A New Era for Indonesia: An In-Depth Look at the Inauguration of President Prabowo Subianto and Vice President Gibran Rakabuming Raka

By Dandy Satriatama

On October 20, 2024, Indonesia witnessed a historic transition of leadership with the inauguration of Prabowo Subianto and Gibran Rakabuming Raka as the country’s President and Vice President. This new administration, backed by a decisive 58% of the national vote, reflects a mandate for continuity and transformation. With ambitious targets, strategic cabinet appointments, and a keen focus on economic and digital growth, Prabowo’s leadership is expected to make significant waves, not only in Indonesia but across the Southeast Asian region.

The Inauguration and Key Messages from President Prabowo

The inauguration ceremony, held at the House of Parliament, was attended by prominent leaders from Indonesia’s neighboring countries and strategic partners worldwide. In a surprising move, Prabowo delivered his speech without a script, personally acknowledging the global leaders present, which conveyed his commitment to fostering strong international relations.

Prabowo’s inaugural speech laid out a forward-looking vision for Indonesia. He paid homage to his predecessors, thanking them for their contributions to Indonesia’s resilience on the regional and global stage. He specifically acknowledged Megawati Soekarnoputri for her leadership during the post-1998 economic crisis and Susilo Bambang Yudhoyono for his crisis management during the 2004 tsunami. Most notably, he expressed his intention to continue Joko Widodo’s policies on industrializing natural resources, focusing on value-added processing instead of raw exportation.

Prabowo’s policy agenda for the coming years includes ambitious goals such as achieving 8% economic growth, establishing food security, enhancing education with free meals for schoolchildren, and directing targeted subsidies to support low-income families. Through these initiatives, he aims to bolster domestic self-sufficiency while building stronger ties with international partners. This focus on local resilience and international cooperation reflects Prabowo’s pragmatic approach to positioning Indonesia as a formidable player in the global economy.

Strategic Cabinet Choices: Continuity and Change

Following the inauguration, Prabowo announced his cabinet lineup, which reflected a combination of continuity from the previous administration and calculated changes to address the evolving needs of the country. Notably, he appointed seven coordinating ministers and 41 other ministers, with some familiar faces from the previous administration retained in key roles. By building a cabinet that includes leaders from various political and social factions, Prabowo aims to maintain a stable coalition, ensuring smooth governance and broad-based support for his policies.

Finance Minister Sri Mulyani remains in her role, signaling continuity and stability in Indonesia’s fiscal approach. Renowned for her international expertise and strong relationships with global finance leaders, her reappointment aligns with President Prabowo’s ambitious economic growth goals. Despite initial indications of reluctance, her continued presence is seen as a stabilizing force, crucial for managing fiscal challenges and executing Prabowo’s economic agenda.

A notable change accompanies her reappointment: the finance ministry now reports directly to President Prabowo, bypassing the coordinating ministry for economic affairs. This shift in the command chain reflects Prabowo’s intent to closely oversee fiscal policy, underscoring the strategic importance of finance in his administration’s priorities.

Meutya Hafid’s appointment as the new Minister of Communication and Digital signals a fresh approach to Indonesia’s digital future. By renaming the Ministry of Communication and Informatics to the Ministry of Communication and Digital, President Prabowo is clearly emphasizing the importance of embracing digital transformation. With her background as a respected journalist and experienced policymaker, Meutya is expected to blend communication policies with the latest in digital innovation, focusing on areas like cybersecurity, data protection, and tech-driven economic growth.

Her leadership will likely bring a more collaborative approach, especially with the private sector, to boost Indonesia’s presence in the digital economy. The ministry’s new name reflects a shift towards prioritizing digitalization, with plans to align Indonesia’s tech regulations with global data protection and cybersecurity standards. By fostering strong partnerships between the public and private sectors, Meutya aims to create a thriving environment for innovation and help local businesses tap into new digital opportunities.

