Analysing Prabowo's Economic-Political Direction: Capitalism or Socialism?

JAKARTA, KOMPAS.com - President Prabowo Subianto has previously stated that he would take the best elements from socialism and capitalism. Experts in political economy are now observing its development.

‘I have listened to the President’s speeches directly, and my conclusion is that the state’s role will be significant,’ Professor Didik J Rachbini told Kompas.com on Tuesday (26 May 2026).

The founder of the Institute for Development of Economics and Finance (INDEF) noted the strengthening role of the state in the economy based on Article 33 of the 1945 Constitution.

‘The President will fulfil the economic mandate of Article 33, which was influenced by European socialism,’ Didik said.

‘Some refer to it as state capitalism, where the state plays a greater role,’ he added.

Regardless of Didik’s explanation, the concept of state capitalism emerged in Europe and the Soviet Union, either as a critique of existing conditions or as a declared national development concept.

‘Pancasila economy should more accurately be termed the basic Pancasila economy. The market and Pancasila values must align,’ Didik explained.

The rector of Paramadina University stated that Pancasila economy is based on divine and humanitarian principles, decentralised (central and regional) to prevent inequality, people-oriented, and fair economic democracy.

The article also noted that Article 33 underpins the one-stop export policy through the state-owned enterprise PT Danantara Sumber Daya Indonesia (DSI).

‘This is an effort to realise Article 33 of the 1945 Constitution, as mandated by the constitution and the nation’s founders,’ Didik said.

‘Maximising tax revenue from natural resources must continue, especially given the constitutional mandate. However, if all efforts focus solely on this sector, tax revenue will remain small and fail to maximise national tax collection,’ he added.

In Prabowo’s KEM-PPKF speech, there were details of the conditions to be achieved, namely a target of 8% economic growth by 2029 and state revenue of 11.82% to 12.40% of gross domestic product (GDP).