Indonesia’s new president is counting on major projects to increase growth Economy News

Indonesian President Joko Widodo left office on Sunday, maintaining great popularity thanks to the strong economic growth he achieved during his term, but his successor, Prabowo Subianto, comes carrying greater ambitions, including a plan to implement huge development projects.

Prabowo was inaugurated as the eighth president of the largest Muslim-majority country in the world, and he is a former defense minister.

While the country records a regular annual growth rate of about 5%, this former general pledged to benefit from his predecessor’s policies to reach an 8% growth rate, relying on the huge human resources that characterize the country.

It is noteworthy that Prabowo had said in his victory speech last March, “Through prosperity, we can achieve justice for the entire Indonesian people. We must unite to eradicate poverty, hunger, and the suffering of our people.”

Major projects

To achieve the desired prosperity and progress, Prabowo is betting on major national projects and the enormous natural resources that the archipelago abounds to reduce the poverty rate, which exceeds 9% of the total number of citizens.

The new president pledged to continue an economic program drawn up by Jokowi, but also pointed to working to alleviate poverty in a country with a population of more than 280 million people.

Prabowo’s largest pledge – which he made during his election campaign – was a $28 billion plan to provide free meals to children and pregnant women throughout the country.

Prabowo said that this plan, which will be launched next January, will contribute to promoting stunted growth that affects more than a fifth of children up to the age of five, and will also provide millions of job opportunities.

Jokowi focused on huge infrastructure projects, including roads, bridges, and airports, with the aim of better connecting the archipelago.

But experts say that Prabowo will deviate from this in an attempt to fulfill an election promise to transform Indonesia, a member of the G20, into an “advanced and developed” economy.

“He will not blindly follow Jokowi’s lead, but he will not give up or completely neglect everything, so he will be more or less in the middle,” said Center for Strategic and International Studies economist Yossi Rizal D’Amuri.

“He seems to be adopting a slightly different approach than Jokowi,” Yusei added. “The priority is no longer infrastructure development, but human capital development.”

Observers say the new president’s agenda will also focus on agriculture, with a program aimed at achieving self-sufficiency.

Capital

Meanwhile, Prabowo inherits a project to move the capital from congested Jakarta to Nusantara, a green city being built in eastern Borneo.

But this capital city will not be ready before 2045, as the rapid construction process is depleting state coffers.

Although Prabowo pledged to continue the project, there is speculation that he intends to suspend it and keep Jakarta as the capital of the archipelago.

Prabowo supports the National Resources Protection Project also adopted by Jokowi’s government, especially the nickel sector, where Jakarta has imposed export restrictions in an attempt to become a major player in the electric vehicle industry’s supply chains.

Indonesia is one of the most polluting countries in the world due to its dependence on fossil fuels, and Prabowo has supported gradually reducing this, but his family has ties to the coal production sector, and processing huge amounts of nickel requires coal-fired power plants.

Chinese investments in Southeast Asia were the largest in Indonesia last year, and Prabowo met President Xi Jinping in his first foreign meeting after winning the elections.

This indicates the importance he places on continuing to attract investments from Beijing that have proven pivotal to Indonesia’s economic growth.

In addition to his early foreign visit, Prabowo’s choices for new ministers and the first budget he presents after his inauguration will also give a better indication of his economic plans.

Finance Minister Sri Mulyani said this week that she had been asked to keep her portfolio in the next government, which experts say gives markets a signal that there will be continuity.

“With Sri joining his government, this shows that Prabowo will be very cautious regarding financial issues,” said Bhima Yudhisthira Adinigara, an economist at the Center for Economic and Legal Studies.

“That’s why Jokowi’s supporters are now being hired again, and it shows that Prabowo will be disciplined,” he added.