Prabowo Subianto, a former army general with a controversial past and minister of defence in the current administration, has been elected president of Indonesia.
This was his third presidential run.
Prabowo holds the dubious distinction of having been banned from entering the US due to allegations of atrocities in East Timor, a ban only lifted in 2020.
He will assume the presidency at what would otherwise be a propitious time. With 274 million people and a 2022 GDP of $1.2 trillion, Indonesia became an attractive target for foreign investors during current president Joko Widodo’s two terms. But he brings a mixed legacy to the post.
“Prabowo is a product of the Suharto era,” says Maria Monica Wihadja, visiting fellow at the ISEAS-Yusof Ishak Institute and professor at the National University of Singapore.
Despite being Suharto’s son-in-law, he was rumored to have engineered the 1998 riots that ousted the long-time dictator. Wihadja is concerned whether Prabowo will stick with the reform model that has made Indonesia attractive to investors.
“Continued investment relies on institutions and institutional continuity” she says. “Prabowo has in the past campaigned for an end to term limits, for example.”
Southeast Asia’s largest economy has seen strong growth since the Covid pandemic, particularly as investment in its nickel processing industry booms.
GDP grew 5.3% in 2022, supported by domestic consumption and further bolstered by the commodity exports as global prices of coal, palm oil, and iron have rallied. Indonesia also captured $43 billion in FDI in 2022, the highest total in the country’s history.
Leadership questions are especially timely given that OECD accession is on the agenda.
“Indonesia’s application is the first from Southeast Asia, one of the most dynamic growth regions of the world,” notes OECD Secretary-General Mathias Cormann. “As the largest economy in Southeast Asia and the world’s third largest democracy, Indonesia is a significant global player, providing important leadership across the region and beyond.”
