Reflections on Two Years of Indonesia's Economic Transformation
Two years of President Prabowo Subianto’s leadership, as outlined in the Plenary Cabinet Session on 20 July 2026, marks a fundamental turning point in the Republic’s governance. Amidst global geopolitical uncertainty and the looming shadow of unchecked free-market dominance, the government has boldly taken a quiet yet constitutional path: abandoning the grip of neoliberal capitalism and returning purely to the spirit of Articles 33 and 34 of the 1945 Constitution.
For decades, the nation was trapped in the illusion of false growth. Abundant natural wealth flowed overseas through price manipulation practices, such as under-invoicing, and structured smuggling. Today, the government is exposing this bitter reality not merely through rhetoric, but through radical policy instruments that demand high-level political courage.
The most acute problem in the national economy has been the leakage of foreign exchange due to unfair pricing of strategic commodities. A casual example revealed by the government is staggering: crude palm oil (CPO) was recorded at a low price domestically but sold at a soaring price in the European market. This massive price gap represents the people’s rights being systematically robbed.
The solution presented is not a moral appeal, but firm state intervention. Through the establishment of PT Danantara Sumber Daya Indonesia (PT DSI) as the single gateway for strategic commodity exports, the government has successfully severed this chain of fraud. Within just a matter of weeks, billions of dollars in foreign exchange were secured for domestic interests. The decisive revocation of licences for non-compliant businesses proves that the state must not lose to the oligarchy. Interestingly, this radical reform has received positive appreciation from global rating agencies such as S&P, which assessed the move as successfully and substantially improving the nation’s economic fundamentals.
In the state asset management sector, the birth of the Danantara (Daya Anagata Nusantara) sovereign wealth fund represents a major leap forward. Consolidating state assets worth more than USD 1,000 billion and streamlining hundreds of state-owned enterprises along with their subsidiaries is a form of efficiency long yearned for by the public. For years, the state bore the burden of inefficient bureaucratic and operational costs of state-owned corporations. With this consolidation, tens of trillions of rupiah in potential budgetary waste have been saved and redirected to productive programmes that directly impact the lives of the people.