Indonesian President Prabowo Subianto speaking during a panel discussion at the World Economic Forum in Davos, Switzerland, on Jan 22. - AP
JAKARTA: President Prabowo highlighted Indonesia's political stability, fiscal discipline, and rule of law as key to attracting investment amidst global uncertainties.
Indonesia's economic credibility is underpinned by its history of honouring debts and its "global bright spot" status, according to the IMF.
The Danantara sovereign wealth fund enables Indonesia to co-invest, overhaul state-owned enterprises, and enforce the rule of law to eradicate poverty.
Making his World Economic Forum (WEF) debut as Indonesia’s president, Prabowo Subianto used the Davos stage to outline his view of Indonesia as a steady, investable economy amid a more unsettled global environment, stressing the importance of stability and credibility as geopolitical risks rise.
South-East Asia’s largest nation, home to about 280 million people, remains open for business, Prabowo said. Speaking to a packed room of business and political leaders on Jan 22, he said Indonesia was ready to grow and co-invest with partners, but this must rest on political stability, fiscal discipline and respect for the rule of law.
The President, who was inaugurated in October 2024, said his address came at a time of wars, trade tensions and fragile trust between nations. “There will be no prosperity without peace,” he said, adding that peace and stability were “the ultimate prerequisites for growth and prosperity”.
Indonesia has stayed relatively calm, he said, which was neither accidental nor the result of luck. Instead, it reflected longstanding political choices to prioritise “unity over fragmentation”, and “collaboration over confrontation”.
That record of choosing unity has underpinned Indonesia’s economic credibility. Mr Prabowo said that his country has never defaulted on its debt, with successive governments honouring the obligations of their predecessors.
Such choices have paid off, exemplified by Indonesia’s steady economic performance, he said, noting how international institutions such as the International Monetary Fund (IMF) had described the country as a “global bright spot” despite tightening financial conditions and global uncertainty.
Indonesia continues to grow, with Prabowo projecting a 5 per cent to 6 per cent economic expansion in 2026, higher than the IMF’s 5.1 per cent estimate. And Danantara Indonesia, a new sovereign wealth fund set up a year ago, will help the country move beyond being a passive destination for foreign capital, he said.
“With Danantara, I can stand here in front of you as an equal partner. Indonesia is now not only a land of peace and stability. Indonesia now is more and more the land of opportunity.”
It will also be used to overhaul state-owned enterprises, which he described as necessary to improve efficiency and governance. These firms would be rationalised and run under international standards, including by recruiting foreign professionals where needed.
“We want the best governance and the best management under international standards.”
Prabowo also said that his government was disciplined about spending, pointing out how it is quick to halt programmes it viewed as inefficient, and redirect funds to invest in human capital.
He referred to initiatives such as free nutritious meals for children and mothers, and annual medical check-ups. Catching illnesses early, he said, would reduce long-term healthcare costs while keeping people healthier and able to work.
Prabowo’s time in office has seen moments of public scrutiny. Nationwide protests in late August 2025 put a spotlight on policing, while the government’s response to severe flooding in parts of Sumatra in November also drew attention.
At the WEF, he reiterated the importance of good governance and law enforcement, noting how no serious investor would commit capital to a country where the rule of law was uncertain.
Since taking office, he said, his administration had uncovered widespread illegal activities across sectors, from fuel and crude oil governance to plantations and mining. Millions of hectares of illegal operations had been confiscated, licences revoked, and mines shut.
Such practices, he said, were not examples of free enterprise but what he called “greedy-nomics”.
“There can be no compromise. There can be no turning back,” he said, adding that his administration was determined to uphold the law.
Despite his tough tone, Mr Prabowo said such actions were rooted in a social purpose to better the lives of Indonesians. Extreme poverty in Indonesia has fallen to its lowest level on record, he said, and his aim was to eradicate it entirely within four years.
Indonesia, Prabowo stressed, does not fear economic integration. A trading nation for centuries, it continues to pursue trade and economic agreements – not out of fashion but necessity.
Trade, when done fairly, is “a tool for prosperity” rather than a threat to sovereignty. Prabowo said Indonesia preferred steady cooperation over confrontation and would focus on maintaining stability as it pursued growth in a volatile global environment.
“Indonesia chooses peace over chaos,” he said. “We want to be a friend to all, an enemy to none.” - The Straits Times/ANN
