The solution that stares Indonesia in the face

Mr Prabowo had inherited a stable enough economy from Mr Joko Widodo.

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PRABOWO POLICIES Forex reserves had steadily mounted for five years, and the budget deficit was less than 3 per cent.

Thanks to an emphasis on infrastructural development, power production surged during Mr Widodo's decade-long rule, and today power availability is well matched with demand. According to CEIC, a global database, the country produced an all-time high of 343,892 GWh in December 2024—a 50 per cent jump over 10 years of Mr Widodo's rule, and a huge leap from the 51,478 GWh in December 1994.

More toll roads had been built in the past decade than the six decades prior.

Foreign direct investment was strong and economic growth was ticking over at a respectable 5 per cent. FDI commitments totalled some US$55 billion (S$72 billion) in 2024, led by Singapore, which has poured in more than US$20 billion in the past decade, according to Indonesian government statistics.

A plan to get foreign-owned extracting industries to base downstream development in-country has largely been successful, according to AMRO, the Asean Plus 3 Macroeconomic Research Office based in Singapore. Downstream industries—chiefly mining and agriculture—recorded 407.8 trillion rupiah in investments for the entirety of 2024, according to official Indonesian data. That is equivalent to nearly a quarter of the total investments that Indonesia received over the year.

But the rash of populist policies unleashed by Mr Prabowo, and worries that the seasoned Finance Minister Sri Mulyani Indrawati might leave or be replaced by a Prabowo relative, have dampened investor sentiment since the year began. Investors looked particularly poorly upon a massive US$28 billion free-meal scheme for school children and pregnant women that was seen as diverting funds from infrastructure.