The state is taking over more of the economy than it can actually run

Prabowo Subianto is putting the state at the centre of the economy and calls it ekonomi kerakyatan, the "people's economy". Dyah Pritadrajati of the Lowy Institute in Sydney lines up his biggest programs in The Interpreter and finds the same gap in each: very big targets, and delivery well below them.

Start with Merauke in south Papua, where the plan pairs a million hectares of new rice fields with sugarcane and bioethanol. Indigenous communities there say customary land was taken without their consent, and the wider project could clear close to three million hectares of forest and swamp. Indonesia lost 433,751 hectares of forest in 2025, 66 per cent more than the year before. Pritadrajati writes that the food-security case rests on harvests nobody can be sure of and on a strikingly low value placed on the cleared land.

Then the free meals program, MBG. More than 20,000 kitchens were running nationwide by late July, but only 275 were open across Papua's six provinces, against a target of 2,500 by Independence Day. Its 2026 budget was cut to Rp229 trillion, about USD12.8 billion, and even after that cut it takes 45 per cent of all social protection spending. At least 33,000 children had been made ill by MBG food by April. About one in five children under five is stunted, meaning too short for their age after long periods of poor nutrition, yet most meals go to school-age children, years after the first 1,000 days of life when food matters most.

The village cooperatives make the pattern plainest. Around 80,000 were legally set up; 1,061 were actually operating by June. Some buildings went up in rice fields and beside cemeteries, which is what you get when construction comes before anyone asks who will use them. Indonesia Corruption Watch counted at least 102 MBG partner foundations tied to political or state power. "A centrally prescribed cooperative is not necessarily a people's cooperative," Pritadrajati writes.

Why it matters

If your child eats an MBG meal, the money behind it takes almost half of all social spending, so what it buys shapes every other benefit you might need. Watch whether the program shifts money towards pregnant women and babies, because that is where it would actually cut stunting. The other test is whether the cooperatives that exist only on paper are ever closed and written off, because until they are, the cost stays on the books and lands on taxpayers.