Indonesia’s Prabowo vows to boost economic growth to 8% within five years

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Indonesia’s presumed next president Prabowo Subianto has said economic growth can accelerate to 8 per cent within five years and vowed to maintain fiscal discipline when he takes the helm of south-east Asia’s largest economy.

Speaking at an investment forum in Jakarta on Tuesday, Prabowo also promised a smooth transition from the current government of Joko Widodo and said his administration would build on the economic foundations laid by his predecessor.

The former military general and current defence minister won nearly 60 per cent of the vote in February’s election, according to unofficial results from sample ballots. Official results are due this month and, if confirmed, Prabowo will be inaugurated as president in October.

Helped by business-friendly policies and an infrastructure push under Widodo, Indonesia has become one of the world’s most attractive emerging markets and investment destinations. Widodo, president since 2014, has positioned Indonesia as a key part of the global supply chain for electric vehicles, leveraging the country’s vast nickel reserves.

In his first public comments outlining his government’s priorities since the decisive election win, Prabowo said his government would focus on inclusive growth and investor-friendly policies and slash economic inefficiencies.

“I’m personally convinced we can boost our growth. My own estimate is that within the next 4 to 5 years, we can see 8 per cent growth, maybe more,” he said.

“We want growth, but we want to overcome poverty, we want to create jobs, we want to get rid of hunger. And the way forward is very clear. We will push efficiency, we will push rational decision making,” he said.

Prabowo’s growth forecast is ambitious compared with current levels. The economy has grown at a steady 5 per cent annually over the past decade, except during the Covid-19 pandemic. It is expected to grow more than 5.1 per cent this year, the central bank said on Tuesday at the forum.

Prabowo also vowed to maintain fiscal strength and increase tax collection, addressing concerns from economists and investors that he could introduce populist policies that will test Indonesia’s fiscal resilience.

One of his main campaign promises was to provide free meals and milk to schoolchildren across the country at the cost of Rp460tn ($30bn), about 2 per cent of Indonesia’s gross domestic product.

Prabowo also said he would pursue privatisation of Indonesia’s state-owned enterprises, which have vast interests in energy, finance, telecommunications, agriculture and other industries.

Political observers and rights activists have also raised concerns about democracy in Indonesia under a Prabowo presidency, citing his controversial military past.

Prabowo spent decades in the military until he was ousted in 1998 over his alleged involvement in the kidnappings of pro-democracy activists during the regime of late autocrat Suharto.

He has also been accused of being involved in killings in East Timor as a young officer in the 1980s. He has always denied the allegations.

Prabowo on Tuesday said his government would act democratically and remarked that Indonesia’s “messy” democracy still needed some work.

“We will work democratically, but we will not be shy from taking decisive actions,” Prabowo said. “Democracy is very, very tiring. Democracy is very very messy, democracy is very, very costly. And we are still not satisfied with our democracy. There is a lot of room for improvement.”