Prabowo touts progress on key social programmes to drive growth

Indonesian President Prabowo Subianto used his first State of the Nation address to take a victory lap on the social programmes he believes will drive growth in South-east Asia’s biggest economy. 

“Our goal of independence is to be free from poverty, free from hunger, free from suffering,” Mr Prabowo told lawmakers on Aug 15. “Our country must be able to stand on its own feet. Our country must be sovereign in economy and able to meet our own food needs.”

Mr Prabowo rose to power in 2024 in his third presidential bid, defeating rivals in a landslide win on promises to carry forward the policies of his predecessor, Mr Joko Widodo. But while Mr Widodo’s decade in office was defined by massive infrastructure projects, Mr Prabowo has made welfare and social programmes the centrepiece of his growth strategy.

The achievements he touted include faster-than-expected economic growth and 20 million people receiving food under his signature free meals programme, as well as cracking down on corruption and cutting unnecessary spending. 

The stock-taking comes at an opportune moment for the president of one of the world’s most populous nations 10 months into his tenure. 

Indonesia’s economy surprised analysts last week with its fastest quarterly growth in two years, while the stock market this week hit a new high, part of a broader rally across global markets that’s been driven in Indonesia largely by domestic investors. 

A weaker dollar, meanwhile, has helped the rupiah strengthen about 5 per cent since hitting an all-time low against the greenback in April.

Mr Prabowo is scheduled to unveil a draft budget for 2026 when he speaks to lawmakers again in the afternoon. 

Investors will be watching closely to see whether he moves to raise deficit spending, which of his programs will take priority and what he plans for defence spending as he seeks to modernise Southeast Asia’s largest military. BLOOMBERG