As Indonesia grapples with a slowing economy, millions of citizens are facing increasing desperation. The International Monetary Fund (IMF) has warned that Indonesia’s unemployment rate is projected to rise this year, ranking second in Asia, only behind China. Despite an official annual growth rate of approximately 5 percent, the impact of economic policies is being felt by many Indonesians, including Nina Megayanti, a former marketing professional who lost her job in a market downturn.
Megayanti, who had a stable life in Jakarta, found herself unemployed for over a year, depleting her savings and losing her housing deposit. “I had a comfortable life, but everything changed,” she said. Her experience reflects a broader trend, as government data indicates that less than a fifth of the population now qualifies as middle class, contributing to a decline in consumer spending.
Government Responses and Economic Outlook
In response to the economic challenges, President Prabowo Subianto, who took office in October 2023, has introduced several initiatives, including a nationwide free school lunch program and a new sovereign wealth fund. To finance these projects, he has redirected billions of dollars from government funds, enforced budget cuts, and imposed austerity measures across various ministries, including public works and education.
Critics argue that Prabowo’s approach may be misguided. Awalil Rizky, an economist at the Bright Institute, stated, “The government is in denial about the economy,” highlighting that employment figures reflect a troubling reality. The IMF anticipates Indonesia’s economic growth rate will further decline to 4.9 percent in 2024, prompting the government to lower its growth estimate for 2025 from 5.2 percent to about 5 percent.
Despite these forecasts, the government launched a $1.5 billion stimulus package last month, which includes discounts on transportation and wage assistance for millions of workers. Prabowo aims to boost economic growth to 8 percent. He has portrayed the school lunch program as a vital investment in the nation’s future, designed to alleviate poverty. However, the initiative has faced scrutiny due to reports of food poisoning incidents and concerns over accountability.
Challenges in the Job Market and Public Sentiment
The job market remains bleak for many, with individuals like Dimas Fatwa Ramadhan resorting to gig economy jobs to sustain their families. Ramadhan, who drives for ride-hailing apps, noted that fierce competition forces him to work long hours for minimal pay. “I have to be on the road for at least 12 hours to earn about $14,” he explained. His situation illustrates the struggles many face in an economy where traditional job opportunities are dwindling.
Public dissatisfaction has become evident, with widespread protests occurring in February 2024 against the government’s austerity measures. The campaign, dubbed “Indonesia Gelap” or “Dark Indonesia,” highlighted frustrations over the costly free lunch program and called for an independent review of its implementation. Additionally, the hashtag #KaburAjaDulu, meaning “Just Flee,” has gained traction among young Indonesians expressing a desire to seek opportunities abroad.
Concerns about military influence in government have also emerged, particularly given Prabowo’s background as a former general. Legislation passed recently has allocated more civilian positions to military officers, raising alarms about potential threats to Indonesia’s democratic values. Critics like Bhima Yudhistira, director of the Centre of Economic and Law Studies, argue that the government must address fundamental issues, such as corruption and legal uncertainties, instead of focusing on high-profile programs.
While Indonesia, the fourth-largest country by population, possesses potential demographic advantages, many citizens are losing hope in the government’s ability to provide for them. Megayanti’s sentiment resonates with many: “To expect something from the government? I have lost hope.” As the nation navigates mounting economic challenges, the path forward remains uncertain for millions of Indonesians.
