growth target should therefore be treated as a transformation objective, rather than a figure that must be achieved through unlimited spending expansion. Success should also be measured not merely by increases in gross domestic product, but by improvements in labour productivity, job quality, productive investment, household real incomes, and the competitiveness of domestic industries.

Fiscal Discipline and the Willingness to Invest in People

Criticism of the government’s social welfare programmes, particularly the Free Nutritious Meals (Makan Bergizi Gratis, or MBG) programme and the proposed abolition of tuition fees at public universities, touches on a fundamental issue in public policy: how the state determines its priorities when resources are limited. CNA emphasises the substantial budgetary requirements of these programmes and the risks that may arise if the government expands its spending commitments without strengthening its revenue base.

These concerns should not be dismissed. Indonesia’s Ministry of Finance recorded a 2025 state budget deficit of IDR 695.1 trillion, equivalent to 2.92 per cent of GDP, while the primary balance registered a deficit of IDR 180.7 trillion (Ministry of Finance, 2026). Although the government remained within the applicable fiscal deficit limit, this situation demands caution. Fiscal space is not an unlimited resource. Every additional spending commitment must be accompanied by a clear assessment of its financing sources, expected benefits, and implications for other development programmes.

However, fiscal discipline is not synonymous with automatically cutting social expenditure. The state must also consider the economic costs of malnutrition, unequal access to education, and inadequate human capital. Well-designed social spending can constitute a productive investment, particularly when its benefits improve learning outcomes, health, labour force participation, and future productivity.

This is where the government must demonstrate the distinction between programmes that are politically popular and those that are genuinely effective. The MBG programme, for example, should not be evaluated solely on the number of beneficiaries or meals distributed. The government must demonstrate the quality of nutritional provision, food safety, targeting accuracy, effects on nutritional status, and economic benefits for farmers, livestock producers, fishers, and small businesses. Even a programme with extensive coverage can encounter serious problems if oversight is weak or its benefits fail to justify its costs.

The same principle applies to higher education. The proposed abolition of tuition fees must be assessed in terms of students’ needs, fiscal capacity, equitable access, and universities’ ability to maintain educational quality. The policy need not be framed as an unavoidable trade-off against the MBG programme, as though the state can support only one of the two. A more productive question is how the government can establish phased priorities, identify those most in need, and allocate funding according to evidence of effectiveness.

The success of social policy, therefore, should not be measured by the volume of budget expenditure absorbed or the scale of programmes announced. It should be measured by the net benefits received by society relative to fiscal costs and opportunity costs. Such an approach would allow the government to maintain its ambition to develop human capital without neglecting fiscal prudence.

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