Prabowo Subianto, Indonesia’s defense minister and likely its next president, is setting an ambitious growth target for Southeast Asia’s largest economy. During a Tuesday speech at an investment forum in Jakarta, Prabowo said he wanted Indonesia’s economy to grow by 8% in the next five years.
While election authorities have yet to release the official results, quick polls following the Feb. 14 election show Prabowo winning by a large margin. Current president Joko Widodo has already congratulated Prabowo. (Official results will likely be released March 20, and the victor will be inaugurated on Oct. 20.)
Prabowo’s 8% target is more ambitious than what his predecessor, Jokowi, promised. Jokowi set a 7% growth target when he took office in 2014. Indonesia grew by 5.3% and 5.05% in 2022 and 2023, respectively. The last time the Indonesian economy expanded by 7% was in 1996, the year before the Asian Financial Crisis.
Jokowi has tried to leverage Indonesia’s vast nickel reserves to position the country as an EV manufacturing hub. Pro-business policies and a push to upgrade infrastructure have also made Indonesia an attractive investment destination.
Analysts expect Prabowo to continue Jokowi’s policies, such as developing the downstream nickel industry and building the country’s new capital Nusantara on the island of Borneo.
Tuesday’s speech was Prabowo’s first since declaring victory in the country’s elections in February.
Prabowo said he wanted to give the private sector a larger role in Southeast Asia’s largest economy, “rationalizing and privatizing” the country’s state-owned enterprises. State companies currently play a dominant role in sectors like mining, telecommunications, and construction.
“The state can regulate, the state can [provide] oversight, the state must also have strategic decision-making,” he said, according to Reuters.
Prabowo also promised to maintain fiscal discipline and increase tax collection, perhaps to alleviate concerns over the fiscal effects of his populist campaign promises. During the campaign, he proposed a free school lunch program, estimated to cost around 400 trillion rupiah ($25.4 billion) or about 2% of the country’s current GDP.
Prabowo has a controversial past, accused of having links to atrocities in East Timor and the kidnapping of 20 democracy activists in 1998 during his time as a special forces commander. He has denied wrongdoing.
On Tuesday, Prabowo promised to “work democratically,” but said he wouldn’t “shy from taking decisive action,” according to the Financial Times.
“Democracy is very, very tiring. Democracy is very, very messy. Democracy is very, very costly,” he said. “There is a lot of room for improvement.”
