INDONESIA HEADED INTO CLUB OF DOOM AGAIN?

 Indonesia should never make a military man their president. When he says 'Fire!" they will not know if he means the open burning of forest land in Sumatra or if he means 'Shoot!'.

    
Stock Market Plunge Signals Fading Indonesian Economy
Trading halted as officials seek to regain control
Mar 19
 

• Plagued by steeply climbing state debt
• spooked by erratic economic policies pushed by President Prabowo
• Jakarta Stock Market plummeted on March 18 
• worst performance since Covid-19 pandemic

• domestic issues have eroded investor confidence
• politics and policies implemented without adequate risk mitigation
• undermining market trust and accelerating foreign capital outflows
• capital market in the “yellow light” category
• most Asian stock indices are moving positivel
• domestic issues have worsened investor sentiment

• Prabowo's expensive school lunch program (US$26b)
• more than 10% of US$226b fiscal budget 
• US$10b seawall to protect Jakarta from sinking
• Jokowi's stalled Kalimantan capital an expensive issue

• Indonesia's six biggest GLCs face debt US$62.8b

• Deteriorating fiscal performance
• controversial Military Law (UU TNI)
• weakening consumer purchasing power 

• controversial sovereign wealth fund Danantara
• concerns about political interference 
• close ties to Prabowo
• Military Law raised concerns among investors
• risk of military taking on civilian roles
• reduce Indonesia’s economic competitiveness
• increase conflicts of interest
• open the door to corruption

• Indonesia heading toward economic recession? 

• foreign investors massive net sell-off US$1.57 billion in 2025 
• investors’ confidence in Indonesian market declining

 

My Comments :

Indonesia is still deeply rutted in the Third World. What does this mean? It means there is an insufficient private sector, independent and capable of making its own direction. The country and the economy is highly dependent on the government and government policy. If it is a theocratic insanity like Afghanistan or Iran then the country has almost no future. If it depends on a strong man system or one group calls the shots system then they have little prospects (Malaysia falls in this category). 

Then there is the dependence on the individual expertise and capability of the leader. If the Third World country gets a good leader like Lee Kuan Yew (a pure stroke of good luck for Singapore) they are fortunate. If they get the Marcoses, the Shinawatras, bla bla then its tough luck.

In just 25 years (1965 until 1990) Mr Lee Kuan Yew  not only took Singapore from the Third World to the First World but more importantly he built institutions (both governmental and private sector) which can now stand on their own and function purely on a market basis. Government and government policy provides a stable and guiding hand but it is the market that determines the future of the economy and hence the well being of the people. Also known as a fully functioning, market economy. 

This is what Indonesia does not have yet, and to an extent Malaysia as well. The well being of the people (or a large portion of them) is often directly determined by government policy and by the leader in power and the politics of the power groups. It can go from bright sunshine to dark clouds and violent thunderstorms in the blink of an eye.

The new Indonesian president is a bit of a clown already. He likes military uniforms and has got his Cabinet members to wear military fatigues and to even attend military boot camp where Cabinet ministers were taught to march around the parade ground like toy soldiers.

         KOPASSUS BUNCIT

While Jokowi had 34 Ministers in his Cabinet, Prabowo's Cabinet has a mindboggling 109 Ministers. Obviously 109 Ministers is not helping Indonesia too much.

There are even more dangerous thoughts being floated by Prabowo. He has expressed a scepticism of sorts in democracy, with its elections and change of government.

 

He prefers some type of 'mengikut acuan kita sendiri'. Someone should tell him about a country called Malaysia where ' mengikut acuan kita sendiri'  has failed quite miserably.

Where for a large number of people, their only hope of happiness will be in heaven. And to get there they have to die first.

In the meantime others are stealing their money, in the name of their race, religion and dont know what else. It is a neat trick.

Indonesia is a long way away.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT