Prabowo Unveils Three Key Strategies to Shield Indonesia’s Economy Amid Global Uncertainty
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JAKARTA, investortrust.id – Indonesian President Prabowo Subianto has introduced three major economic strategies to safeguard the country's economic resilience in the face of global uncertainty. The move comes after United States President Donald Trump announced a 32 percent reciprocal tariff on Indonesian goods, citing an unfair trade surplus.
The announcement was made by Deputy of Dissemination and Media Information at the President Communications Office, Noudhy Valdryno, who emphasized that Prabowo had anticipated the shift in global trade dynamics and had been preparing comprehensive policies since his first day in office.
“In the face of global challenges, including new U.S. tariffs, President Prabowo has demonstrated a sharp grasp of geopolitical trends. His deep understanding of international relations and global trade is crucial for maintaining Indonesia’s economic stability,” said Noudhy in a statement released on Friday, April 4, 2025.
He added that the three economic breakthroughs—centered around diversifying trade partners, downstreaming natural resources, and boosting domestic consumption—are designed to sustain Indonesia’s growth even amid external disruptions.
1. Expanding Indonesia’s Trade Partnerships
One of Prabowo’s earliest and most significant moves was to expand Indonesia’s international trade partnerships. In his first week as president, Prabowo submitted Indonesia’s application to join BRICS—an economic bloc comprising Brazil, Russia, India, China, and South Africa—which represents 40 percent of global trade.
“Indonesia’s accession to BRICS reinforces our multilateral trade agreements,” Noudhy said.
Indonesia has already signed the Regional Comprehensive Economic Partnership, or RCEP, which includes all 10 ASEAN countries along with Australia, China, Japan, South Korea, and New Zealand—collectively covering 27 percent of global trade. Additionally, Indonesia is on track to join the Organisation for Economic Co-operation and Development, OECD, which accounts for 64 percent of global commerce.
Other agreements include the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CP-TPP), the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU-CEPA), and the Indonesia-Eurasian Economic Union CEPA (I-EAEU CEPA).
Beyond multilateral deals, Indonesia has also secured bilateral trade agreements with countries including South Korea, Japan, Australia, Pakistan, the United Arab Emirates, Iran, and Chile, further strengthening its international trade competitiveness.
2. Accelerating Resource Downstreaming
Indonesia’s vast natural resources have historically been exported in raw form. To address this, Prabowo has prioritized industrial downstreaming, starting with the nickel sector. Exports of nickel and its derivatives soared from $3.7 billion in 2014 to $34.3 billion in 2022.
To institutionalize this shift, Prabowo launched BPI Danantara, a state-backed initiative designed to finance and manage downstream projects across critical sectors such as mining, coal, oil and gas, plantations, fisheries, and forestry.
“With this approach, Indonesia not only boosts export competitiveness but also reduces dependency on foreign investment, creates jobs, and promotes sustainable resource-based economic growth,” Noudhy explained.
3. Strengthening Domestic Consumption Resilience
The third strategy focuses on stimulating domestic consumption, which accounts for 54 percent of Indonesia’s GDP. Central to this plan is the Free Nutritious Meals program, aimed at reaching 82 million beneficiaries by the end of 2025.
Additionally, Prabowo plans to establish 80,000 Red and White Village Cooperatives to invigorate rural economies, generate employment, and enhance cash flow in regional areas.
“These efforts will not only lift domestic consumption but also lessen reliance on imports and fortify the domestic economy,” Noudhy said.
Noudhy expressed optimism that the combination of strategic trade alignment, resource value addition, and enhanced domestic spending would enable Indonesia to maintain stable and optimistic economic momentum within Southeast Asia and globally.
“By strengthening international trade ties, optimizing resource potential, and boosting domestic consumption, President Prabowo proves that Indonesia can continue to grow despite an unpredictable global landscape,” he concluded.