The Threat Of An Economy Named Premanism

Photo by Luthfiah VOI

JAKARTA At the time of the global economic downturn, it was often accused of being the cause of Indonesia's economic growth, still below 5 percent in the first quarter of 2025, the latest threat to the country's economy actually emerged from within the country. The threat is called thuggery!

Yes, recently business actors in Indonesia are worried about the rampant acts of thuggery that are often masked by community organizations or mass organizations. This has caused many business actors to feel anxious in running their business because they are worried that this act of thuggery of mass organizations will weaken them.

Researcher from the Center for Industry, Trade and Investment of Indef, Ahmad Heri Firdaus assessed that acts of thuggery and illegal levies under the guise of mass organizations cannot be separated from economic motives. The difficulty of finding work to macroeconomic factors such as the slowdown in the national economy urged individuals to launch acts of thuggery and extortion.

"There are various real motives if the investment becomes more unfavorable. But the most likely motive or what is possible is economic motives," he said.

He said, based on a report from the Central Statistics Agency (BPS), Indonesia's economic growth experienced a slowdown in the first quarter of 2025. Economic growth only reached 4.87 percent, while household consumption growth only touched 4.89 percent.

This economic slowdown is in line with data on an increase in the number of unemployed in Indonesia by the end of February 2025. Meanwhile, new unemployed and those who have been unemployed for a long time still have to earn money to support their daily needs. Therefore, it is not surprising that acts of thuggery and extortion are increasingly rampant in society.

"For example, say earlier, I wanted to ask for a project without going through a tender. Well, this is something that shouldn't happen, but we'll see again that all of the motives behind this are economic motives. That's what causes the push of these individuals to become more and more prominent for now, "explained Ahmad.

Therefore, he asked the government to further investigate the motives of the recent rampant acts of thuggery and extortion. The reason is that if the economic condition is fine, people's purchasing power increases, and the unemployment rate decreases, then the space for thuggery and extortion should be narrower.

On the other hand, Ahmad also admitted that acts of thuggery and extortion will hinder the flow of investment in Indonesia because the investment costs reflected in the Increase Capital Output Ratio (ICER) are bigger. "I'm afraid it will make Indonesia look like a wasteful country," he added.

The same opinion was expressed by the 10th and 12th Vice Presidents, Jusuf Kalla, who said that acts of thuggery were not only a matter of crime, but reflected the slumping economic conditions. But the big reason is, the economy, they don't work. Try if they work, where do they want to go, people in the market?" he said.

According to him, the slowdown in Indonesia's economy causes a negative cycle, starting from a decrease in purchasing power which causes reduced production and causes a wave of layoffs. The purchasing power is down, because many layoffs, trades are not good, people don't go to restaurants, people don't shop, people don't buy cars. There is a decrease in purchasing power, capabilities. Many children can't pay their tuition fees, because their parents may be laid off, that's a broad effect," added JK.

He revealed that efforts to eradicate thuggery are not enough just by enforcing the law. However, improvements must also be made in economic conditions so that people get income from decent jobs. "So both of us must overcome it. Improve the economy, effectively the nation. Then of course, criminal problems must be overcome," said JK.

The Business World And Investors Need Security Guarantees For The Government Of Indonesia

Chairman of the Indonesian Employers' Association (Apindo), Shinta Widjaja Kamdani explained that there are many factors that determine the sustainability of investment. In addition to incentives and ease of licensing, incoming investments also depend heavily on business security guarantees, legal protection, and social stability at the local level.

"When non-formal interventions or actions outside the legal corridors often occur, especially in the form of coercion, illegal levies, or intimidation, the risk to the continuity of investment also increases," he said.

He gave an example, the phenomenon of mass organization thuggery that interferes with the construction of BYD factories can cause concerns among investors, both from within and outside the country. Investors will wonder about the extent to which the Indonesian government is able to guarantee a stable and conducive business climate.

According to him, acts of thuggery against business actors further underscore the importance of legal certainty and protection against investment. In particular, in strategic projects that play a major role in encouraging national industrial growth and job creation.

Professor of the Faculty of Economics and Business, University of Indonesia, Telisa Aulia Falianty, emphasized that Indonesia as an investment destination must provide certainty about the security aspect that has recently been tarnished by rampant acts of thuggery. This is because the contribution of investment as reflected in Indonesia's Gross Fixed Capital Formation (PMTB) to GDP has decreased. In fact, this is a component that has contributed greatly to economic growth, after household consumption.

From the report from the Central Statistics Agency (BPS), PMTB contributed 28.3 percent to Indonesia's GDP in the first quarter of 2025. The contribution of the investment component shrank when compared to the fourth quarter of 2024 which reached 30.12 percent. BPS said that one of the factors was that investors were still waiting and seeing because of the development of the global economy.

In addition, Telisa continued, the security factor that is increasingly being reduced due to rampant acts of thuggery is one of the factors that investors fail to invest in Indonesia. This assumption is strengthened through the results of a survey that has been carried out in industrial estates in West Java. Many stories, I also surveyed industrial areas in West Java yesterday, many stories of this aspect of thuggery began to increase," he added.

Some thuggery practices are being carried out, namely requests for holiday allowances (THR) by mass organizations unofficially and tend to force them to still occur. Another example is illegal levies when the operational distribution of industrial estates is another form of thuggery action, thus disrupting the distribution and operational processes of industrial estates.

According to Telisa, the government should guarantee security for business actors. Otherwise, acts of thuggery will even set a bad precedent for Indonesia's investment climate while exacerbating the situation amid the challenges of weakening economic growth and people's purchasing power.