Prabowo Admits Indonesia is Facing Deindustrialisation, Pledges to Take This Action!

Jakarta, CNBC Indonesia - President Prabowo Subianto has acknowledged that Indonesia is undergoing deindustrialisation. To address this, a series of policies are being implemented to revive the industry, create jobs, and save the middle class.

“When I ran for president, I no longer talked about nation-building. I talked about nation transformation. What is happening is deindustrialisation,” said Prabowo during the event President Prabowo Answers with journalists and experts, which aired on Thursday (19/3/2026).

Prabowo was responding to a question from Chatib Basri, a member of the National Economic Council. In his research, Chatib revealed that over the past five years, protests have frequently occurred in Latin America and Southeast Asia, including Indonesia.

The cause is inseparable from the shrinking middle class. He did not deny the overall decline in unemployment rates, but when examined more closely, educated people—high school, vocational school, and university graduates—are not finding decent employment.

That group, he continued, relies on the informal sector for livelihood with low wages. This is what the former Minister of Finance believes is triggering social unrest.

What will Prabowo do?

“I want downstream processing. That’s the only way. We must not export raw materials anymore. We have to process those raw materials into high-value industrial derivative products,” he emphasised.

According to Prabowo, downstream processing will open up quality job opportunities, especially for the young generation in the industrial and technology sectors. He also highlighted Indonesia’s great potential in the automotive industry based on natural resources.

“We have bauxite. Bauxite for alumina is processed into aluminium. Aluminium becomes cars. But we don’t process bauxite. Japan doesn’t have bauxite, but they make the best cars. Right? This is what we have to do,” he said.

Furthermore, Prabowo explained the industrial development strategy through the industrial tree concept.

“We have to build hundreds of factories. That’s what we call the industrial tree. We have already mapped it out. We have a plan actually. Industrial tree for all important commodities that we have,” he clarified.

He cited coconuts as one of the major untapped potentials.

“Coconuts alone are considered a miracle crop. Virgin Coconut Oil is considered anti-cancer. But we only have one or two coconut factories. So far, we export whole coconuts,” he revealed.

In addition, Prabowo highlighted the paradox in flagship commodities like coffee and cocoa.

“We have the best coffee, the best chocolate, but we import Starbucks, Nestle, Nescafe. We have the best chocolate, but we import KitKat, we eat Cadbury. Right? This is what we have to do,” he continued.

He stressed that industrialisation based on downstream processing is the only way to create quality jobs and strengthen the national economy.

“So this is actually the answer: industrialisation,” Prabowo concluded.