Jakarta, CNBC Indonesia - President Prabowo Subianto has asked\nmembers of the Red and White Cabinet to review austerity policies. From\nfuel consumption to work from home (WFH), as a precaution if the\nconflict in the Middle East drags on. This request was made during the\nFull Cabinet Meeting at the State Palace on Friday (13\/3\/2026).<\/p>\n
This step repeats history that was once carried out by the second\nPresident of Indonesia, Soeharto, in 1986. At that time, the national\neconomy faced pressure due to the fall in world oil prices. That\npressure was reflected in the 1986\/1987 RAPBN which dropped by around\n7%. Indonesia, which previously enjoyed a surge in revenue from oil\nexports, was suddenly hit because global economic growth slowed and\ncommodity prices plummeted.<\/p>\n
\u201cGrowth slowed, trade and investment fell sharply, debt increased and\nthe government faced major fiscal challenges due to falling oil\nrevenues,\u201d stated historians Jan Luiten van Zanden and Daan Marks in The\nIndonesian Economy 1800-2010 (2012).<\/p>\n
In facing that situation, Soeharto asked all levels of society\u2014civil\nofficials, military, and civilians\u2014to live frugally and simply.<\/p>\n
\u201cI have issued several provisions that apply to high-ranking\nofficials, both civil and military. However, those simple living\npatterns are not only aimed at government officials. The wider\ncommunity, especially the affluent, also have a moral and ethical\nobligation to internalise and embody that simple lifestyle,\u201d Soeharto\nstated, quoted from Merdeka (10 February 1986).<\/p>\n
According to Soeharto, living frugally does not mean living in\npoverty or being made destitute, but living simply in a reasonable\nmanner. A luxurious lifestyle amid economic difficulties has the\npotential to trigger social jealousy and hinder economic recovery.<\/p>\n
In addition to urging the public to live frugally, Soeharto also\nimplemented efficiencies within the government. In a report from Suara\nKarya (10 January 1986), one example was the simplification of\npreviously convoluted investment procedures, as well as tightening\npriorities to close leaks and waste.<\/p>\n
However, calls for frugal living were not always on target.\nPhilosopher Franz Magnis-Suseno told Sinar Harapan (18 January 1986)\nthat the president\u2019s appeal was not heeded by officials and the wealthy\nwho enjoyed luxurious lifestyles. Seminars and events in luxury hotels\nwere still rampant, contrary to the government\u2019s message.<\/p>\n
In the end, the deregulation and economic reforms carried out by\nSoeharto proved effective in withstanding the economic shock from the\nfall in oil prices. Indonesia\u2019s economic growth began to stabilise\ntowards the end of the 1980s, averaging 5.5% in the 1986-1988 period,\nwhile dependence on oil and gas revenues gradually decreased as exports\nand investment increased.<\/p>\n
Now, President Prabowo is pushing for similar steps, given that the\nMiddle East conflict has the potential to affect energy prices and the\nglobal economic situation.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/amid-economic-difficulties-indonesian-president-urges-citizens-to-live-frugally-1774363876", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }