Throughout 2025, Indonesia underwent a significant structural shift under the nationalist «Red-and-White» agenda, marking the dissolution of earlier narratives regarding a «proxy» administration. This article analyzes how the executive transition evolved into a model of strictly centralized governance, where power was consolidated through the creation of a new institutional architecture, such as Daya Anagata Nusantara (Danantara) and the National Nutrition Agency (Badan Gizi Nasional, BGN), which placed policy execution directly under the presidential chain of command. Politically, 2025 was characterized by the formation of a «hyper-coalition» that engaged in the «total absorption» of opposition forces, thereby reconfiguring the legislative function from adversarial scrutiny into a space for elite accommodation. The core of this governance is rooted in the doctrine of «national resilience» (ketahanan nasional), a New Order legacy revived to legitimize the blurring of boundaries between civilian and security domains, symbolically reflected in the militaristic retreat at Magelang. Simultaneously, the state reinforced a «legalized architecture of control» through the implementation of the new Criminal Code and administrative moderation to discipline the digital sphere and public criticism. Macroeconomically, Indonesia entered a condition described as «stable, but stuck», where stability produced through administrative intervention successfully dampened social resistance while ignoring structural vulnerabilities such as labour precarity and a thinning middle class. In the global arena, the «free and active» foreign policy was translated into a strategy of transactional «multi-alignment», notably through the pursuit of BRICS membership. The article concludes that while this model delivers short-term stability, its durability in 2026 will be tested by the material consequences of expansive populist spending amidst a narrowing fiscal horizon.

Keywords – Indonesia; Prabowo Subianto; «Red-and-White»; national resilience; executive centralization; «hyper-coalition»; Danantara; democratic decline.

1. Introduction. What 2025 clarifies about Indonesia’s trajectory?

The first year of Prabowo Subianto’s presidency offers a vantage point from which Indonesia’s recent political trajectory becomes more legible. In 2025, developments clarify an ongoing reconfiguration of the post-Reformasi order, in which executive authority expands through coalition absorption, institutional reorganisation, and the selective revival of earlier governing vocabularies. This article argues that the consolidation observed in 2025 rests on two interrelated mechanisms. First, the reallocation of state resources through increasingly centralised and weakly supervised channels sustains elite cohesion while narrowing effective accountability. Second, the management of public discourse, particularly in the digital sphere, seeks to stabilise this arrangement by shaping how dissent is framed and circulated. Read in this way, 2025 records a transition of power while also exposing the operating logic of a political formation that combines formal democratic continuity with a tightening architecture of control.

The political texture of 2025 cannot be understood without accounting for the scale and recurrence of mass mobilisation. Across the year, Indonesia experienced at least twelve major demonstrations involving students, labour unions, civil society organisations, and sectoral movements, addressing demands that ranged from labour protection and welfare governance to environmental justice, land rights, policing, and democratic accountability [CNBC Indonesia 2025, 2 September; CNBC Indonesia 2025, 7 September]. These actions were not confined to episodic protest moments or single-issue campaigns. Instead, they formed a cumulative pattern of contention that unfolded alongside executive consolidation, signalling a widening gap between institutional politics and popular grievance. The recurrence of demonstrations across Jakarta and major provincial cities suggests that public dissent in 2025 functioned less as an anomaly to stability than as a persistent undercurrent accompanying it, one that reveals the social limits of a model of consolidation built on centralised decision-making and constrained channels of accountability.

Within this cycle of mobilisation, the symbolic condensation of protest around «17+8» acquired particular resonance. Emerging from demonstrations staged around Independence Day in August, the formulation linked the nationalist symbolism of 17 August with a set of eight core popular demands articulated by protest organisers, ranging from labour security and the rejection of coercive legislation to opposition against the militarisation of civilian governance and extractive development projects. The phrase circulated as a shorthand for discontent that explicitly refused to separate national celebration from political accountability. Rather than expressing rejection of the state as such, the 17+8 frame reasserted a claim over the meaning of independence itself as well as recoding it as unfinished and conditional. The twelve major demonstrations recorded across 2025, this mobilisation pattern stresses a central tension of the year: executive authority consolidated under conditions of macroeconomic and political stability, while social pressure accumulated outside institutional channels, increasingly articulated through the language of rights, welfare, and democratic restraint, even as the institutional capacity to respond to them was narrowed by centralised control over policy, resources, and public communication. The sections that follow examine how this configuration takes shape across executive politics, institutional restructuring, economic governance, and the management of information, with particular attention to the ways in which consolidation is sustained and contested.

2. Beyond the proxy narrative

The events of 2025 make it possible to identify the structural shifts beneath Indonesia’s executive transition with greater clarity than the inauguration itself. In late 2024 and early 2025, many observers framed President Prabowo Subianto’s assumption of office as a continuation of the Joko Widodo (Jokowi) era through a «proxy» administration, supposedly guaranteed by the elevation of Jokowi’s son, Gibran Rakabuming Raka, to the vice-presidency. That reading rested on a narrow institutional inference: that the vice-president’s lineage would translate into the former president’s continuing command of the executive. Yet the public politics of 2025 point to a more consequential settlement. Prabowo has sought to neutralize the «puppet» claim while simultaneously drawing on Jokowi’s symbolic capital in ways that consolidate his own authority. This choreography addresses a political vocabulary deeply rooted in the imagery of the shadow play, where the roles of the puppet-master (dhalang) and puppet (wayangnya)  serve as foundational metaphors for the manipulation of power and rivalrous conflict (Anderson 2006, p. 149).

This is clearest in Prabowo’s unusually direct rebuttal of the presiden boneka (puppet president) charge in a plenary cabinet meeting on 5 May 2025: «Saya dibilang… presiden boneka… seolah Pak Jokowi tiap malam telepon saya, saya katakan itu tidak benar» («I am called a puppet president… as if Mr Jokowi calls me every night; I say that is not true») [Kompas 2025, 6 May]. He framed ongoing consultation with Jokowi, and with other former presidents, as a matter of statesmanship rather than subordination. At the same time, he has deliberately staged Jokowi’s presence around state projects and public ceremonies, even instructing aides that former presidents should be invited when inaugurating programmes associated with their legacies [Kompas 2025, 6 May]. The performance is double-edged: it denies informal “twin suns” (matahari kembar)  politics while embedding Jokowi within a choreography that places Prabowo at the centre. Jokowi’s influence in 2025 appears to be moving from executive control to post-presidential mobilization. In September 2025, he stated that he had, “from the start”, «instructed volunteer networks (relawan) to support Prabowo-Gibran for two terms, presenting continuity as a political project to be guarded (dikawal) beyond a single electoral cycle» [Kumparan 2025, 19 September]. The implication is not that Prabowo lacks agency, but that the post-Jokowi apparatus is being reorganized into an external support structure whose currency lies in endorsements, networks, and legitimacy claims. These are assets that can reinforce a sitting president while remaining a potential source of pressure.

This shift matters because the governing idiom Prabowo has promoted in 2025 departs from developmental pragmatism in favour of a security-centred nationalism anchored in «national resilience» (ketahanan nasional), a doctrine that frames resilience as a comprehensive national capacity against threats. Scholarly work associated with Lemhannas emphasizes that the concept has historically expanded alongside the perceived scope of threats and is positioned as a strategic frame for the 2025-2045 long-term development agenda [Simanjuntak et al. 2024]. In parallel, Prabowo’s own state messaging has repeatedly cast defence capacity as the precondition of sovereignty and welfare, explicitly grounding this priority in constitutional language [Sekretariat Negara Republik Indonesia 2025, 7 February]. The “proxy” thesis thus becomes less useful over the course of 2025: it obscures how the presidency is consolidating symbolic authority, reordering coalitional dependence, and legitimizing a more security-forward understanding of state purpose – developments that exceed custodianship.

While the political choreography of the presidency suggests a move beyond the proxy narrative, the most consequential institutional departure from the governing logic of the late Jokowi era is the creation of Daya Anagata Nusantara (Danantara). It was established on 24 February 2025 through the near-simultaneous enactment of three legal instruments signed by President Prabowo Subianto at the State Palace: Law No. 1/2025, amending the 2003 State-Owned Enterprises (SOEs) Law; Government Regulation (PP) No. 10/2025 on Danantara’s organization and governance; and Presidential Decree No. 30/2025 appointing its supervisory and executive leadership [Sekretariat Negara Republik Indonesia 2025, 24 February]. The speed and concentration of these acts suggest that Danantara was designed as a foundational institution of the new presidency, rather than as an incremental adjustment to SOE policy. PP No. 10/2025 defines Danantara as “a body that carries out government tasks in the field of state-owned enterprise management” (badan yang melaksanakan tugas pemerintah di bidang pengelolaan BUMN) (Article 1(3)). Its authority is split between a Supervisory Board (Dewan Pengawas) and an Executive Body (Badan Pelaksana), both appointed and dismissed by the president. Key functions – including approval of annual work plans, capital adjustments, and key performance indicators – are subject to presidential consent (Article 7) [CNBC Indonesia 2025, 4 March]. The effect is to move strategic economic coordination away from routine ministerial bargaining and to locate it within a chain of command that culminates at the presidential centre. President Prabowo presented this centralization in strategic terms. On 17 February 2025, he described Danantara as a “konsolidasi semua kekuatan ekonomi kita yang ada di pengelolaan BUMN” (“the consolidation of all our economic strengths currently managed within SOEs”) [Kementerian Sekretariat Negara Republik Indonesia, 2025, 17 February]. At the fund’s launch, he argued that Danantara would manage assets belonging to “anak dan cucu kita” (“our children and grandchildren”) and therefore “harus bisa diaudit setiap saat oleh siapapun” (“must be auditable at any time by anyone”) [BBC Indonesia 2025, 19 February]. In this framing, economic governance is presented less as sectoral management than as an instrument of long-term stewardship and sovereignty.

Institutionally, Danantara should be read against a political economy in which access to state resources is routinely mediated through informal networks rather than programmatic party structures. Aspinall and Berenschot argue that post-Suharto electoral competition is saturated by clientelism, where political support is assembled through the everyday practices of vote buying, influence peddling, the manipulation of government programmes, and the extraction of rents from public projects, with religion, kinship, and local identities shaping how these exchanges operate on the ground [Aspinall and Berenschot 2018]. This pattern is reinforced by the weak mobilizational capacity of parties, a constraint linked to New Order legacies. Candidates often compensate by building their own campaign machines (tim sukses), which depend on ties to local brokers such as religious leaders, business actors, and bureaucrats. In this setting, pledges of privileged access to state resources – jobs, licences, contracts – become central to sustaining campaign organizations and rewarding supporters [Berenschot 2018]. Danantara alters the institutional terrain within which these practices unfold by concentrating ownership, investment authority, and strategic direction in a single entity whose leadership is appointed by, and answerable directly to, the president. In a patronage democracy where control over state assets is politically convertible, such centralization is likely to increase the value of the presidential centre as a gatekeeper over economic opportunity. Such institutional shifts echo earlier patterns of oligarchic reorganisation, where the centralisation of power and wealth enabled the executive to triumph in conflicts over rents and the strategic regulation of markets (Robison and Hadiz 2004, p. 86). How this authority is likely to be exercised becomes clearer when considering the sectors prioritized for early investment. At the launch, Prabowo stated that initial funding would target mineral downstreaming (hilirisasi, mandated domestic processing of raw materials), oil refining, petrochemicals, food production, aquaculture, and energy projects [BBC Indonesia 2025, 19 February]. Subsequent reporting indicates that several of these priorities overlap with projects already designated as Proyek Strategis Nasional (National Strategic Project or PSN), including nickel processing facilities and coal-based energy infrastructure [CNBC Indonesia 2025, 4 March].

Environmental organizations and policy critics have questioned this investment logic. Trend Asia has warned that prioritizing coal gasification (gasifikasi batubara) and continued mineral extraction risks locking Indonesia into carbon-intensive pathways at a time when renewable deployment remains limited [BBC Indonesia 2025, 19 February]. Economists at CELIOS have raised a related concern: that extractive megaprojects tend to generate limited employment gains while pushing social and ecological costs onto affected communities [Bhima Yudhistira, quoted in BBC Indonesia 2025, 19 February]. The nickel sector brings these tensions into sharper relief. In late May 2025, Danantara and the Indonesia Investment Authority (INA) announced a strategic partnership with Eramet to support nickel downstreaming [INA 2025, 28 May; Jakarta Globe 2025, 28 May]. This sits uneasily alongside public scrutiny of the environmental and rights impacts associated with nickel expansion in eastern Indonesia. Weda Bay, Halmahera, has been linked in reporting and advocacy documentation to deforestation pressures and to the displacement risks faced by the O’Hongana Manyawa, an indigenous nomadic community [BBC Indonesia 2024, 1 August; Survival International 2024, 25 November]. Norway’s Government Pension Fund Global, acting on a recommendation from its Council on Ethics, decided in 2025 to exclude companies linked to Eramet’s nickel operations from its investment universe, citing serious environmental damage and violations of indigenous rights [NBIM 2025, 12 September].

Governance risks are compounded by Indonesia’s recent record of corruption in state-owned enterprises. Indonesia Corruption Watch reports that between 2016 and 2023 there were at least 212 corruption cases involving SOEs, with estimated state losses of Rp 64 trillion [Indonesia Corruption Watch 2024]. The organization has also warned that consolidating assets under Danantara, alongside revised oversight provisions in the amended SOE Law, could weaken audit independence and magnify systemic vulnerabilities [Indonesia Corruption Watch, quoted in BBC Indonesia 2025, 19 February]. This pattern points to Danantara operating less as a conventional sovereign wealth fund at arm’s length from the executive and more as a vehicle for strategic direction. Its role in financing PSN, including projects that are extractive, land-intensive, and politically contested, increases the presidency’s capacity to sustain a particular development model despite rising environmental, social, and reputational costs. Danantara therefore constitutes an institutional rupture because it centralizes economic authority and embeds that authority within a presidency that treats large-scale extractive development as a core component of ketahanan nasional. Economic consolidation under Danantara aligns with a broader shift towards executive-led strategic governance, where growth, security, and sovereignty are pursued through direct control over capital allocation.

The institutional centralization represented by Danantara facilitates a deeper conceptual shift where the analytical limits of policy continuity become apparent as downstreaming is examined through the lens of security doctrine. Under the Jokowi administrations, downstreaming was framed primarily as an economic instrument. Official explanations stressed value addition, employment creation, export upgrading, and reduced reliance on raw commodity exports; media coverage of smelter development similarly presented the policy as a means to raise GDP, increase state revenues, and stimulate downstream industries across mining and related sectors [Marta 2024, 26 September]. Under President Prabowo Subianto, the emphasis shifts. Downstreaming is increasingly articulated as a pillar of ketahanan nasional, rather than as a sectoral development strategy. Historically, ketahanan nasional emerged as a New Order (1966-98) doctrine that treated economic resources, infrastructure, and social organization as integrated components of national defence. This framework draws upon the New Order’s Staatsidee of integralism, an ideology of the «organic state» that historically positioned social and political organization as an inseparable whole under state authority (Bourchier 2015, pp. 2-3). As Fibiger shows, the concept combined authoritarian developmentalism with a depoliticized vision of social cohesion and was later extended in ASEAN discourse as «regional resilience» [Fibiger 2023, 12]. Its contemporary redeployment in economic policy is analytically consequential: it signals a reassertion of security reasoning in domains that had previously been governed in largely technocratic economic terms.

The doctrinal roots of this securitized register can be traced to Sistem Pertahanan dan Keamanan Rakyat Semesta (Sishankamrata, «Total People’s Defence and Security System»). Sishankamrata has long been understood as a framework for mobilizing national resources in the service of defence. At the same time, they argue that its inward orientation and fragmented implementation limit Indonesia’s capacity to respond effectively to contemporary challenges such as regional power competition and the demands of modern warfare [Daneswara and Nasution 2025, 357-382].

Legal and constitutional scholarship underscores how deeply this integration is embedded. Reza situates Sishankamrata within Indonesia’s constitutional and ideological trajectory and argues that “total people’s defence” doctrines have, in practice, legitimated the extension of military influence into civilian arenas, including the creation of state-sponsored militias – developments that carried recurring risks for civil liberties and human rights [Reza 2017, 156-158]. Even in post-authoritarian Indonesia, this legacy helps explain why securitized vocabularies continue to blur the boundary between development policy and security governance. This blurring is especially visible in the policy treatment of critical minerals. The Ministry of Energy and Mineral Resources designated 47 types of «critical minerals» in 2023, defining them as essential to the national economy and to national defence and security», exposed to supply disruption, and lacking viable substitutes. President Prabowo, in establishing the Mineral Industry Agency (MIA) in August, framed critical minerals as resources that must be both «used and preserved» because of their strategic importance to the defence sector. The appointment of the minister of defence as chair of the MIA advisory board embeds mineral policy institutionally within the defence apparatus [Triantama 2026, 8 January]. Within this framework, downstreaming is no longer justified primarily as industrial upgrading. It is recoded as a means of securing strategic autonomy in defence production, reducing exposure to external pressure, and strengthening national self-reliance amid technological decoupling and intensifying great-power competition [Triantama 2026, 8 January]. This geo-economic logic is reinforced by Prabowo’s public portrayal of a more hostile international environment – marked by war, conflict, and proliferating tariff regimes – which he argues demands calm but coordinated national responses [Yanwardhana 2025, 6 August].

The implications of this recoding are substantial. Once downstreaming is folded into ketahanan nasional, industrial strategy can be presented as an extension of national defence. That move elevates selected projects above routine policy debate and reduces the space for civilian contestation – an effect that echoes how ketahanan nasional functioned as an organizing doctrine under the New Order [Fibiger ٢٠٢٣; Reza ٢٠١٧]. On this reading, continuity lies in the instrument rather than in the governing logic: downstreaming persists, but its justificatory frame shifts from economic competitiveness towards a securitized language of national survival [Marta 2024, 26 September; Triantama 2026, 8 January; Yanwardhana 2025, 6 August]. This recalibration of internal development strategies is mirrored in a parallel narrowing of Indonesia’s foreign policy. In early 2025, the government formally pursued membership in the BRICS grouping, a move that altered the operational meaning of Indonesia’s long-standing bebas aktif (“free and active”) doctrine. Historically, bebas aktif was articulated by Mohammad Hatta in ١٩٤٨ as a strategy of strategic equidistance, intended to preserve autonomy by avoiding entanglement in great-power rivalry. This doctrine, famously characterised by Mohammad Hatta as Mendayung Antara Dua Karang (“Rowing Between Two Reefs”) established a principled framework for non-alignment that prioritized national autonomy during the early stages of the Cold War (Leifer ١٩٨٣, p. ٢٠). In his speech, Hatta rejected alignment with either the United States or the Soviet Union, arguing that Indonesia’s security depended on maintaining room for manoeuvre rather than joining “perdjoangan kedua raksasa besar” (“the struggle of two great giants”) [Hatta 1948, 32-33]. The doctrine thus functioned as a normative restraint and alignment was avoided as a matter of principle, rather than treated as a tactical option.

Indonesia’s 2025 turn towards BRICS does not discard bebas aktif, but it narrows its scope. Alignment is no longer treated as inherently undesirable; it is assessed instrumentally against anticipated economic and strategic returns. This logic is visible in official justifications that present BRICS participation as a means to expand Indonesia’s autonomy rather than to compromise it. The Ministry of Foreign Affairs has framed engagement with BRICS to “actively shape norms” while maintaining independence, arguing that participation remains compatible with bebas aktif because Indonesia does not bind itself to any single camp [BBC Indonesia 2025, 17 January]. This reinterpretation, however, generates acute pressures, particularly in Indonesia’s relations with the United States. Reporting on Indonesia’s BRICS move highlights the geopolitical risks of closer association with a bloc widely perceived as challenging Western economic dominance. Analysts interviewed by BBC News Indonesia warned that membership could place Indonesia in a structurally disadvantageous position under a second Trump administration, given explicit threats of punitive tariffs against BRICS countries accused of undermining the US dollar [BBC Indonesia 2025, 20 January]. In this context, bebas aktif shifts from principled non-alignment towards managed exposure and Indonesia accepts the risks of partial alignment in exchange for perceived strategic leverage. This narrowing is also visible in Indonesia’s maritime diplomacy. Joint statements issued with China in 2024-2025 referring to “klaim yang tumpang tindih” (“overlapping claims”) in disputed waters provoked controversy because they appeared to soften Indonesia’s long-standing position as a non-claimant state in the South China Sea under international law. The proposals for joint development risk conceding legal ground to China’s maritime claims, even when framed in pragmatic economic terms. The logic underlying these initiatives reflects a readiness to trade juridical clarity for short-term diplomatic or economic gains, recalibrating Indonesia’s traditional insistence on legal distance from claimant disputes [Darmawan 2025, 31 May].

The personalization of diplomacy under President Prabowo further sharpens this shift. Since his inauguration, Prabowo has relied heavily on summit diplomacy, undertaking an unusually dense schedule of bilateral and multilateral engagements and dealing directly with major powers. Within six months, Indonesia emerged as one of Southeast Asia’s most active diplomatic actors, driven by what observers described as a «diplomatic charm offensive» aimed at securing a larger global profile. In a single week in April 2025, Indonesia became China’s first two-plus-two dialogue partner, intensified engagement with Russia, and Prabowo undertook a tour of five Middle Eastern countries [King 2025, 5 May].Summit diplomacy has produced tangible results, including movement on the Indonesia-EU Comprehensive Economic Partnership Agreement and tariff-related progress in trade talks with the United States. It has also generated missteps, among them controversial initiatives on maritime cooperation with China and proposals related to Gaza that lacked clear institutional backing [Sugiono 2025, 6 August]. The prominence of leader-to-leader engagement marks a more assertive and personalized foreign policy style, departing from the procedural restraint traditionally associated with bebas aktif. These developments indicate that Indonesia’s foreign policy is undergoing reinterpretation rather than abandonment of its foundational doctrine. Bebas aktif no longer operates chiefly as a normative barrier against alignment; it functions instead as a flexible mandate for selective engagement. The pursuit of BRICS membership, adjustments in maritime diplomacy, and the reliance on summit-driven initiatives point to a foreign policy that prioritizes strategic positioning and immediate gains over doctrinal distance. In this sense, «free and active» is narrowed rather than discarded, recast as an instrument for navigating a fragmented international order rather than as a principled refusal to choose sides.

Underpinning these shifts in institutional structure and strategic doctrine is a macroeconomic landscape that stands out in 2025 less as a year of acceleration than as one of managed stability. Official data show that the economy expanded by 5.04 per cent year-on-year in the third quarter of 2025, with growth disproportionately supported by the external sector. Exports of goods and services rose by 9.91 per cent, while the trade balance recorded a surplus of USD 5.49 billion by August [BPS 2025, 5 November]. This configuration of export-led growth alongside subdued domestic demand has insulated the economy from short-term shocks and provided a buffer for political and institutional consolidation. Indonesia has entered a condition best described as stable, but stuck: a macroeconomic equilibrium in which fiscal and monetary tools remain active but operate at cross-purposes. Since the pandemic, fiscal policy has remained expansionary, with public spending sustaining infrastructure programmes and politically salient initiatives such as energy subsidies and free school meals. Budget deficits have hovered around 2.5-3 per cent of GDP, financed largely through the issuance of government bonds (SBN). Bank Indonesia (BI), in turn, has absorbed a substantial share of this issuance, holding over Rp 1,600 trillion in SBN by March 2025 – around 8 per cent of GDP [Friawan 2025]. This fiscal impetus has been offset by monetary restraint. BI has maintained a relatively tight stance, keeping policy rates high and sterilising liquidity through reverse repos and other central bank instruments. Rather than amplifying demand, these measures prioritize exchange-rate stability, inflation control, and market credibility. The result is a stabilizing configuration that limits domestic traction: public spending props up activity, while tight monetary conditions weaken the transmission to household consumption and private investment. Growth continues, but in a low-momentum register; liquidity remains available yet circulates cautiously through the real economy.

This macroeconomic configuration has important political consequences. Stability, even when shallow, functions as an enabling condition for executive consolidation. Export earnings, trade surpluses, and subdued inflation reduce immediate distributive pressures, allowing the administration to pursue institutional restructuring without triggering acute economic contestation. In this sense, macroeconomic management in 2025 has not generated expansionary transformation, but it has bought time. The interaction between stability and power becomes clearer when set alongside Indonesia’s evolving political economy, and the executive aggrandizement in Indonesia has often advanced through negotiated accommodation among political elites rather than through crisis [Mietzner 2025]. Under conditions of relative economic calm, elites are more willing to tolerate centralization so long as their core interests are protected. Stability lowers the cost of acquiescence. It allows authority to be consolidated incrementally while preserving a formal democratic shell. At the same time, stability constrains ambition. The elite collusion has also placed limits on executive power, deterring overt constitutional rupture or full authoritarian closure [Mietzner 2025]. This countervailing dynamic is mirrored in the macroeconomic sphere. BI’s continued insistence on independence and sterilization signals a refusal to subordinate monetary policy fully to fiscal priorities. Protecting central bank credibility has anchored expectations and reassured markets, but it has also capped the growth impulse and exposed the absence of strategic coordination [Friawan 2025].

Recent political developments suggest that this equilibrium is becoming more fragile. Assessments of the Prabowo administration’s first year point to growing dismissiveness towards civil society, weakened opposition, and the narrowing of oversight institutions [Fathana 2025]. Yet these shifts have unfolded without dramatic economic rupture. Protest is managed primarily through narrative control rather than overt repression, while fiscal trade-offs – such as reallocating education funds to finance flagship programmes – are justified in technocratic terms. Stability absorbs discontent even as it narrows channels for contestation. This dynamic also helps explain the administration’s reliance on executive instruments such as Presidential Instructions (Instruksi Presiden, Inpres). The issuance of Inpres No. 9/2025 to accelerate the formation of “Red and White” Village Cooperatives illustrates how macroeconomic calm enables policy speed and top-down implementation [Sekretariat Kabinet Republik Indonesia 2025, 29 September]. Rural economic incorporation is framed as empowerment, but institutionally it tightens the linkage between local livelihoods and the central state’s nationalist agenda. In the absence of macroeconomic calm, such rapid territorialization of policy would carry higher political risk. Methodologically, 2025 therefore reads as a threshold year defined less by crisis or boom than by consolidation under constrained growth. The administration appears less preoccupied with the performance of consensus than with building executive capacity while the economy remains stable enough to mute resistance. The principal check on this trajectory is fiscal. Prolonged reliance on BI to stabilize government financing risks blurring fiscal-monetary boundaries and reviving concerns about fiscal dominance [Friawan 2025]. If growth falters or confidence erodes, the same stability that enables consolidation may become a liability. Macroeconomic stability in 2025 reduces friction, allowing executive consolidation to proceed in a low-growth equilibrium where authority expands because stagnation remains orderly.

3. Executive politics and coalition management

The political landscape of 2025 has been shaped by the consolidation of a hyper-coalition that has altered the relationship between executive power and legislative authority. Under President Prabowo Subianto, coalition-building has taken the form of total absorption: opposition forces are not merely defeated in parliamentary votes but drawn into the executive’s patronage architecture. The effect is to narrow the room for the People’s Representative Council (DPR) to operate as an autonomous site of scrutiny. In this setting, the Red and White Cabinet is more than an enlarged governing team; it functions as an instrument for shifting political negotiation away from open parliamentary contestation and into executive management, where deals are concluded out of public view and discipline is maintained through access to state resources. One immediate consequence is the erosion of parliamentary oversight as a routine practice. Reflecting on the first year of the Prabowo-Gibran administration, contemporary commentary has described executive-legislative relations as resting on political compliance rather than a working balance of power. In this reading, the DPR’s legislative and oversight roles increasingly function to legitimize executive initiatives instead of constraining them, as parliamentary parties tend to align with government direction with little substantive debate [Avisena 2025, 10 October]. The point, however, is not that contestation has vanished. It has been reorganized. When most parties are incorporated into the executive orbit, disagreement tends to be managed within the coalition rather than staged publicly through parliamentary procedure.

This pattern is consistent with Dan Slater’s analysis of party cartelisation, in which presidents practice promiscuous power-sharing – remaining open to sharing executive authority with any significant party after elections – thereby rendering opposition contingent, fragile, and, in extreme cases, extinguishable [Slater 2018]. Slater’s framework helps explain why a «fat cabinet» can be politically rational for presidents. Expanding the coalition does not necessarily dilute presidential power; it can reduce the leverage of each party by forcing patronage claims to be shared among more actors while the president retains agenda control. In such a setting, what appears as power-sharing can operate as a mechanism of executive dominance, because it blurs the boundaries of opposition for voters and weakens parliament’s incentives to scrutinize government policy. Politicians compete through the distribution of small projects, cash, and goods; campaign finance is raised through the trading of permits and contracts; and tim sukses and personal networks often matter more than party organizations [Aspinall and Berenschot 2018]. An expanded cabinet becomes a central node in this exchange system, tying elites to the executive through tangible stakes. When incorporation into the executive becomes the main route to resources and protection, the DPR’s oversight role is reshaped, because many legislators are embedded in the same ecosystem they are expected to regulate. The democratic risk is therefore institutional rather than episodic. Once opposition is absorbed and oversight becomes compliance, the DPR ceases to operate as an arena for adversarial accountability and instead functions as a transmission belt for executive priorities, a concern captured in contemporary commentary that portrays parliament as «willing to be used» and thus enabling a presidency to face «no obstacles» in realizing its agenda [Avisena 2025, 10 October]. Under these conditions, the locus of political contestation shifts. It is no longer organized primarily as government versus opposition, but as competition among insiders for access, portfolios, and rents – an intra-elite bargaining equilibrium that Slater identifies as hostile to «vertical accountability» between voters and politicians [Slater 2018].The reorganisation of political competition has direct implications for how state resources are allocated and controlled. As coalition incorporation expands, access to ministries, agencies, and state-owned enterprises becomes the primary channel through which political actors secure both influence and material returns. Institutional expansion, including the proliferation of new agencies and taskforces, does not simply reflect administrative preference; it multiplies sites through which budgets, procurement, and contracts can be distributed. In this setting, rent allocation is not an unintended by-product but an organising principle of coalition maintenance. Executive consolidation therefore reorders the hierarchy of access to the state: actors positioned closer to the presidency gain privileged entry to fiscal flows and policy instruments, while those outside the executive orbit face diminishing capacity to compete. The erosion of oversight intensifies this pattern, as the same actors who benefit from allocation mechanisms are embedded within institutions formally tasked with scrutiny. What emerges is a system in which political stability is sustained through controlled distribution, with executive authority, resource allocation, and compliance becoming more tightly linked.

This coalition architecture also shapes the feasibility of institutional rollback, because control over political incorporation is matched by control over the distribution of resources that sustains it. Tempo’s editorial on President Prabowo’s stated preference to return regional head elections to the DPRD frames the proposal as part of a more centralized governing style reminiscent of Guided Democracy and the New Order, enabled by broad party support in parliament [Tempo 2025, 23 December]. The analytical point does not depend on accepting the editorial’s rhetorical register in full. Its value lies in what it signals about the permissive political conditions created by hyper-coalition governance: when most parties are already embedded within the executive bargain, reforms that would ordinarily provoke sustained parliamentary resistance can be advanced as elite consensus projects. In this sense, the hyper-coalition weakens checks and balances while also shifting the default setting of lawmaking from contestation to accommodation. This shift reflects a historical tendency within the Indonesian state in the 1950s toward menampong – a posture of accommodation and incorporation used to neutralize sectional resistance by buying off potential challengers within an expansive elite consensus (Feith 1962, p. 570).

The construction of this hyper-coalition serves as the political foundation for a defining feature of executive governance in 2025: the creation of an institutional architecture that concentrates policy execution, fiscal leverage, and political credit in bodies positioned closer to the presidency than conventional line ministries. The administration expanded the number of specialized agencies and councils, signalling a preference for vertical command chains and fast, leader-branded delivery over the slower bargaining and administrative friction of established bureaucratic compartments [Detik Finance 2025, 15 June]. The National Nutrition Agency (Badan Gizi Nasional, BGN) illustrates the logic of centralized distributive politics. By placing the flagship Makan Bergizi Gratis (Free Nutritious Meal) programme within a non-ministerial agency endowed with exceptional budgetary weight, the presidency captures both the material flow of welfare distribution and the symbolic ownership of provision. In parallel, the launch of Danantara institutionalizes a “super-holding” logic in which state commercial assets are consolidated as a single strategic portfolio under executive direction, framing state capital less as dispersed sectoral management and more as a unified instrument of national strategy [Detik Finance 2025, 15 June]. This design is reinforced by fiscal instruments that tighten subnational dependence on the centre. Government Regulation No. 38/2025, which opens the possibility for local governments and state-owned enterprises to borrow from the central government, formalizes a new channel through which Jakarta can shape local fiscal room. The regulation’s design also makes clear that “assistance” can operate as discipline: repayment mechanisms, including the possibility of deductions from transfers, emphasize how recentralization can be pursued through ostensibly technical fiscal instruments.

BGN, Danantara, and these emerging fiscal channels are best read as components of a single architecture rather than as disconnected initiatives. Earlier reform discourse on holdingisation (holdingisasi; restructuring or merging of companies) – focused on value creation, capital allocation, and stronger control over BUMN – helps clarify the managerial rationale that executive centralisation can draw upon [Zahruddin 2021, p. 98]. What changes in 2025 is the governing form. Distributive delivery and the consolidation of state capital are increasingly channelled through institutions positioned close to the presidency, tightening the linkage between policy execution, credit-claiming, and command. The internal culture of this centralized architecture took shape during the Red and White Cabinet Retreat at the Military Academy in Magelang in October 2024. The retreat introduced military routines into civilian governance. Ministers and deputy ministers participated in morning exercises and marching drills, which the Presidential Secretariat described as a means to «synchronize actions» and build discipline and unity of command [Sekretariat Kabinet 2024, 24 October]. From that point, the «Magelang spirit» functioned as a governing ethic: it elevated speed, obedience, and loyalty to presidential directives as core administrative virtues, while pushing deliberation and procedural negotiation to the margins.

Placed within Indonesia’s longer history of civil-military relations, the retreat follows a familiar pattern. Periods of perceived civilian weakness have repeatedly created openings for military logics to shape civilian institutions. The erosion of civilian supremacy has often been enabled by two conditions: fragile civilian governance and the armed forces’ awareness of their capacity to intervene politically and economically [Wiguna 2021, 22 July]. The Magelang retreat fits this trajectory. It does not revive an explicit dwifungsi doctrine, yet it embeds a militarized ethos within civilian leadership. Discipline substitutes for debate, hierarchy structures coordination, and accountability shifts upward rather than outward. This ritualized adoption of “the military way” signs a gradual re-entry of the armed forces into non-military roles, utilising a territorial system that has been repurposed to provide logistical support for the administration’s flagship civilian projects (Joshua 2024). This emphasis on discipline serves two connected purposes. First, it manages friction within a cabinet assembled from a wide and heterogeneous coalition. By framing political office as a form of duty comparable to military service, the administration seeks to suppress  sectoral ego (ego sektoral ), a long-standing source of bureaucratic fragmentation. Second, it reinforces the President’s self-presentation as the commander of development. Governance is cast as an operational mission with targets and deadlines rather than a negotiated process among institutions. The choice of a military academy as the site of civilian orientation signals a broader securitization of the bureaucracy, in which command coherence and efficiency outweigh procedural deliberation.

The translation of this militarised executive culture into the legislative sphere has further reshaped the role of parliament. With the consolidation of a hyper-coalition holding a dominant parliamentary majority, the legislature ceased to operate as a meaningful veto point in 2025. Contemporary commentary described it as a “consensual rubber stamp”, as major legislation – most prominently the 2026 State Budget (RAPBN) – moved through commissions with limited substantive debate [Kompas, 2025, 16 August]. This outcome followed directly from a strategy of total absorption, which drew potential opponents into the governing bloc rather than leaving them outside it. The political logic behind this oversized coalition is straightforward. The President secured executive authority, yet governing stability still depended on assembling an expansive parliamentary alliance. Over time, this arrangement exchanged stability for oversight. Consensus became a mechanism of containment. Scrutiny shifted into closed-door bargaining, and public visibility into policymaking narrowed. Legislative support increasingly rested on accommodation rather than programmatic agreement. By late 2025, the Indonesian Democratic Party of Struggle (PDI-P) remained formally outside the Red and White framework, yet its capacity to operate as an effective opposition weakened as other potential allies accepted incorporation. The DPR functioned less as a forum of public contestation and more as a space for managing coalition relations.

While the coalition manages broad elite interests, the specific executive relationship between the president and vice-president addresses the inheritance of political legitimacy. Early expectations framed the Prabowo presidency as a proxy continuation of the Jokowi era; however, the executive relationship that took shape in 2025 followed a different pattern. President Prabowo asserted clear dominance, while Vice President Gibran Rakabuming Raka occupied a narrower, more public-facing portfolio oriented towards subnational engagement, youth constituencies, and digital initiatives. This division enabled the President to retain control over defence, foreign policy, and macroeconomic direction, while Gibran helped sustain links to Jokowi’s residual political base. Civil-military scholarship offers a useful lens for interpreting this arrangement: where civilian institutions are fragile, non-civilian logics can shape governance without overt institutional rupture [Wiguna 2021, 22 July]. In this setting, inherited legitimacy can be translated into administrative function. Gibran’s visibility contributes to coalition stability even as substantive authority concentrates within a smaller executive core. Questions surrounding dynastic influence are deferred rather than resolved.

Executive consolidation reached a further turning point in September 2025 with the replacement of Sri Mulyani Indrawati by Purbaya Yudhi Sadewa as Minister of Finance. The change carried significance beyond personnel. It indicates a move away from the technocratic fiscal stance that had underpinned Indonesia’s macroeconomic credibility in the late Reformasi period. Reporting at the time noted market unease and underscored the symbolic weight of Sri Mulyani’s departure [Reuters 2025, 8 September; Jakarta Post 2025, 9 September]. Purbaya’s public orientation aligns with President Prabowo’s preference for a more expansionary and growth-driven approach. The reshuffle therefore suggested a broader shift in governing priorities: personalized authority and coalition pragmatism began to weigh more heavily than technocratic restraint. Yanuar Nugroho warns that such conditions risk producing policy driven by political intuition with limited correction from data, expertise, and institutional planning, creating an appearance of strength that can mask structural vulnerability [Kompas 2025, 21 April].

Despite this consolidation, hyper-coalition stability still depends on disciplined accommodation among actors with divergent interests. Cabinet design, portfolio allocation, and institutional boundaries structure that accommodation. At the same time, the proliferation of new agencies and taskforces has generated friction with established ministries, particularly over authority and procurement. The creation of additional bodies alongside line ministries can sharpen rivalries even when the stated aim is tighter coordination, because jurisdictional boundaries and budget control become contested terrain [Detik Finance 2025, 15 June]. The President’s inner circle increasingly mediates these disputes, reinforcing governance practices that operate outside formal institutional channels. This absence of robust opposition and the rise of informal mediation have fundamentally reshaped legislative practice. Adversarial scrutiny has given way to coalition management, with dissent more likely to be expressed privately than through open parliamentary contestation. With major programmes and budgetary priorities advanced through a legislature dominated by governing parties, the space for sustained oversight narrows and public visibility into deliberation diminishes [Kompas, 2025, 16 August].

These developments clarify the governing logic of 2025. The Prabowo administration prioritized political order and centralized authority as foundations of development. The large cabinet functioned as an instrument of discipline and co-optation. Absorbing rivals, normalizing a militarized executive culture, and recalibrating economic leadership away from technocratic restraint produced a system oriented towards speed and command coherence [Kompas 2025, 21 April]. This approach delivered short-term stability and rapid policy rollout, yet Indonesia’s historical experience points to longer-term risks. Contemporary commentary has warned that appeals to effectiveness can legitimize the gradual contraction of deliberative space, while erosion of checks and balances tends to proceed incrementally rather than abruptly [Kompas 2025, 1 April]. As the administration moves into 2026, the central question is whether this model can absorb fiscal constraints and social pressure without further weakening the civilian foundations of governance.

4. Law, institutions, and the architecture of accountability

The institutional landscape of accountability in 2025 shows a deliberate retooling of law, oversight, and procedural justice to serve executive priorities. Formal institutions still function, but their work is increasingly channelled into a governing logic that favours stability, speed, and central control. The shift lies less in the presence of rules than in how legality is deployed: to manage contestation, narrow avenues of access, and contain challenges before they gain political traction. This functional deployment of legality reflects a long-standing historical struggle in Indonesia, where the ideal of a «Rechtsstaat» (rule of law state) has frequently succumbed to patrimonial political orders that prioritize the exercise of political power over judicial constraints (Lev 1978). Civil society organisations were among the first to register this change. In its October 2025 evaluation marking one year of the Prabowo-Gibran administration, LBH Jakarta reads the year through the behavioural markers of authoritarian drift identified by Levitsky and Ziblatt – delegitimising opposition, tolerating violence, and restricting civil liberties [LBH Jakarta 2025]. The value of this diagnosis is analytical; it ties policing practices, legal change, and development instruments into a single governing pattern in which civic freedom is treated as a variable to be managed rather than a foundation to be protected.

This pattern is clearest in the contraction of civic space. Throughout 2025, demonstrations against legislative and policy initiatives faced aggressive policing and broad criminalisation. LBH Jakarta documents repeated resort to force during dispersals – tear gas and water cannon, beatings, and arbitrary arrests – and describes a recurring sequence: intimidation before demonstrations, detention without proper documentation, prolonged interrogations, and post-hoc prosecutions relying on vague provisions [LBH Jakarta 2025]. The report also describes sustained digital repression, including monitoring, doxxing, phone seizures, spamming, and the targeting of critics under elastic legal bases such as Pasal 27 of the UU ITE and provisions of the KUHP [LBH Jakarta 2025]. The key point is that repression in 2025 is structured rather than exceptional. Administrative justifications such as «public order» or «lack of permit» become routine gateways to coercion, even though the legal framework for public assemblies emphasises notification rather than prior permission [LBH Jakarta 2025].

Institutional boundaries between civilian governance and the security apparatus have likewise become more porous. LBH Jakarta records the involvement of TNI personnel in several episodes of protest handling, including during large demonstrations such as #TolakRUUTNI and #ReformasiDikorupsi [LBH Jakarta 2025]. In a post-1998 context, this matters because it signals a normalisation of blurred defence and domestic security roles. The effect is not the formal restoration of (dual function «dwifungsi») as doctrine, but the re-legitimation of military presence in civilian political life through routine operational practice.

Legal process has provided only limited correction; the Constitutional Court (Mahkamah Konstitusi, MK) continues to operate as a site of adjudication, including in the electoral domain. Disputes arising from the 2024 regional elections (Pilkada» (regional elections) led to re-voting («pemungutan suara ulang», PSU) in ٢٤ regions, while civil society monitoring underscored the persistence of money politics, abuse of state facilities, and enduring weaknesses in electoral administration and oversight [ICW ٢٠٢٥]. Yet the PSU episode also shows how judicial remedies can coexist with political continuity: the Court can correct procedural violations without altering the incentive structures that generate them. ICW’s warning is direct: PSU risks reproducing the same distortions unless supervision and enforcement improve, and unless the KPU’s candidate verification procedures and Bawaslu’s oversight capacity are materially strengthened [ICW 2025]. On structurally sensitive issues, access to constitutional justice itself becomes contested. LBH Jakarta highlights the Court’s handling of challenges to the TNI Law and related constitutional litigation, including decisions that restrict standing even when petitioners claim concrete harms and invoke public interest [LBH Jakarta 2025]. The long-term implication is serious: constitutional review persists in form, but the circle of recognised constitutional subjects narrows. The Court remains open, yet increasingly difficult to access for those most exposed to securitisation, coercive policing, or development-led displacement.

The legal architecture of development policy provides another lens on the redesign of accountability. The PSN framework is defended in the idiom of acceleration and national interest, yet the People’s Movement Challenging National Strategic Projects (Gerakan Rakyat Menggugat Proyek Strategis Nasional, GERAM PSN), a civil society coalition challenging the constitutional basis of National Strategic Projects) argues that its legal foundations are scattered across sectoral statutes and rely on vague enabling language – facilitation and acceleration of National Strategic Projects (kemudahan dan percepatan Proyek Strategis Nasional) – that permits broad interpretation [GERAM PSN 2025]. In this account, such elasticity allows the executive to advance large-scale projects under thin oversight and weak avenues for meaningful participation, while widening the category of public interest used to justify land acquisition and displacement. The same intervention frames the dispute in constitutional terms, pointing to a concentration of power, reduced legislative scrutiny, and weakened rights protections under the 1945 Constitution (UUD 1945) provisions on legal certainty and welfare. The procedural posture described is equally revealing: the government requested postponement on the grounds of incomplete submissions, while the House of Representatives (Dewan Perwakilan Rakyat, DPR) did not appear, reinforcing perceptions of institutional indifference even as affected citizens travelled to Jakarta to testify. These elements suggest a governing habit of selective seriousness, in which law is mobilised to authorise acceleration but avoided when it demands justification. The strategic use of law to facilitate National Strategic Projects aligns with a «developmentalist» and formalistic conception of the rule of law, which prioritizes market-friendly efficiency and state-led economic penetration over emancipatory values or genuine legal certainty for citizens (Anggoro 2020, pp. 268-269).

The anti-corruption field shows a related shift away from adversarial constraint towards administrative compliance. A systematic review of Indonesian anti-corruption policy research argues that effectiveness in local governance depends on institutional reform, capacity-building, community participation, and, crucially, the certainty of legal sanctions [Paranata 2025]. It also notes that local political dynamics – majority coalitions and dynastic practices – often obstruct anti-corruption efforts, and that reform programmes can unintentionally reinforce dominant actors [Paranata 2025]. Under conditions of coalition discipline and elite accommodation, anti-corruption is easier to reposition as integrity management than to sustain as elite accountability. Oversight may continue through measurement and reporting, but it is less able to reach the networks through which state programmes are turned into rents. In such a setting, anti-corruption enforcement becomes uneven not because legal standards vanish, but because the institutional conditions required to apply them against politically protected actors become progressively weaker.

More broadly, the accountability order that took shape in 2025 operates without dismantling oversight institutions outright. Its force lies in reducing their effective bite while preserving their formal presence. Courts continued to hear cases, audit and supervisory bodies continued to issue findings, and anti-corruption discourse remained part of official language. Yet these institutions increasingly operated within a denser administrative environment in which access was narrowed, enforcement was selective, and procedural compliance often substituted for substantive control. This makes corruption in 2025 better understood as a governance effect of weakened constraint rather than as a question of illicit enrichment alone. When oversight is filtered through executive priorities, legal review delayed or narrowed, and audit findings detached from meaningful sanction, the state retains the appearance of accountability while losing much of its capacity to interrupt rent-seeking, patronage allocation, or politically protected misuse of authority.

Criminal law reform further intensifies this architecture by widening the range of discretionary tools available against dissent. As the Criminal Code (KUHP) is scheduled to take full effect in January 2026, reporting has highlighted a set of controversial provisions that bear directly on political expression and mobilisation, including insult and defamation articles concerning the president and state institutions, restrictions on demonstrations that proceed without notification, and ideologically framed offences [Tempo 2026, 2 January]. Even where some provisions operate as complaint-based offences (delik aduan), the broader political effect is chilling rather than punitive. The presence of the offence, combined with discretionary enforcement, reshapes the behaviour of journalists, activists, and academics without the need for widespread prosecution [Tempo 2026, 2 January]. This development aligns with the pattern identified by LBH Jakarta: coercion increasingly operates through procedure, and legality functions as an instrument for managing public criticism rather than safeguarding it [LBH Jakarta 2025]. Some forms of accountability in 2025 persist, but in altered forms. Courts continue to adjudicate, oversight bodies continue to issue findings, and elections continue to take place. Yet challenges to executive authority now pass through a denser set of filters, including administrative hurdles, narrowed procedures, and legal instruments that raise the costs of mobilisation and speech. Should this pattern persist into 2026, Indonesia will retain an elaborate architecture of accountability, but one that operates primarily as a system of process rather than a system of constraint. The central issue is therefore not institutional disappearance, but institutional conversion: accountability survives in form while losing much of its capacity to discipline the allocation and exercise of power.

5. Security, policing, civil liberties, and information control

By 2025, Indonesia’s security governance had moved beyond the fragmented, situational repression that characterized the later Jokowi years and toward a more integrated, legalized architecture of control. Under the Prabowo administration, public order (ketertiban) has been cast as a prerequisite for development, industrial acceleration, and national resilience, particularly in relation to extractive industries, downstreaming, and zones designated as National Strategic Projects (Proyek Strategis Nasional, PSN). In this framework, dissent is increasingly recoded as a risk to stability (stabilitas) and to the continuity of state-led accumulation. Coercion therefore relies less on episodic force than on the routine deployment of criminal law, administrative regulation, and digital governance. Security, in this configuration, no longer functions as a mere emergency response; rather, it operates as a fundamental governing method.

This shift corresponds to what Trissia Wijaya and Kanishka Jayasuriya conceptualize as authoritarian statism: intensified state control over socio-economic life coupled with the retention of democratic formalisms and a narrowing of political channels available to subordinate groups [Wijaya and Jayasuriya 2025, p. 149]. Read this way, the expansion of security governance is driven less by discrete threats than by the structural pressures generated by industrial policy, labour precarity, and mounting strains in social reproduction. This systemic narrowing of political channels functions as a «mode of participation» designed to regulate social contention, utilizing technocratic and consultative ideologies to redefine the boundaries of permissible conflict in the service of elite interests (Rodan 2018, pp. 7-8). The institutional core of this shift toward formalized control lies in the implementation of the Revised Criminal Code (Kitab Undang-Undang Hukum Pidana, as amended by Law No. 1 of 2023), which entered into force in January 2025. Its significance lies less in any single provision than in the state’s growing preference for routing repression through formal legality. Broadly worded clauses concerning hostility toward the state (permusuhan terhadap negara) and defamation of public institutions (penghinaan terhadap lembaga negara) widen the discretionary space available to police and prosecutors. This, in turn, enables what may be described as preventive prosecution: the use of criminal law to deter political contestation before it acquires wider social traction.

Public debate around these provisions often turns on the semantic boundary between criticism (kritik) and insult (penghinaan). One contemporary commentary instead treats the more consequential issue as the asymmetry embedded in enforcement: definitional disputes matter less if those most frequently prosecuted are critics of government policy rather than perpetrators of personal defamation. On this reading, the key distinction lies between statements addressing performance or policy – integral to democratic accountability – and attacks on individual dignity, which may plausibly fall within the scope of civil dispute [Heryanto 2021, 26 June]. A further implication of this legalized order lies in the structural imbalance between state authority and citizens. Public officials and state institutions command extensive communicative resources through ministries, public relations offices, and access to mass and digital amplification, while ordinary citizens do not. In this context, criminalizing speech directed at public authority does not operate as a neutral balancing of expression and reputation. Instead, it consolidates asymmetry by granting elites disproportionate leverage over police and prosecutorial machinery. Seen historically, such provisions echo earlier legal techniques used to discipline hostility toward state power, including colonial-era hate-sowing articles (haatzaai artikelen) introduced in 1914 and later redeployed under authoritarian regimes. Claims that the Revised Criminal Code represents legal decolonisation (dekolonisasi hukum) are therefore difficult to sustain when its practical effect is the reactivation of a modernized instrument for managing political dissent [Heryanto 2021, 26 June].

By mid-2025, civil society organizations documented a growing number of prosecutions against activists opposing land acquisition for PSN projects, particularly in mining and industrial corridors [Mongabay 2024, 26 December]. Courts generally treated these cases as procedural matters, prioritizing statutory compliance over constitutional protections for freedom of assembly (kebebasan berkumpul) () and freedom of expression (kebebasan berekspresi) . The outcome has been a normalization of repression through legality, which shields executive authority from accusations of arbitrariness while narrowing the boundaries of permissible dissent. This legalist securitization gains traction primarily when it is reinforced through everyday policing and the progressive narrowing of civic space (ruang sipil). A public discussion hosted by LP3ES in June 2025 captured this dynamic from the perspective of student movements and civil society actors. Participants repeatedly described a sense of «déjà vu», pointing to restrictions on student mobilization and to a broader pattern in which democratic procedures persist while substantive freedoms contract [LP3ES 2025, 2 June]. The LP3ES discussion also indicates how repression operates through layered mechanisms. In Semarang, as recounted by Nukila Evanty, protest policing involved suspected undercover surveillance, prolonged deployment of water cannon and tear gas, and the charging of students under Articles 333 and 170 of the Criminal Code. This physical coercion was followed by discursive marginalization, as mainstream media framed detainees as disorderly and illegitimate [LP3ES 2025, 2 June]. The sequence illustrates how coercion and narrative management operate together to delegitimize dissent. The forum connected these practices to broader regime dynamics. Bivitri Susanti characterized Indonesia’s political system as procedurally democratic but substantively hollow, invoking competitive authoritarianism to describe a regime that maintains elections while systematically constraining civic action. Zainal Arifin Mochtar’s description of neo-authoritarianism (neo-otoritarianisme), in which repression is channelled through legal cases rather than overt bans, closely matches the legalist turn observed in 2025. These diagnoses point to how fear, legal risk, and reputational damage function as routine deterrents within campuses and civil society [LP3ES 2025, 2 June].

Beyond the disciplining of civic actors, security governance in 2025 has increasingly operated as a form of economic governance, with the Indonesian National Police (Kepolisian Negara Republik Indonesia, Polri) occupying a central position. This operational expansion reflects Polri’s long-standing trajectory as a central actor in the political economy of security, where its institutional independence has historically enabled it to mediate conflicts over state-building and resource access (Baker 2012). Although Constitutional Court Decision No. 114/PUU-XXIII/2025 formally restricted active officers from holding civilian posts, Polri’s operational reach continued to expand in regions hosting PSN and extractive projects. Under the «Presisi» doctrine, territorial presence, intelligence gathering, and digital monitoring are integrated to secure investment sites and manage potential disruption. The designation of mines, smelters, and energy infrastructure as National Vital Objects (Objek Vital Nasional, OVN) institutionalizes this role. The Ministerial Decree of the Ministry of Energy and Mineral Resources (Keputusan Menteri Energi dan Sumber Daya Mineral) No. 385.K/BN.05/MEM.S/2025, issued on 25 November 2025, classified 474 sites across the energy and mineral sector as OVN, providing a formal basis for intensified and routinized security deployment. While the decree frames its purpose in terms of operational continuity and protection from threats, its political implication is that industrial zones are treated primarily as security assets instead of contested social spaces. Once securitized, protest and scrutiny are more readily reframed as disturbances to the national interest (kepentingan nasional) rather than as claims grounded in rights [Keputusan Menteri Energi dan Sumber Daya Mineral 2025, 25 November]. This arrangement aligns with Wijaya and Jayasuriya’s analysis of the deepening economic-security nexus surrounding critical minerals and downstreaming. In this account, policing and coercion are integral to accumulation itself, functioning as mechanisms through which labour flexibilization is enforced, dissent is managed, and investment conditions are stabilized [Wijaya and Jayasuriya 2025, p. 152].

The consolidation of security governance extends from the physical control of industrial sites into the digital domain. The National Data Centre (Pusat Data Nasional, PDN), relaunched following a series of breaches, was presented as a corrective measure intended to strengthen cybersecurity and improve administrative efficiency [Tempo 2025, 26 May]. In practice, PDN enables deeper integration of government datasets across ministries and agencies, expanding the state’s administrative reach. Reporting on the corruption investigation into the Temporary National Data Centre (Pusat Data Nasional Sementara, PDNS) highlights the governance risks created by this consolidation. The interim PDNS arrangement was reported to be inconsistent with Presidential Regulation (Peraturan Presiden) No. 95 of 2018, increasing reliance on private providers even as the broader PDN blueprint seeks to centralize and integrate state data infrastructure [Tempo 2025, 26 May]. Even without imputing intent, data centralization increases the state’s capacity to monitor populations while making lines of responsibility harder to trace. The National Cyber and Crypto Agency (Badan Siber dan Sandi Negara, BSSN) reinforced this trajectory by reporting 3.64 billion cyber incidents between January and July 2025, framing cyberspace as a high-threat domain requiring regulatory expansion [Tempo 2025, 8 August]. These figures were mobilized to justify calls for additional legislation, including the proposed Cybersecurity and Cyber Resilience Bill (Rancangan Undang-Undang Keamanan dan Ketahanan Siber). Cybersecurity thus becomes a platform for expanding discretionary authority over information flows under the banner of national stability.

Complementing this move toward data centralization is the intensification of administrative content governance as a central pillar of information control. Under the continued enforcement of Ministerial Regulation No. 5 of 2020, the Ministry of Communication and Digital Affairs (Kementerian Komunikasi dan Digital, Komdigi) intensified takedown requests, frequently targeting content deemed to disturb public order (meresahkan masyarakat). Unlike judicial censorship, these removals do not require a court ruling and shift the burden of contestation onto users and media outlets. Monitoring by SAFEnet and reporting by Remotivi point to a rise in over-moderation during politically sensitive moments, including the 2024 election period and the August 2025 demonstrations. By October 2025, hundreds of accounts were reported to have been blocked and journalistic content removed, including documentation of police violence and protest demands, under vague categories such as disturbing public order [SAFEnet 2025, 19 June; Remotivi 2025, 5 November]. Independent media outlets, including Tempo, also faced repeated Distributed Denial of Service (DDoS) attacks that coincided with investigative reporting, narrowing the reach of critical journalism during key decision-making periods [Tempo 2025, 12 April].

The overarching effort to consolidate security governance in 2025 has extended beyond immediate policing and information control into the long-term management of historical narrative. The state’s move to professionalise a new national history mirrors earlier historical projects where the production of «official» narratives was used as a pedagogical tool to stabilise the state’s ideological foundations and legitimise its security apparatus (McGregor 2007). This became visible in the state-backed project to rewrite Indonesia’s national history, formally launched in December 2025 under the title Indonesian History: The Dynamics of Nationhood in a Global Context (Sejarah Indonesia: Dinamika Kebangsaan dalam Arus Global). The project, initiated in January 2025 and overseen by the Ministry of Culture, produced 7,958 pages across ten volumes and involved more than one hundred contributors from universities and research institutions [Tempo 2025, 15 December]. Accounts from people involved in the process also describe an institutional pathway that complicates a neat division between «grassroots» professional initiative and state programme: the work was initially driven through the Indonesian Society of Historians (Masyarakat Sejarawan Indonesia, MSI), led by Agus Mulyana, before the initiative became more tightly embedded within the Ministry as he moved into the post of Director of History. The project sits within a broader pattern of governance in which ostensibly professional or civic infrastructures are folded into ministerial authority, giving the state stronger agenda-setting capacity while retaining the legitimating language of expert authorship.

Publicly, the project was framed as an effort to correct colonial bias, strengthen national cohesion, and render history relevant to younger generations. The Minister of Culture emphasized that the work was written by professional historians and subjected to internal review and public discussion, presenting criticism as part of a normal democratic process [Tempo 2025, 15 December]. In official statements, the project was positioned as Indonesia-centric, affirmative (and positive) in tone, and oriented toward national achievement rather than historical grievance. Yet the process and substance of the project quickly became a site of controversy. Civil society groups, historians, and human rights organizations raised concerns that the state-led framing of a official history (sejarah resmi) risked imposing a singular, authoritative interpretation of the past. Critics warned that such an approach could marginalize alternative historical voices, particularly those of victims and survivors of past violence, and reclassify critical historical accounts as deviant or illegitimate. Amnesty International Indonesia, through an online petition endorsed by members of the Alliance for Open Indonesian History (Aliansi Keterbukaan Sejarah Indonesia,AKSI), warned that a state-sponsored official history risks imposing a singular interpretation of the past and marginalizing victims’ accounts, including by sidelining discussion of past gross human rights violations [Amnesty Indonesia 2025].

Opposition to the project intensified through petitions, public statements, and parliamentary hearings. AKSI explicitly rejected the notion that the state holds the authority to fix a final interpretation of national history, stressing that historical writing must remain plural, open to contestation, and accountable to victims of past abuses. The coalition warned that the normalization of an official narrative could function as a form of symbolic closure, discouraging further inquiry into state violence and enabling the sanitization of controversial episodes [Amnesty Indonesia 2025]. Concerns were also raised about the conditions under which the project was produced. Contributors reported compressed timelines, limited transparency in editorial decision-making, and discrepancies between draft discussions and published content. The final volumes were repeatedly delayed – from an initial target of August 2025, to November, and eventually to December – reflecting the strain of producing a comprehensive national history within a six-month window [Tempo 2025, 15 December]. These pressures were particularly acute in Volume 10, covering the post-Reformasi period up to 2024, which required the production of entirely new historical synthesis rather than revision of existing national histories.

The controversy was further sharpened by public statements from the Minister of Culture that appeared to conflict with established documentation, including remarks casting the reported mass sexual violence during the May 1998 riots as unsubstantiated [The Conversation 2025, 18 June]. Such statements deepened concerns that the project’s affirmative tone could override evidentiary standards, even where the institutional history of bodies such as Komnas Perempuan – established in direct response to the 1998 violence – was acknowledged within the volumes themselves [Tempo 2025, 15 December; The Conversation 2025, 18 June]. Within the broader context of security governance, the rewriting of national history can be read as a complementary mode of control. Rather than operating through prohibition or coercion, it works by stabilizing acceptable interpretations of the past and narrowing the discursive space in which historical accountability can be pursued. In this sense, historical narrative management aligns with other legal and administrative techniques discussed in this section: it preserves democratic form while constraining the range of legitimate critique. The politics of memory thus become another site where order is produced – not through force, but through the institutionalization of authorized knowledge. By the end of 2025, Indonesia’s security governance had coalesced around a consistent logic where order (ketertiban) functions as an administrative condition for development, enforced through law, policing, data centralization, and platform regulation. The system relies less on overt violence than on routinized legality, surveillance, and administrative pressure. This configuration may deliver short-term predictability for investors and policymakers, but it narrows the space for democratic contestation by recoding dissent as disruption. Stability in 2025 was maintained through an increasingly institutionalised architecture of control rather than through political incorporation or accommodation.

6. Labour, welfare, and public services: distributive politics in practice

By 2025, Indonesia’s distributive politics had settled into a paternalistic-populist configuration in which welfare provision was framed less as a compensatory safety net than as an instrument for governing labour, markets, and social order. The Prabowo administration recast welfare as an investment in national resilience (ketahanan nasional), embedding social programmes within a command-oriented architecture that prioritised scale, speed, and executive control. Flagship initiatives such as Free Nutritious Meal Programme (Makan Bergizi Gratis, MBG) and Standardised Inpatient Room Class (Kelas Rawat Inap Standar, KRIS) expanded the state’s presence in everyday life while producing labour precarity, distorting local markets, and bypassing established institutions – effects that weakened participatory and redistributive logics. The programme, launched nationally on 6 January 2025, became the centrepiece of this distributive agenda. Officially framed as a long-term human-capital intervention aligned with Indonesia Emas 2045 (Golden Indonesia 2045), MBG was administered by the newly created National Nutrition Agency (Badan Gizi Nasional,BGN) and channelled through thousands of Nutrition Service Units (Satuan Pelayanan Pemenuhan Gizi, SPPG). By late 2025, the government claimed that MBG reached 49 million beneficiaries per day, involved nearly 19,000 small businesses and village cooperatives, and generated 1.5 million jobs, alongside a reported food-poisoning rate of 0.0007 per cent [BBC News Indonesia 2026, 6 January].

Investigative reporting and civil-society monitoring nevertheless indicate a sharp disjuncture between design and practice. Rather than embedding welfare delivery within local economies, MBG operated as a centrally commanded mega-project that bypassed neighbourhood governance and local consultation. Across Bandung, Cirebon, Solo, and other urban and peri-urban settings, residents reported the establishment of SPPG facilities in dense residential areas without formal consultation, written permits, or environmental deliberation. Objections focused on continuous 24-hour operations, noise, waste management, and traffic disruption, concerns that were particularly acute in communities with elderly populations [BBC News Indonesia 2026, 6 January]. Problems of governance were compounded by recurring food-poisoning incidents affecting participating school children. Reporting highlighted multiple cases of mass poisoning linked to uneven hygiene practices, limited supervision, and inconsistent quality control across suppliers and kitchens. These incidents point to an accountability gap within a programme scaled rapidly under central command: operational failure was treated as a technical defect rather than as a problem of oversight and enforceable standards. In this sense, the programme’s claim of a very low poisoning rate sits uneasily alongside accounts of repeated outbreaks and the institutional difficulty of tracing responsibility across a fragmented delivery chain [Project Multatuli 2025, 30 September; BBC News Indonesia 2026, 6 January].

The programme also fell short of its stated aim of local labour absorption. Reported cases show that SPPG kitchens recruited workers – officially designated as volunteers – through personal networks rather than open local recruitment. In Cirebon, only one resident out of 200 households was recruited; in other cases, workers were drawn from outside the neighbourhood altogether. Despite BGN technical guidelines requiring that at least 30 per cent of workers be recruited from local poor households (desil 1 and desil 2), enforcement remained weak [BBC News Indonesia 2026, 6 January]. The labour regime underpinning MBG reveals a central paradox of paternalistic welfare: expanded provision accompanied by intensified precarity. Workers in SPPG kitchens typically laboured eight to thirteen hours per day without written contracts, predictable schedules, or formal training. Wages ranged from Rp 100,000 to Rp 150,000 per day, often paid fortnightly, with overtime either unpaid or capped arbitrarily. In many cases, workers were not enrolled in Employment Social Security (BPJS Ketenagakerjaan), despite official guidelines mandating insurance coverage [BBC News Indonesia 2026, 6 January]. These arrangements created a new stratum of informalised labour embedded within a state programme. As Bhima Yudhistira of the Center of Economic and Law Studies (CELIOS) observed, MBG did not generate genuinely new employment so much as reclassify existing informal labour into state-dependent and highly vulnerable positions, in tension with official claims of large-scale job creation [BBC News Indonesia 2026, 6 January]. Instead of securing livelihoods, social programs fostered vulnerability under the guise of patriotic duty.

This logic of centralised command also reshaped local markets in uneven and destabilising ways. Although BGN guidelines required SPPG kitchens to prioritise village-owned enterprises (Badan Usaha Milik Desa, BUMDes), cooperatives, and local micro-enterprises for procurement, field evidence suggests that fewer than 10 per cent of micro-businesses were meaningfully involved [BBC News Indonesia 2026, 6 January]. Supply chains instead gravitated towards large vendors and intermediaries capable of meeting volume and consistency requirements, often those with personal or political proximity to SPPG operators. The result was a substitution effect that disrupted existing market ecosystems. Traditional market traders, school canteen operators, and small caterers reported sharp declines in demand as school meals were centralised. Vegetable traders in Solo and Bandung described shortages and price spikes as suppliers prioritised SPPG contracts, pushing retail prices upward and limiting access for small vendors. Some shopkeepers reported revenue declines of 20-50 per cent and were forced to lay off workers [BBC News Indonesia 2026, 6 January]. Muhammad Andri Perdana of the Bright Institute characterised MBG as a programme that «damaged markets and welfare» by concentrating economic benefits at the top while distributing only residual gains downward. In this command-based model, economic circulation was expected to flow from politically connected operators rather than be sustained through local exchange [BBC News Indonesia 2026, 6 January].

The resulting economic distortions were further complicated by concerns over patronage and the militarisation of welfare delivery. Findings by Indonesia Corruption Watch (ICW) identified at least 102 MBG-affiliated foundations across 38 provinces with ties to political parties, business elites, bureaucrats, military personnel, police, and campaign networks. These affiliations, ICW argued, turned MBG into a vehicle for project allocation and rent distribution, weakening competence-based selection and oversight – particularly as BGN functioned simultaneously as regulator and executor [BBC News Indonesia 2026, 6 January]. The involvement of security institutions further blurred boundaries between welfare, governance, and coercive authority. By late 2025, the National Police (Polri) and the Indonesian Armed Forces (Tentara Nasional Indonesia, TNI) collectively operated or planned thousands of SPPG units. Parliamentary scrutiny questioned the legal basis for allocating 1,000 SPPG units to Polri alone, underscoring how welfare infrastructure was increasingly embedded within security institutions, not civilian social-policy frameworks [BBC News Indonesia 2026, 6 January]. A parallel logic of managed exit and re-stratification shaped health policy through the implementation of Standardised Inpatient Room Class (Kelas Rawat Inap Standar, KRIS), mandated by Presidential Regulation No. 59 of 2024. KRIS abolished the tiered inpatient class system (Classes I, II, and III) within BPJS Kesehatan (Health Social Security Agency), standardising hospital accommodation in the name of equity. Health Minister Budi Gunadi Sadikin stated that BPJS should focus on lower-income groups, while wealthier patients were expected to rely on private insurance [CNBC Indonesia 2025, 13 November]. Labour organisations sharply contested this approach. Trade unions warned that KRIS would effectively downgrade services for workers previously enrolled in higher classes while accelerating the exit of middle- and upper-income groups to private insurance, potentially undermining BPJS financing through declining cross-subsidisation [DetikFinance 2025, 21 May]. Instead of equalising quality, KRIS risked entrenching a two-tier health system in which formal equality of access masked inequality of outcomes.

