Economic Stability In The Prabowo-Gibran Era Is Considered Not Yet Followed By Structural Changes

JAKARTA - INDEF Senior Economist M. Fadhil Hasan said Indonesia's economic stability in the first year of the Prabowo-Gibran administration had not been accompanied by real structural changes.

According to Fadhil, stable macroeconomic achievements are still a continuation of previous policies, not the result of new reforms that are able to encourage acceleration of growth.

In general, macroeconomic indicators show stability with economic growth of around five percent, inflation below three percent, and a decrease in the open unemployment rate. However, economists assess that there has not been a significant structural change," he said in a virtual discussion, Thursday, October 23.

In addition, Fadhil highlighted that there is still a gap between government claims and public perceptions. The Free Nutrition Food Program (MBG) is a real example of these differences in views.

"The government considers this program to have succeeded in reaching many beneficiaries, while the public highlights its effectiveness and equity," he said.

Fadhil acknowledged that the expansionary fiscal policy was indeed able to maintain people's purchasing power, but was not sufficiently effective in encouraging long-term productivity and investment.

Domestic investment is increasing, but the direct flow of foreign investment is slowing down, indicating an investment climate that is not yet fully conducive, he said.

In addition, said Fadhil, the export structure still depends on primary commodities such as crude palm oil (CPO), coal, and nickel, while the downstream sector has not shown any significant progress.

Based on a big data analysis of eight priority programs (Asta Cita), INDEF found that downstreaming was the sector with the second-highest negative sentiment after Eating Free Nutrition. This discrepancy in public perception is also seen in the Ministry of Energy and Mineral Resources, which gets negative sentiment even though it has a number of important achievements.

"This reflects the weak communication strategy of the government in managing perceptions and exposure of work results," said Fadhil.

Fadhil said that the evaluation of the performance of the first year of the Prabowo 'Gibran government needs to consider a short time context and balance between factual achievements and public perceptions.

"The evaluation of the performance of the first year should consider a short time context and the need for a more balanced assessment between factual results and public perceptions," he concluded.