Prabowo’s Flagship Programs and Indonesia’s Development Path

President Prabowo Subianto’s administration is charting a new course for Indonesia’s economic policy, prioritizing a series of flagship programs focused on social welfare, state-owned enterprise (SOE) restructuring, and cooperative development. This approach represents a shift from previous administrations, which largely relied on long-term economic plans developed by Indonesia’s technocratic institutions.

A Departure from Traditional Planning

Indonesia’s economic planning traditionally centers around frameworks like the National Long-Term Development Plan (RPJPN) 2025–2045 and the Medium-Term Plan (RPJMN) 2025-2029, which emphasize inclusion, competitiveness, and green growth under the “Golden Indonesia 2045” vision. However, Prabowo’s agenda is currently driven by three key initiatives.

Prabowo’s Three Flagship Programs

The three flagship programs – the Free Nutritious Meals (Makan Bergizi Gratis, MBG) scheme, Danantara (a new state investment agency), and the “Red and White” cooperative initiative – are considered national missions. Each program aims to address specific challenges and contribute to Indonesia’s long-term development goals.

Free Nutritious Meals (MBG)

The MBG scheme aims to provide free meals to tens of millions of schoolchildren and pregnant women. The program is budgeted at IDR71 trillion (USD4.1 billion) in 2025, with planned expansion to IDR335 trillion (USD20 billion) in 2026. It is framed as an investment in human capital, intended to combat stunting, improve learning outcomes, and increase school enrollment.

Danantara: Restructuring State-Owned Enterprises

Danantara, established in February 2025, is a new state investment agency tasked with restructuring Indonesia’s state-owned enterprises (SOEs). It begins with initial capital of IDR1000 trillion (USD59.6 billion) and manages consolidated assets estimated at IDR16,500 trillion (USD1 trillion). The goal is to professionalize SOEs and attract capital, building a trillion-dollar asset base by 2029 and channeling funds into strategic industries.

“Red and White” Cooperatives

The “Red and White” cooperative initiative, led by the Ministry of Cooperatives, aims to establish 80,000 village-level cooperatives. These cooperatives will focus on supplying basic goods, providing financial services, and strengthening economic resilience at the grassroots level. The initiative is allocated IDR83 trillion (USD4.9 billion) for the fiscal year 2026.

Addressing Structural Limitations

The shift towards these flagship programs can be seen as a response to existing structural limitations in Indonesia’s economic planning and implementation. Despite recent efforts, the link between technocratic planning and political budgeting remains fragmented. The draft budget is often subject to political negotiation in Parliament, potentially altering original priorities. Ambitious targets are frequently missed due to capacity constraints and uneven implementation.

These flagship programs function as “fast-track” mechanisms to secure funding and momentum, offering a political solution to institutional inertia and reinforcing executive authority over the planning-budgeting process.

Indonesia in a Regional Context

Compared to other Asian nations, Indonesia’s early policy bets on nutrition, state investment management, and mass cooperatives differ from approaches prioritizing knowledge, technology, or green industrial policy. China’s Five-Year Plans emphasize innovation, advanced manufacturing, and green development through state-led investment. Vietnam and Malaysia are focusing on attracting foreign direct investment to drive growth in value chains, particularly in digital transformation and semiconductor industries.

The Path Forward

The success of Prabowo’s flagship programs will depend on their alignment with Indonesia’s long-term goals for human capital, industrial upgrading, and competitiveness, as well as their integration into the existing decentralized planning system. While these programs have potential benefits – improved nutrition, SOE rationalization, and broader market participation – Indonesia must also prioritize industrial, technological, and green transition agendas.

Transparent medium-term costing, clear trade-offs, and stronger governance are crucial for effective implementation. The mid-term reviews of the RPJMN, due in 2027, will provide an opportunity for empirical evaluation and evidence-based adjustments. Indonesia’s success will depend on translating formal development plans into impactful programs that advance productivity, competitiveness, inclusion, and decarbonization.