This distributive turn in welfare unfolded alongside continuing uncertainty in labour governance, including contestation over how employment protections should be defined, enforced, and adjudicated. One late-2025 marker of this broader conflict was the decision by Indonesian Campus Workers’ Union (Serikat Pekerja Kampus, SPK) to submit a judicial review petition to the Constitutional Court challenging provisions of Law No. 14/2005 on Teachers and Lecturers. Presented by SPK as a test of labour rights and legal protection in the education sector, the petition suggests that distributive disputes under Prabowo have increasingly moved into constitutional litigation, particularly where legislative channels are perceived as unresponsive or exclusionary [Serikat Pekerja Kampus 2025, 26 December]. Within labour debates more broadly, key demands continued to centre on restoring minimum-wage calculations based on Decent Living Needs (Kebutuhan Hidup Layak), reinstating sectoral minimum wages, limiting fixed-term contracts (Perjanjian Kerja Waktu Tertentu, PKWT), restricting outsourcing, and strengthening protections for vulnerable workers. Public commentary on contract labour echoed these concerns. Writing on the contractualization of work, Mustika Prabaningrum Kusumawati argued that inequality is built into fixed-term contracting because employment agreements are typically drafted by employers and structured around a relationship of command, leaving workers with little bargaining power. In a labour market organised around «flexibility», contract workers become easy to hire and easy to fire, denied severance pay and longer-term security while carrying workloads comparable to, and sometimes heavier than, those of permanent employees. In this sense, «flexibility» operates as a transfer of risk from firms to workers, normalising insecurity under a veneer of legal formality [Kusumawati 2025, 1 May]. Against this backdrop, the government’s interim strategy of a 6.5 per cent minimum-wage increase functioned as wage pacification rather than structural reform, deferring distributive conflict rather than addressing its sources.

Distributive politics also extended into the educational sector through an intensified emphasis on STEM (Science, Technology, Engineering, and Mathematics) as the principal vehicle for national competitiveness. Policy messaging and LPDP funding priorities framed education as a pipeline for industrial strategy, particularly in energy, defence, and digital sectors [Firman 2025, 9 July]. By 2026, LPDP planned to allocate up to 80 per cent of scholarships to STEM fields, reinforcing a narrowed conception of educational return [Maulida 2025, 16 September]. Critical interventions from scholars and commentators warned that this instrumental logic marginalised the humanities and social sciences and weakened the cultivation of critical capacities relevant to democratic governance. Indonesia’s tendency to value education primarily for immediate economic utility – shaped by colonial and authoritarian legacies – risked short-term technocratic gains at the expense of longer-term societal resilience [Maulida 2025, 16 September]. These reforms in labour, welfare, and public services clarify the contours of a paternalistic state that offers protection in exchange for compliance. Programmes such as MBG and KRIS expanded the state’s presence in everyday life while consolidating executive control, weakening local participation, and shifting risk on to workers, small traders, and communities. Short-term social peace was secured through visibility, scale, and command, at the cost of labour security, market integrity, and institutional accountability. As fiscal pressures mount towards 2026, the sustainability of this distributive model remains uncertain, particularly as its underlying inequalities continue to generate social friction rather than contain it.

7. Macroeconomy and fiscal policy: growth, inflation, jobs, inequality

Indonesia’s macroeconomic condition in 2025 was shaped less by acceleration than by active management of competing pressures. The year unfolded in a more difficult external setting: weaker global momentum, geopolitical risks with potential spillovers into energy prices and logistics, and a financial environment defined by a strong US dollar alongside expectations that global interest rates would remain higher for longer than previously anticipated. These conditions narrowed the room for manoeuvre for emerging markets and turned “stability” into a policy outcome that had to be produced, rather than a passive inheritance [Hendranata 2025, 24 January]. Against this backdrop, the key domestic tension lay in the gap between political ambition and economic structure. The state signalled readiness to expand programmes designed to sustain demand and bolster social legitimacy, while the underlying growth model showed signs of fatigue. Productivity gains remained limited, the distributional base of consumption became more polarized, and the labour market continued to absorb workers without consistently creating secure, high-productivity employment [LPEM FEB UI 2025].

While a growth rate in the 5 per cent range could still serve as the headline indicator, it should be read as the surface expression of a more fragile configuration. Growth relied increasingly on short-cycle supports and seasonal factors rather than a strengthened structural engine. Projections placing 2025 growth just below 5 per cent reflect the assessment that sustaining the symbolic threshold has become harder without policy assistance and favourable timing effects [LPEM FEB UI 2025]. This reframes resilience as conditional. Household consumption remained the principal driver of growth, yet its composition suggests tightening constraints: discretionary spending appeared thinner, and even periods that historically lifted tertiary consumption generated weaker impetus. The economy was not in collapse, but it operated with a narrowing margin for error [LPEM FEB UI 2025]. The conditional nature of this resilience is closely linked to the global cycle, where external uncertainty defined the domestic cost of capital. Uncertainty was evident in both divergent forecasts for world growth and the risk that geopolitical tensions could disrupt supply chains and reintroduce inflationary pressure through energy and commodity channels [Hendranata 2025, 24 January]. At the same time, the global interest-rate environment remained a binding constraint. If US inflation proved persistent, the pace of monetary easing would slow, sustaining dollar strength and raising the effective cost of capital for emerging markets. Under these conditions, exchange-rate stability became closely linked to domestic price stability and political order [Hendranata 2025, 24 January].

The sensitivity of this political order necessitates a central mechanism of inflation management that relies on administrative control and seasonal supports. Price stability in early 2025 was secured not solely through aggregate demand conditions, but through state intervention in administered prices and seasonal subsidies. Headline inflation remained below target and reached an exceptionally low point in the first quarter, indicating a strong – if time-bound – capacity to suppress visible price pressures [LPEM FEB UI 2025]. The deeper political economy of inflation, however, remained concentrated in food. Even when aggregate inflation was subdued, volatility in basic staples carried disproportionate weight because it was experienced daily and rapidly translated into political discontent. In a context where external shocks could quickly transmit through commodity prices, the state’s capacity to contain food-price volatility functioned as a core element of maintaining political legitimacy [Hendranata 2025, 24 January]. The success of these price interventions must be weighed against a distributional shift visible in the shrinking of the «broad middle class». A more analytically grounded way to discuss the «middle-class squeeze» is to treat it as a shift visible within consumption itself, not as a general impression. Over the longer run, consumption growth has been uneven across the income distribution, with higher percentiles recording stronger gains. In the post-pandemic period, this pattern has become more polarized: the lower segment improves modestly, the top recovers strongly, while the middle of the distribution loses share [LPEM FEB UI 2025]. In political-economic terms, this is a warning sign because the middle functions as a stabilizer of both demand and social expectations. High-frequency indicators point in the same direction. Proxies for lower-middle purchasing power – consumer confidence, retail momentum, credit dynamics, and durable-goods consumption – suggest cumulative pressure rather than episodic weakness. Sustaining aggregate demand through programmes and stimulus may prevent sharp deterioration, but it does not by itself reverse the longer-term thinning of the consumption middle [Hendranata 2025, 24 January].

While household demand shows signs of polarization, the investment landscape and external balance present a complex picture of resilience punctuated by structural leakages. A notable increase in early 2025 investment, including the point at which domestic investment exceeded foreign investment after a period of lag, indicates that pockets of confidence and domestic momentum persisted [LPEM FEB UI 2025]. External accounts likewise present a mixed picture that is analytically richer than a simple «surplus buffer» narrative. A narrowing current-account deficit, supported by an improved trade position, coincided with persistent structural leakages through services and primary-income outflows linked to imports and investment returns. External stability could strengthen even as exposure to shocks transmitted through import dependence, logistics, and investment-related payments remained [LPEM FEB UI 2025]. These structural vulnerabilities become most acute in the fiscal domain, where the burden of debt service compresses the space for developmental expenditure. Plans for substantial new debt financing within the 2026 framework, combined with rising projected interest obligations and concerns over refinancing concentration in the years ahead, point to a tightening constraint. Interest payments increasingly function as an expanding fixed cost that compresses discretionary fiscal space. This is what recasts fiscal credibility as a distributive and developmental issue rather than a question of legal compliance alone [Nugraha 2025, 22 August]. Critiques of the debt trajectory stress that the principal risk lies not in the headline debt ratio by itself, but in repayment capacity, exchange-rate vulnerability, and rollover concentration. The argument that expanded borrowing has not translated into commensurate efficiency gains – illustrated by concerns over persistently weak capital-output dynamics – directs attention to expenditure quality and the growth payoff of debt-financed programmes [Nugraha 2025, 22 August].

The fiscal limits on developmental spending redirect analytical attention to the labour market, which in 2025 remained structurally dual and defined by persistent informality. The economy continued to absorb workers through flexible and scalable forms of work, often outside standard employment protections, while the creation of stable, high-productivity jobs remained limited. As a result, many workers remained exposed to income volatility and weak social security [LPEM FEB UI 2025]. Platform-mediated work provides a crucial lens on this transformation. The expansion of solo self-employment over the past decade, together with a sharp rise in the estimated number of platform workers between 2019 and 2024, indicates that digital platforms have become a major channel of labour absorption. The central issue, however, is not volume but quality. Evidence of declining average earnings relative to pre-pandemic levels, long working hours, safety risks, and ambiguous legal status – workers framed as «partners» not employees – points to a widening gap between labour absorption and standards associated with decent work [Izzati et al. 2025, October]. This gap clarifies why the policy agenda surrounding platform work carries structural significance; it constitutes a test case for whether labour institutions can adapt to new employment forms without entrenching precarity as the default outcome [Izzati et al. 2025, October].

These labour dynamics ensure that inequality and structural poverty cannot be resolved through fiscal transfers alone. Distributional outcomes in 2025 cannot be assessed solely through headline poverty rates or welfare programme coverage. A useful framing is structural poverty: deprivation sustained by unequal access to education, healthcare, secure work, and legal justice, reinforced by institutional bias and limited political voice among vulnerable groups. Welfare expansion may alleviate hardship, but it does not by itself resolve inequality where labour markets remain informal and low-productivity and where access barriers persist. Placed alongside evidence of a shrinking consumption middle and the expansion of insecure work arrangements, this framing helps explain why inequality reduction can remain slow even as the state expands social intervention [LPEM FEB UI 2025; Izzati et al. 2025, October]. In 2025, macroeconomic stability was actively produced through intervention, buffering, and institutional coordination rather than delivered by favourable external conditions. Inflation control relied partly on administrative and seasonal instruments; investment showed measurable momentum; and external balances improved in ways that strengthened short-run resilience. Yet deeper constraints – distributional polarization within consumption, persistent informality, a labour market increasingly shaped by precarious platform work, and a fiscal horizon compressed by rising debt-service obligations – indicate that the stability of 2025 was real but conditional.

8. Energy transition and climate governance: ambition, finance, implementation

In 2025, the administration embedded the energy transition within an energy self-sufficiency programme (swasembada energi), prioritizing domestic control and fiscal manageability over accelerated decarbonization schedules. Executive agenda-setting and sectoral planning mandates reoriented inter-ministerial coordination towards supply expansion, subsidy administration, and investment mobilization. The political-economic effect was a closer alignment between energy governance and coalition management: stabilizing industrial electricity supply and retail fuel prices became a means of sustaining political support while reserving fiscal space for other populist commitments [Syeirazi 2025, 26 August]. This alignment characterizes the energy transition as a top-down project where resource nationalism functions to sustain the patronage networks essential to Indonesia’s contemporary political economy (Warburton 2023, pp. 11-12). This orientation reflected a sharper conceptual distinction that shaped policy choices throughout the year. Energy sovereignty (kedaulatan energi) emphasized state authority over resources, infrastructure, policy autonomy, and technological capacity, whereas energy security (ketahanan energi) centred on availability, affordability, access, and environmental acceptability. The administration explicitly adopted the sovereignty frame as its organizing doctrine, legitimizing stronger state direction over upstream extraction, refining capacity, and grid planning. Institutionally, this choice elevated the role of state-owned enterprises (SOEs), whose balance sheets were treated as primary policy instruments for projects unable to attract concessional international finance [Syeirazi 2025, 26 August]. This institutional choice reflects a strategic preference for statist nationalism in sectors deemed too economically or politically sensitive to be controlled by private domestic actors (Warburton 2023, p. 10).

The structural limits of this sovereignty-led approach were exposed by oil and gas policy, where the self-sufficiency agenda relied on ambitious production targets of one million barrels of oil per day and 12 billion standard cubic feet of gas per day by 2030. The political-economic problem lay in credibility: long-term declines in output and proven reserves raised the cost of meeting targets through domestic lifting, intensifying pressure to revise fiscal terms and streamline licensing. The state thus confronted a trade-off between politically sensitive import dependence and institutionally demanding reforms to state take, contract stability, and permitting procedures [Syeirazi 2025, 26 August; Undang-Undang No. 22/2001]. These production constraints heightened the strategic importance of subsidy governance. Energy subsidies remained a central instrument of macroeconomic stability, yet open-price mechanisms produced substantial leakage to non-target groups and reinforced the competitiveness of fossil fuels relative to renewables. Efforts to recalibrate this system depended on the National Integrated Socioeconomic Data system (Data Tunggal Sosial Ekonomi Nasional), designated as the reference registry for targeted transfers, including energy subsidies. The political-economic consequence was straightforward: without reliable targeting, the state remained locked into recurrent subsidy and compensation expenditures, constraining fiscal capacity for grid upgrades, renewable deployment, and managed coal retirement.