In one of their first major moves, Prabowo and Meutya have already taken steps to clean up the digital space by tackling illegal online gambling. Since the administration’s inauguration, they’ve closed down 187,000 gambling websites and arrested several KOMDIGI employees involved in protecting these sites. This swift action highlights the administration’s commitment to creating a safer, more secure digital environment in Indonesia, setting the stage for a stronger and more resilient digital economy. 

Trade Minister Budi Santoso, a seasoned career official with deep expertise in export management, is expected to spearhead efforts to boost Indonesia’s exports. His focus will be on leveraging the country’s abundant natural resources and promoting digital and creative economy products. Budi’s appointment aligns with President Prabowo’s vision of enhancing Indonesia’s global trade standing by fostering a favorable environment for exports and strategically managing imports to support domestic industries.

With his strong background in export management, the new Trade Minister is likely to implement policies that capitalize on Indonesia’s rich resources, drive the growth of creative economy sectors, and expand e-commerce. By introducing selective import regulations and initiatives to enhance exports, Prabowo’s administration aims to balance domestic priorities with international trade objectives, solidifying Indonesia’s role as a vital trade partner within Southeast Asia. 

The “Fat” Cabinet: Opportunities and Challenges for Businesses

Prabowo’s decision to expand the cabinet has garnered mixed reactions. The enlarged cabinet structure includes dividing certain ministries and introducing multiple vice ministers, such as three deputy ministers for the Ministry of Finance, and the split of the Ministry of Law and Human Rights into three distinct entities: Law, Human Rights, and Immigration Affairs. This “fat” cabinet approach may complicate administrative efficiency and strain the state budget, potentially creating additional layers of bureaucracy for businesses and investors.

While this structure aims to fulfill political commitments and allow for specialized focus in each ministry, it also raises concerns about increased red tape. However, the Ministry of Investment, led by Rosan Roeslani, has pledged to streamline the investment process to offset these potential challenges. By simplifying entry points for foreign investors and reducing bureaucratic hurdles, Rosan’s ministry seeks to foster a more business-friendly climate essential for meeting Prabowo’s ambitious growth targets. 

Prabowo’s Foreign Policy Vision

Though Indonesia’s foreign policy remains centered on “free and active” principles, Prabowo’s military background suggests a more proactive approach to defense and international relations. His decision to appoint Sugiono as Foreign Affairs Minister reflects a preference for trusted allies with military and political expertise. Sugiono’s experience, coupled with Prabowo’s intent to personally guide foreign policy, could lead to a hands-on, strategic approach to international partnerships.

In less than a month after his inauguration, Prabowo will fly to will fly to Peru to attend the annual summits of the 21-member Asia-Pacific Economic Cooperation (APEC) and then the Group of 20 (G20) in Brazil. In these forums, Prabowo will have the opportunity to inform the global audience on the direction of his foreign policy for the next five years.

Prabowo’s commitment to supporting Palestine, as emphasized in his inauguration speech, illustrates Indonesia’s ongoing dedication to global humanitarian issues. This pro-Palestine stance, paired with a focus on regional cooperation, signals that Prabowo’s administration will seek a balanced, assertive role in international affairs. 

A Transformative Vision for Indonesia’s Future

Prabowo Subianto’s presidency ushers in a new chapter for Indonesia, marked by ambitious goals, a restructured government, and a forward-looking economic strategy. For the business community, this leadership change brings both opportunities and challenges. As Prabowo’s policies unfold, investors will be watching how his administration addresses bureaucratic challenges, stimulates economic growth, and cultivates Indonesia’s digital potential.

While the expanded cabinet and ambitious economic targets carry inherent risks, Prabowo’s focus on continuity and key strategic appointments lays a solid foundation for achieving his goals. Foreign companies are expected to closely monitor Prabowo’s first 100-day initiatives before formulating their strategies and engaging with the new administration.

As Indonesia’s regional influence grows, the world will be closely following the path laid out by Prabowo Subianto—a path that could redefine Indonesia’s place in Southeast Asia and beyond.