by Rayhan Prabu Kusumo, TAF Correspondent for Indonesia
There is something genuine in President Prabowo Subianto’s eyes when he speaks of “the poor souls”—the rakyat kecil. Those who have observed him closely across decades know this is not political theater. The conviction is old, formed in remote areas during military service, deepened through years spent among Indonesia’s most marginalized. When he speaks of helping the poor, he means it with a sincerity rare in modern politics.
This matters. Most leaders speak of poverty in the abstract, viewing the poor as statistics to manage or constituencies to court. Prabowo sees faces. He has sat in homes where children go hungry, walked through villages where opportunity dies young, witnessed firsthand the quiet desperation of those whom the economy has left behind. His philosophy emerges from these encounters as a visceral, almost spiritual commitment to the welfare of those society has forgotten.
One year into his presidency, this conviction shapes every major decision. His flagship programs and the constant emphasis on protecting the vulnerable are not cynical vote-buying schemes. They emerge from the authentic concern of a man who genuinely believes that his purpose is to ease the suffering of millions.
And here lies both the nobility and the tragedy of his presidency: that such genuine concern, absent the right analytical framework, risks condemning the very people he seeks to help.
Expensive Compassion
The current approach treats poverty as a condition to manage rather than a structure to transform. The Free Nutritious Meals initiative alone began with a budget of IDR 71 trillion (USD 4.4 billion) targeting 15 million recipients in 2025, but Prabowo has already expanded it to IDR 171 trillion (USD 10.5 billion) with plans to reach 82.9 million people—nearly one-third of Indonesia’s population. Projections suggest the program’s budget could reach IDR 335 trillion (USD 20 billion) annually when fully scaled, doubling year after year. Meanwhile, the Red and White Village Cooperatives program aims to establish 80,000 cooperatives across Indonesian villages, backed by approximately IDR 83 trillion (USD 5 billion) from the state budget and estimated IDR 200 trillion (USD 12 billion) in financing through state bank loans, with each cooperative receiving IDR 3-5 billion (USD 180k-300k) in capital.
These are staggering fiscal commitments that accept Indonesia’s economic architecture as fixed, as if poverty were a natural disaster requiring ongoing relief rather than a structural condition requiring fundamental change. More fundamentally, whatever employment these programs generate—kitchen staff, delivery workers, cooperative managers, administrative roles—reproduces the service-heavy, informal economic structure that keeps millions trapped. They are temporary, low-productivity service roles in a distribution system that will require hundreds of trillions of rupiah to sustain indefinitely.
The Industrial Imperative
Now, if one truly cares about the poor, one must understand what keeps them poor. Nearly 60 percent of Indonesia’s workforce labors in the informal sector—street vendors, motorcycle taxi drivers, day laborers—because the economy doesn’t generate enough formal, productive, decent-paying jobs.
August’s riots illuminated this truth brutally. When Affan Kurniawan—a 21-year-old motorcycle taxi driver—was killed by a police vehicle during demonstrations, he became a symbol for a generation stuck in economic precarity. The fury wasn’t primarily about lawmakers’ allowances, though elite arrogance provided the spark. This was fury at the state’s persistent inability to generate structural opportunity, at an economy that offers millions of young people nothing better than weaving through traffic on a motorbike for minimal pay and no security.
Every comparable country that has lifted its population from poverty did so through industrialization that fundamentally changed what kinds of work were available. Manufacturing jobs offer something the informal sector cannot: contracts, benefits, predictable income, the foundation for economic security. Manufacturing also generates productivity spillovers that informal work never produces: higher output per worker creates tax revenue, supplier networks multiply employment effects three to five-fold, skills requirements drive human capital investment, and technological capacity accumulates across firms and sectors. This productivity base allows economies to climb value chains and fundamentally transform the economic structure that determines what’s possible for the next generation.
How does one achieve this transformation? The answer lies in Prabowo’s current position. He commands unprecedented political capital. His decisive electoral mandate, coalition discipline, and genuine popular support rooted in concern for the poor create conditions for industrial policy that most democracies cannot sustain.
South Korea’s Park Chung-hee forced chaebols to enter heavy industry through credit allocation and export discipline. China’s Communist Party coordinated massive infrastructure investment and technology acquisition across provinces. Taiwan’s KMT channeled state resources into semiconductor and electronics manufacturing through targeted subsidies and protection. Each required sustained political commitment over decades. President Prabowo has the political capital to initiate this trajectory.