Beyond the challenges of domestic price management, transition finance constituted a second binding constraint. In 2025, the government integrated international platforms, notably the Just Energy Transition Partnership, alongside domestic instruments such as climate budget tagging and green sovereign Islamic bonds (green sukuk). Implementation, however, was marked by uncertainty. Complex access requirements and unpredictable international disbursement schedules encouraged a preference for instruments deployable through domestic fiscal channels and SOEs. This shift strengthened the Ministry of Finance’s role, as tax incentives, customs facilities, and blended-finance arrangements became the principal tools for maintaining project bankability under limited concessional support [Abidin 2025, 26 January]. The reliance on domestic regulatory and fiscal tools also shaped the renewable electricity strategy, which relied heavily on inducements aimed at improving project economics and reducing procurement risk for PLN. Presidential Regulation No. 112/2022 established a national framework for pricing and procurement, shaping contractual terms and revenue expectations for developers. The institutional effect was a more centralized transition pathway in which large, utility-scale projects aligned with PLN’s planning priorities were favoured over decentralized solutions dependent on distribution-level flexibility and local permitting. This configuration reflected the administration’s broader preference for controlled infrastructure delivery through state-linked actors. This focus on supply-side infrastructure was complemented by electric mobility policy, which functioned as a demand-side instrument while introducing new fiscal and administrative trade-offs. Presidential Regulation No. 79/2023 expanded the regulatory framework for electric vehicle development, and Ministry of Industry Regulation No. 6/2023 formalized direct government assistance for two-wheeled battery electric vehicle purchases. Together, these measures embedded consumer subsidies and industrial incentives as scaling mechanisms. The political-economic outcome mirrored the wider transition strategy: targeted spending and regulatory preference were used to build domestic markets, at the cost of increased fiscal exposure and monitoring requirements.

While mobility policy addressed end-use shifts, carbon capture and storage – including carbon capture, utilization, and storage (CCS/CCUS) – assumed a prominent role as a designated «bridge» technology for existing industrial assets. Presidential Regulation No. 14/2024 provided a governance framework covering licensing arrangements and designated storage zones, including offshore sites. This expanded state capacity to coordinate CCS/CCUS projects, yet the political-economic implications remained contested. Proponents framed the technology as a means of sustaining fossil-linked industrial activity within an emissions-management framework, while critics pointed to high costs, operational risks, and limited global performance, warning that public resources could be diverted from scalable renewables and community-based energy systems [Hariandja 2024, 8 August]. The attempt to manage emissions while maintaining a commodity-based industrial strategy was further illustrated by bioenergy governance. Biodiesel expansion depended on palm oil fund management and export levy structures. Presidential Regulation No. 132/2024 broadened the mandate of the plantation fund agency, provoking concern among smallholders over governance dilution and access barriers. In 2025, adjustments to export levy rates under Ministry of Finance Regulation No. 30/2025 reshaped the revenue base supporting downstream and biofuel programmes. The resulting political-economic configuration combined fiscal dependence with distributional tension: levy-financed funds underwrote biodiesel expansion, while smallholders faced administrative hurdles and uncertainty over fund allocation priorities [Saputra 2025, 17 January].Overall, the 2025 energy transition followed a state-centred logic in which self-sufficiency functioned as the operational benchmark for political durability. Subsidy regimes, SOE-led investment, and rule-based inducements under presidential regulations formed the institutional core. The central tension lay in implementation: extensive fiscal commitments to price stability limited the state’s capacity to accelerate decarbonization, increasing reliance on bridge technologies and levy-funded bioenergy schemes. This configuration reinforced executive steering over the transition while heightening long-term credibility risks if regulatory designs yield modest emissions reductions, sustained fiscal exposure, or escalating public contestation over land use and fund governance [Syeirazi 2025, 26 August; Abidin 2025, 26 January].

9. Environment, land, disasters: the political economy of risk

Indonesia’s disaster governance framework is anchored in Law No. 24/2007 on Disaster Management, which defines disasters broadly to include natural, non-natural, and social causes and explicitly links disaster management to development policies that generate risk [Undang-Undang No. 24/2007]. The law assigns the state responsibility for emergency response, prevention, and land-use decisions that produce vulnerability. In practice, however, disaster governance in 2025 operated through a narrowly reactive fiscal mechanism focused on emergency response rather than structural risk reduction. The Ready-to-Use Fund (Dana Siap Pakai, DSP) illustrates this orientation. The fund is permanently reserved under the authority of the National Disaster Management Agency (Badan Nasional Penanggulangan Bencana, BNPB) and can be deployed once disaster status is declared by executive decision [BNPB n.d.]. Access to DSP resources depends on formal emergency declarations by provincial governments, creating an administrative incentive to treat disasters as episodic events rather than cumulative outcomes of policy choices. As a result, the fiscal architecture privileges speed and flexibility over adequacy, while upstream land-use governance remains largely unaffected. This legal and fiscal arrangement sustains a governance model in which disaster response substitutes for environmental regulation. Emergency financing absorbs political pressure in the immediate aftermath, while development policies that intensify hydrometeorological risk continue without structural adjustment.

The limits of this reactive model were exposed with particular severity during the floods and landslides that struck Aceh, West Sumatra, and North Sumatra from late November 2025. In West Sumatra, provincial authorities declared a two-week emergency status to unlock administrative flexibility and gain access to DSP support, citing the need to bypass licensing and coordination bottlenecks [Kompas 2025, 26 November]. The declaration activated a standardised emergency command structure, logistical mobilisation, and inter-agency coordination involving regional disaster agencies, public works offices, and security forces. The scale of destruction quickly exceeded available fiscal instruments. By early January 2026, official data recorded at least 1,177 fatalities and 148 missing persons across the three provinces, alongside damage to more than 178,000 housing units [Katadata Databoks 2026, 5 January]. BNPB estimates placed recovery and reconstruction needs far beyond existing emergency reserves, confirming that DSP coverage addressed only a small share of actual losses. The disparity between legally mandated state responsibility and effective fiscal capacity resulted in prolonged displacement, delayed reconstruction, and heightened rural precarity. The political effect of this mismatch lay in its distributional consequences; emergency funds stabilised provincial administrations and preserved administrative authority, yet they offered limited protection to affected households facing long-term income loss, land dispossession, and social vulnerability.

The catastrophic impact of these events highlights a deeper structural issue: the role of legalised deforestation in the production of disaster risk. Post-disaster investigations indicated that the severity of flooding correlated closely with long-term forest conversion in upstream watersheds. Reporting documented extensive deforestation within licensed concessions, particularly in North Sumatra’s Batang Toru watershed, where industrial forestry, mining, and energy projects have altered hydrological systems over decades [BBC Indonesia 2025, 30 December]. Satellite imagery showed large-scale forest clearing on steep slopes, sediment accumulation, and disrupted river systems directly upstream from flood-impact zones. These findings underscored a central feature of Indonesia’s environmental political economy: the predominance of legal deforestation. State-sanctioned land conversion for plantations, pulpwood, mining, and infrastructure has proceeded under valid permits, spatial plans, and environmental approvals. Enforcement agencies have demonstrated capacity to pursue small-scale illegal activities while systematically tolerating large-scale forest loss embedded in national development priorities. The designation of industrial sites as Vital National Objects has further insulated extractive projects from regulatory intervention. Environmental safeguards are subordinated to production continuity, transforming ecological risk into an externality borne by downstream communities.

Faced with mounting public pressure following these disasters, the government has turned toward post-disaster legalism and a framework of selective accountability. The government activated a post-disaster enforcement framework through the Forest Area Control Task Force (Satgas Penertiban Kawasan Hutan), established by Presidential Regulation No. 5/2025. By January 2026, the task force announced investigations into at least twelve corporations suspected of contributing to ecological damage in Sumatra, with potential administrative and criminal sanctions under the Forestry Law [Kompas 2026, 8 January]. This enforcement surge marked a turn toward legalist securitisation. Environmental harm became framed as a matter for prosecutorial coordination led by defence, law-enforcement, and security institutions. While the task force collected evidence and imposed temporary suspensions, civil society organisations raised concerns about its structural orientation. Environmental groups reported cases in which sealed or seized concessions were subsequently transferred to state-linked enterprises without transparent legal basis, environmental reassessment, or community consent [WALHI 2025a]. The mechanism prioritised asset recovery and state control over ecological restoration or community rights. Accountability centred on operators, while the permitting authorities and planning decisions that enabled risk accumulation remained intact.

This surge in enforcement has been matched by an intensification of environmental audits and spatial planning reviews, a process that has paradoxically introduced a significant degree of procedural drift. The Ministry of Environment initiated large-scale environmental audits and reviews of spatial plans in affected provinces, examining alignment between provincial spatial plans and Strategic Environmental Assessments and auditing environmental approvals for more than one hundred firms [Adiningsih 2026]. The reviews formally acknowledged anthropogenic drivers of disaster, including deforestation, land conversion, and cumulative licensing failures. However, the projected duration of these audits, extending well beyond one year, introduced procedural drift. While reviews progressed, extractive activities largely continued, and affected communities absorbed ongoing losses. The burden of proof remained uneven, with communities expected to document harm and tenure claims that the state had historically failed to formalise. Environmental governance thus entered a recursive cycle: disasters prompted audits; audits delayed enforcement; delays preserved existing land-use regimes.

While the crisis in Sumatra exposes the consequences of historical land-use decisions, the frontier expansion in eastern Indonesia illustrates the forward trajectory of land policy and the increasing militarisation of the frontier. The Merauke Food Estate, designated as a National Strategic Project, accelerated forest conversion on an unprecedented scale in Papua. Government approvals authorised the release of hundreds of thousands of hectares of forest for industrial agriculture, bioenergy, and infrastructure in the name of food and energy sovereignty [Adiningsih 2025]. The project relied on administrative land-acquisition mechanisms that marginalised indigenous land rights and bypassed free, prior, and informed consent procedures. Military units were formally integrated into implementation, reinforcing a model in which land conversion, security operations, and development planning became institutionally intertwined. The expansion of military involvement blurred civilian-security boundaries and normalised coercive land governance. The political-economic implication is explicit: ecological risk and social displacement are treated as acceptable costs within a frontier development strategy that prioritizes territorial control, industrial output, and state authority.

The structural deficiencies of state governance are most acutely visible at the household level, where the failure of official disaster response necessitates community-level substitution. In Aceh Tamiang, residents endured prolonged isolation without formal assistance, relying on improvised shelter, shared resources, and informal solidarity networks [Ramadhani 2025]. These accounts point to resilience as forced self-provision in the absence of timely state support, rather than as an indicator of policy effectiveness. Such episodes highlight the distributive logic of Indonesia’s disaster regime: emergency funds stabilise institutions, while communities absorb risk. Solidarity substitutes for welfare, and the structural drivers of disaster remain unresolved. The totality of these dynamics suggests that the political economy of risk has become a consolidated feature of the Indonesian state. The disaster cycle of 2025 shows that Indonesia’s environmental governance operates through a configuration in which extractive development generates vulnerability, emergency financing manages immediate fallout, and post-disaster legalism reallocates blame without altering underlying incentives. This configuration delivers short-term fiscal and political stability while steadily eroding ecological resilience and social security. As Indonesia moves into 2026, disaster risk has become a baseline condition of governance rather than an exception. Without a reorientation of land-use authority, licensing regimes, and fiscal priorities, the state’s capacity to respond will continue to fall behind the scale of risks it actively produces.

10. Digital governance and the media ecosystem

By late 2025, Indonesia’s digital governance had consolidated into a layered system combining formal legal enforcement, administrative moderation, and informal coercive pressure. The Prabowo administration articulated this architecture through the doctrine of digital sovereignty (kedaulatan digital), explicitly linking information control to national economic resilience and public order. In practice, this framework reconfigured relations between the state, digital platforms, journalists, and citizens by constraining adversarial expression while enlarging the discretionary authority of security and regulatory institutions. The enforcement of this doctrine relies heavily on the use of criminal law as an instrument of digital discipline, a trend exemplified by the prosecution of Laras Faizati, a young activist targeted over her social media posts. In December 2025, prosecutors sought a one-year prison sentence against Laras for social media posts responding to the death of Affan Kurniawan [Salam 2025]. Affan, an app-based delivery worker, died after being struck and run over by a police armoured vehicle during the August protests [Tirto 2025, 29 August]. The indictment drew on incitement provisions in the Criminal Code, particularly Article 161(1), together with elements of the Electronic Information and Transactions Law (UU ITE), recasting emotional and critical online expression as a threat to public order [Salam 2025].

The case points to a broader pattern of legalist securitization. Rather than relying on emergency decrees or overt censorship, the state increasingly deploys routine criminal prosecution to discipline digital speech. The relatively short sentence demanded indicated prosecutorial uncertainty, yet the decision to proceed to trial imposed significant punitive costs through detention, reputational harm, and prolonged legal uncertainty. Deterrence operated through procedure rather than conviction, with the criminal justice process itself functioning as a warning about the limits of permissible criticism. Civil society organizations consistently characterized this pattern as criminalization rather than law enforcement. Amicus curiae submissions argued that criticism of state institutions does not meet the legal threshold for hate speech or incitement under domestic law or international human rights standards, particularly Article ١٩ of the International Covenant on Civil and Political Rights [LBH Jakarta ٢٠٢٥; LBH APIK ٢٠٢٥]. The continuation of proceedings, despite intervention requests from the Police Reform Acceleration Commission, underscored that prosecutorial discretion remained aligned with security priorities rather than rights protection.

Beyond the formal legal realm, the climate of digital governance in 2025 was further defined by a marked escalation in informal coercion and the politics of intimidation targeting journalists, activists, and content creators. These practices included doxing, cyberattacks, symbolic threats, and physical intimidation. The terror campaign against Tempo’s newsroom in March 2025, involving the delivery of severed animal heads followed by online threats, marked a shift from digital harassment to physical-symbolic violence [Tempo 2025, 28 March]. Despite formal police reports, investigations remained inconclusive by the end of the year, reinforcing perceptions of impunity. Comparable dynamics emerged in attacks on investigative journalists reporting on environmental violations and National Strategic Projects. In August 2025, journalists covering a government inspection at a smelter facility in Banten were assaulted by individuals identified as security personnel, directly obstructing journalistic work protected under the Press Law [KKJ 2025]. The absence of swift accountability converted these incidents into an implicit enforcement mechanism, discouraging investigative reporting in industrial and security-sensitive locations.

Doxing became a particularly effective instrument within this coercive environment. In January 2025, Indonesia Corruption Watch reported coordinated doxing attacks against one of its researchers following public criticism of elite corruption, including the circulation of personal identification data and location tracking [ICW and TAUD 2025]. These attacks exposed weaknesses in data protection enforcement and highlighted the consequences of delaying the establishment of an independent Personal Data Protection Authority. The result was a climate of anticipatory compliance, in which critics moderated their speech to limit personal risk. The systemic nature of this intimidation is most acutely revealed in the gendered dimensions of digital repression and the targeting of women journalists. The targeting of Francisca Christy Rosana and other women journalists relied on symbolic violence that exploited social norms around gender and vulnerability. The National Commission on Violence Against Women identified these attacks as forms of proxy intimidation, intended to silence wider journalistic networks by treating women as perceived pressure points [Komnas Perempuan 2025]. This pattern carried structural consequences for media diversity and labour conditions. Women journalists faced heightened exit pressures from investigative reporting, reinforcing newsroom hierarchies and weakening institutional capacity for sustained scrutiny. The state benefited indirectly from this attrition, as critical reporting diminished without the need for formal censorship orders.

These direct forms of pressure are increasingly supplemented by administrative moderation as a parallel channel of information control through platform governance. Content takedown requests under ministerial regulations governing electronic system operators expanded during 2025, increasingly targeting material framed as disruptive to public order or economic stability. Although these mechanisms operated outside the judicial process, enforcement depended on licensing regimes and market access, encouraging platforms to comply in advance. This logic became visible during and after the August protests, when journalists reported pressure to avoid live broadcasting and to frame coverage in «cool» or «calming» terms that diverged from conditions on the ground [AJI 2025]. These interventions relied less on explicit bans than on informal directives and the threat of administrative sanctions. The result was a distortion of information flows, pushing audiences towards unverified social media sources and heightening disinformation risks. These various mechanisms of discipline and control are ultimately synthesized into an economic-security doctrine presented by state officials as digital sovereignty. Official statements from the Ministry of Communication and Digital Affairs framed data control, infrastructure consolidation, and platform regulation as prerequisites for economic independence and stability [Ministry of Communication and Digital Affairs 2024]. This doctrine legitimized expansive state authority over digital infrastructure while subordinating civil liberties to macroeconomic and security objectives. The outcome was a managed public sphere in which criticism remained formally lawful yet materially risky. Legal prosecution, informal intimidation, administrative moderation, and investigative inertia operated together to narrow the range of viable public expression. Dissent persisted, but in fragmented and individualized forms that raised participation costs and weakened collective mobilization.

At the same time, the state’s effort to discipline digital discourse confronts an information environment that is more fragmented than in earlier periods. Younger, digitally literate Indonesians, particularly urban and foreign-educated cohorts, increasingly access political commentary through independent explainer media, podcasts, and trans-platform news formats operating outside official channels. Platforms such as What Is Up Indonesia (WIUI) [‘What Is Up Indonesia’ n.d.], which translate domestic political developments into English-language, youth-oriented formats, illustrate how interpretation of state policy circulates beyond conventional media hierarchies. This dynamic complicates the state’s attempt to monopolise narrative control. The effect is a more uneven information order: while legal and administrative controls raise the cost of dissent, they do not fully contain how political meaning is produced, shared, and contested across generational and linguistic divides.

By the end of 2025, Indonesia’s digital governance reflected a consolidated system of control blending law, bureaucracy, and coercion. The Laras Faizati case, unresolved terror against media institutions, escalating doxing, and sustained pressure on journalists during mass protests pointed to a stable model of legalist repression. Blanket censorship was unnecessary; selective enforcement and tolerated intimidation achieved comparable effects at lower political cost. As Indonesia entered 2026, the durability of this configuration hinged on two unresolved variables: whether impunity for digital intimidation would persist, and whether an independent data protection authority would be established with genuine enforcement capacity. In the absence of such counterweights, digital sovereignty risked becoming a standing rationale for the structural erosion of media freedom and civic participation.

11. Foreign policy and regional strategy: hedging under new leadership

In 2025, Indonesia’s foreign policy departed from the restrained, domestically anchored pragmatism associated with the late Jokowi period and moved towards a more personalized and assertive form of executive-led diplomacy. Under President Prabowo Subianto, the doctrine of «free and active» (bebas aktif) has been reoriented into a strategy of hedging that accepts ambiguity and elevated risk when these appear to advance short-term economic or security objectives. This shift has exposed structural vulnerabilities within the Ministry of Foreign Affairs (Kementerian Luar Negeri, Kemlu), which has been increasingly sidelined by an activist presidential palace and a diplomatic apparatus organized around political loyalty. This personalized and assertive diplomatic style is underpinned by a consequential concentration of foreign policy decision-making within the president’s inner circle, effectively marginalizing the professional diplomatic corps at Pejambon.

Although Kemlu remains the formal locus of Indonesia’s diplomacy, its role has narrowed from strategic formulation to downstream coordination, tasked primarily with translating presidential initiatives into administratively workable positions. This shift was crystallized by the appointment of Sugiono as foreign minister. As Jefferson Ng observes, Sugiono’s standing as a senior loyalist from the president’s Gerindra Party positions him less as an autonomous policy actor than as a political synchronizer, charged with ensuring bureaucratic alignment with the administration’s «Red and White» agenda rather than providing professionally mediated strategic advice [Ng 2025, 27 December]. This institutional reconfiguration has produced a diplomatic style that frequently outpaces internal coordination. Several prominent initiatives in 2025, including proposals related to the evacuation of Gazan civilians and Indonesia’s move to join BRICS, were driven directly from the palace with limited evidence of comprehensive fiscal, legal, or diplomatic assessment. The absence of a robust internal staffing process to scrutinize presidential initiatives has generated a pattern of policy drift, in which expansive narratives of Global South leadership sit uneasily with the technical constraints of international law and trade economics [Basuki 2025, 22 September]. The clearest indication of Kemlu’s diminished influence and the hazards of unmediated presidential diplomacy emerged from the controversy surrounding the November 2024 Indonesia-China Joint Statement and its repercussions throughout 2025. During President Prabowo Subianto’s visit to Beijing, Indonesia agreed to pursue «joint development» in areas described as involving «overlapping claims». This formulation departed from Indonesia’s long-standing diplomatic position, which has consistently rejected the existence of overlapping maritime claims with China’s «nine-dash line», grounding its stance in the 1982 United Nations Convention on the Law of the Sea (UNCLOS).

At the strategic level, this language constituted a significant concession. By acknowledging «overlapping claims», Jakarta opened discursive space for Beijing’s historical assertions and enabled China to frame the agreement as implicit validation of its South China Sea narrative [Firdaus 2024, 13 November]. Analysts described the episode as a diplomatic gain for China, achieved without formal alteration of Indonesia’s legal position but carrying substantial symbolic weight [Darmawan 2025, 19 May]. Kemlu’s subsequent clarification, which asserted that the joint statement did not amount to recognition of China’s claims, failed to contain the damage. Once such language enters an official bilateral document, subsequent reinterpretation cannot fully retract the political and legal signals already conveyed [Basundoro 2025]. The episode points to a broader shift in foreign policy practice: strategic ambiguity has been deployed as a transactional instrument, with sovereignty-related language treated as negotiable in return for economic incentives and large-scale investment commitments. At the regional level, this approach risks eroding Indonesia’s credibility among ASEAN partners that are direct claimants in the South China Sea disputes. More fundamentally, it illustrates how presidential diplomacy, operating with limited institutional mediation, has begun to displace the caution and consistency that previously underpinned Indonesia’s maritime posture.

12. Conclusion: scenarios and signposts

As Indonesia enters 2026, the Prabowo administration has moved beyond its initial post-inauguration phase into a period shaped by the material consequences of its «Red and White» nationalist agenda. The central analytical problem is the durability of a governing model that has favoured expansive populist programmes and executive centralization at the expense of fiscal caution and procedural restraint. The question is no longer one of political intent, but of structural capacity. As flagship policies shift from announcement to implementation, the administration faces a tipping point at which its 8 per cent growth ambition must confront a global economy marked by volatile trade patterns and the accumulating costs of domestic distributive commitments.

One plausible trajectory for 2026 is the consolidation of the «Red and White» state, a scenario in which flagship initiatives are stabilized and embedded within the administrative machinery of government. The  Free Nutritious Meal programme remains the central test case; for 2026, the government has raised the programme’s allocation to approximately Rp 335 trillion, with a stated target of reaching more than 80 million beneficiaries [CNN Indonesia 2025, 15 August]. The viability of this trajectory rests on whether the newly established Badan Gizi Nasional (BGN) can demonstrate administrative competence proportionate to the scale of its fiscal mandate. This social expansion is intended to be underwritten by the operational maturation of Danantara, which by early 2026 is expected to move beyond the institutional rebranding of its inaugural year and begin managing its initial investment portfolio. The anticipated “Danantara effect” depends on its capacity to extract substantial returns from state-owned enterprises in support of the administration’s development agenda [Jakarta Post 2025, 8 May]. If Danantara succeeds in generating the targeted USD 50 billion in annual dividends without weakening SOE balance sheets, it would provide a powerful off-budget financing channel, enabling continued support for strategic projects, including the Merauke Food Estate, while preserving formal compliance with the statutory budget deficit ceiling.

A second, and arguably more probable, trajectory is one of fiscal and administrative exhaustion, where the internal tensions of the expanded cabinet structure and programme-heavy agenda become increasingly difficult to manage. The 2026 State Budget (APBN) sets a deficit target of 2.68 per cent of GDP, leaving limited margin for fiscal slippage [MUC Consulting 2025, 24 September]. The principal vulnerability lies on the revenue side; government projections assume revenue growth of 9.8 per cent over 2025, a target widely described as ambitious given subdued commodity prices and the likely dampening effect of the 12 per cent Value Added Tax (PPN) on domestic consumption [Brights Institute 2025, 19 August]. This risk is compounded by the administration’s explicitly pro-growth fiscal stance, with signals from Finance Minister Purbaya Yudhi Sadewa suggesting a willingness to relax the discipline that characterized fiscal management in the previous decade. If growth targets of 5.4 per cent are prioritized over debt sustainability, the likelihood of fiscal slippage increases. Debt-service obligations, projected to absorb close to 16 per cent of total expenditure in 2026, further constrain fiscal room for productive investment [Brights Institute 2025, 19 August]. Under these conditions, the government may be forced to choose between scaling back populist commitments or breaching the statutory 3 per cent deficit limit – an outcome likely to unsettle financial markets and weaken Indonesia’s fiscal credibility.

A decisive signpost for 2026 remains the institutionalization of dissent through the implementation of the revised Criminal Code (Kitab Undang-Undang Hukum Pidana, KUHP), which became fully operational in January. Patterns of enforcement under provisions relating to the defamation of state institutions and hostility against the state will serve as a key indicator of the regime’s tolerance for political contestation. A rise in routine prosecutions of activists and critics would suggest that the process of legalist securitization identified earlier has reached a mature phase, in which adversarial politics is reframed as a threat to national resilience. These constraints on democratic space are reinforced by proposals to revise the General Elections Law, particularly initiatives aimed at further centralizing electoral management or limiting judicial intervention in regional electoral disputes. Moves in this direction would mark a departure from the decentralized settlement of the Reformasi era and consolidate a more top-down democratic model aligned with the interests of the national governing coalition.

The year 2026 will also serve as a multi-alignment test, being the first full year of Indonesia’s BRICS membership. This provides an early trial of Prabowo’s effort to pursue growth-oriented diplomacy while maintaining Indonesia’s long-standing “free and active” posture. Deng Huiru and Alexander R. Arifianto note that Prabowo confirmed full BRICS membership early in his presidency, with potential access to the New Development Bank offering an additional source of infrastructure and development finance perceived as less politically conditional than Western alternatives [Deng and Arifianto 2025, 4-5]. At the same time, they caution that BRICS membership carries geopolitical risks, as Western governments may interpret the move as a shift away from non-alignment amid intensifying great-power competition. The practical issue for 2026 is whether Indonesia’s strategy of “multi-alignment” remains a credible balancing act or begins to resemble a transactional tilt driven by short-term economic considerations. The same RSIS analysis warns that an economy-first diplomatic posture risks eroding Indonesia’s traditional hedging strategy and could complicate relations with the United States [Deng and Arifianto 2025]. For observers tracking Indonesia’s parallel ambitions to accede to the OECD, the implication is clear: if BRICS-related financial and diplomatic choices are read externally as repositioning against the liberal international order, political support for the OECD track may weaken even before technical compliance becomes the main obstacle. The decisive signposts in 2026 will therefore lie in concrete trade-offs – specifically, how far alternative financing and strategic partnerships can expand without provoking retaliatory pressure from major Western partners.

The outlook for 2026 suggests that the Prabowo administration has constructed a governing model calibrated for high growth and tight political control. While this configuration delivered a measure of stability in 2025, the fiscal, environmental, and institutional pressures of 2026 are likely to be more exacting. The «Red and White» project has moved beyond campaign rhetoric into a costly governing reality that demands sustained administrative precision and favourable fiscal conditions – an alignment rarely maintained over time in Indonesia. Whether the administration achieves a consolidated transition or encounters a fiscal and administrative wall will depend on its ability to align nationalist ambition with material constraints. The key signposts are identifiable: the budget deficit, the performance of Danantara’s dividends, and patterns of enforcement under the KUHP. In 2026, the «Red and White» model will face its first serious test of endurance, determining whether Indonesia’s new trajectory represents a durable path towards resilience or an expansion that conceals deepening structural vulnerabilities.

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The Conversation, 2025, 18 June, ‘Fadli Zon menyangkal pemerkosaan massal 1998: Revisi sejarah picu kemarahan publik’ (Fadli Zon denies the 1998 mass rapes: Historical revision sparks public anger). https://theconversation.com/fadli-zon-menyangkal-pemerkosaan-massal-1998-revisi-sejarah-picu-kemarahan-publik-259082

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