Activists Criticize Prabowo's Claim Villagers Are Unaffected by Weak Rupiah
Activists Criticize Prabowo’s Claim Villagers Are Unaffected by Weak Rupiah
Jakarta. Activists and economists on Sunday criticized remarks by President Prabowo Subianto suggesting that villagers would not be affected by the rupiah’s sharp depreciation against the US dollar.
Yusuf Rendy Manilet, a researcher at Center of Reform on Economics, said the president’s comments did not reflect the realities of Indonesia’s economy, which remains heavily dependent on imported raw materials and commodities.
Although most daily transactions in rural communities are conducted in rupiah, Yusuf said many essential supply chains still rely on imports, including fertilizer for farmers, wheat for instant noodles, pharmaceutical ingredients, fuel, and livestock feed.
“When the rupiah weakens, costs rise and are transmitted into consumer prices through classic imported inflation,” Yusuf said.
“In fact, villagers are among the most vulnerable because they have the weakest bargaining power. The issue is not whether they use dollars or not, but that Indonesia’s economic structure still depends heavily on imports,” he added.
During a visit to Nganjuk Regency in East Java a day earlier, Prabowo said the rupiah’s depreciation would not directly affect people living in villages.
“No matter how many thousands the dollar reaches, people in villages don’t use dollars. The ones worried are those who frequently travel abroad,” Prabowo said.
Yusuf warned that such statements could undermine the government’s credibility in the eyes of investors, who closely monitor how authorities respond to economic realities.
Comments that fail to acknowledge actual economic conditions could contribute to rising investment risk premiums at a time when yields on Indonesian government bonds, known locally as Surat Berharga Negara (SBN), have already been climbing, he said.
For that reason, Yusuf argued that the government needs to improve its public communication strategy.
Rather than appearing to downplay the issue, authorities should focus on explaining concrete policy measures already being implemented, he said.
According to Yusuf, Bank Indonesia has actively intervened in financial markets, while the government continues to maintain its commitment to keeping the fiscal deficit below 3% of gross domestic product. Indonesia’s foreign exchange reserves also remain adequate to absorb short-term volatility, he noted.
“These are the things that should be amplified, instead of creating a narrative that downplays the problem,” Yusuf said.
Separately, Timboel Siregar, secretary-general of the All-Indonesia Workers Organization, or OPSI, said Prabowo’s remarks created the impression that the government was not paying sufficient attention to workers’ welfare.
If the government and relevant authorities fail to respond quickly to the rupiah’s weakening, the country could face a wave of mass layoffs, he warned.
Timboel said currency depreciation directly affects workers because rising import costs eventually push up prices for consumer goods, as many industries still rely heavily on imported materials.
“People’s purchasing power declines as prices rise, causing workers’ real wages and welfare to deteriorate. Companies unable to manage cash-flow pressures caused by the weaker rupiah may reduce their workforce, leading to larger waves of layoffs,” Timboel said.
He added that labor union activists have so far remained relatively quiet and have not openly criticized the current situation.
According to Bloomberg data, the rupiah reached Rp 17,596 per US dollar on Friday, far weaker than the Rp 16,500 exchange-rate assumption used in Indonesia’s 2026 state budget.
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