However, does Indonesia possess the policy tools to match this ambition? The administration has assembled significant institutional capacity.
The current administration is obsessed with downstreaming, an agenda inherited from its predecessor. The term has become a policy buzzword across sectors. This fixation is understandable given the apparent success of nickel processing—export values surged, new smelters dotted the archipelago, and Indonesia claimed a larger share of the global supply chain. Despite its limitations, this instinct is correct. Downstreaming captures more value domestically, creates processing jobs, and forces technological learning.
Beyond sectoral policy, the establishment of Danantara represents another manifestation of Prabowo’s unprecedented political power. Previous administrations struggled for years to coordinate Indonesia’s sprawling state-owned enterprises; Prabowo consolidated and restructured them within months under a unified holding company commanding hundreds of billions of dollars. This institutional muscle should serve as the vanguard for frontier investments—novel ventures in real sectors that private capital won’t touch, the kind of high-risk, long-horizon industrial bets that drive technological capacity and innovation prowess.
Yet both downstreaming and Danantara reveal the same limitation: tremendous institutional capacity deployed without the analytical framework for systematic transformation. Downstreaming alone cannot deliver reindustrialization. Danantara, which should be Indonesia’s vehicle for industrial ambition, has instead adopted the risk-averse logic of conventional investment management. The analytical framework for systematic reindustrialization appears abandoned or, at best, severely underfocused.
What Indonesia needs is comprehensive industrial policy that channels financial resources toward productive capacity-building in manufacturing sectors, aligns human capital development—from vocational training to university research—with industrial requirements, deploys trade policy to protect infant industries while pushing technological upgrading, develops infrastructure to support manufacturing clusters, supply chain networks, and export competitiveness, as well as shapes regulatory frameworks that attract long-term manufacturing investment.
Achieving this framework begins with redirecting the institutional tools already at hand. For a start, considering the strong political commitment already demonstrated with downstreaming and Danantara, this requires broadening the downstreaming agenda beyond resource processing into systematic reindustrialization across sectors, and redirecting Danantara’s institutional muscle from conventional investment management toward frontier industrial ventures. These redirections require an intellectual framework capable of guiding systematic transformation.
The conviction exists. The political capital exists. The fiscal capacity exists. Even the policy instinct exists in fragmented forms. What’s missing is the intellectual architecture that connects these pieces into a coherent strategy for structural transformation. This comprehensive approach would actually fulfill Prabowo’s vision of helping the poor by transforming the economic structures that trap them.
Tragedy of Misdirected Care
What makes Prabowo’s presidency particularly poignant is that misdirected concern can be more damaging than indifference. A leader who doesn’t care about the poor will at least leave the economy to evolve on its own terms, allowing market forces and private enterprise to generate whatever employment emerges organically.
But a leader who cares deeply, who commands vast political capital and fiscal resources, and who lacks the analytical framework to translate concern into structural transformation? That leader will pour energy and money into programs that feel compassionate but institutionalize the very precarity they seek to alleviate. The Free Nutritious Meals program and village cooperatives will cost hundreds of trillions of rupiah over the coming years, resources that could anchor manufacturing clusters employing millions in formal, productive work.
The demographic clock makes this misdirection catastrophic. Indonesia adds more than 2 million people to its working-age population annually. Each year without structural transformation means another cohort entering an economy that cannot offer them dignity through productive work, only survival through informal hustle. The window for demographic dividend is finite. Countries that miss it—that allow their youth bulge to age into an elderly population before industrializing—face decades of stagnation. The next five years will determine whether Indonesia’s demographic structure becomes an asset or a liability.
The problem is not lack of empathy for the poor souls. Prabowo’s concern is authentic, perhaps the most genuine of any Indonesian leader in decades. The problem is that concern without a proper framework produces expensive compassion that perpetuates rather than transforms. What Indonesians trapped in precarity need is not better management of their poverty but transformation of the economic structures that produce it. They need fundamental changes in how the economy generates work and distributes opportunity. They need systematic reindustrialization that creates the formal, productive jobs informal work can never provide.
Future generations will ask not whether their leaders cared but whether that care was wise enough to build the structures that would make caring unnecessary. The answer to that question is being written now, in choices about what frameworks guide policy and what vision animates the state. The poor souls Prabowo seeks to help deserve better than perpetual sympathy. They deserve an economy that doesn’t require it.
Edited by Phan Quang Anh Bui, Frontier Analysis Editor
