From Long-term Plans to Flagships: Indonesia’s Reordered Development Agenda

President Prabowo Subianto’s first year has seen Indonesia’s policy trajectory being shaped by a suite of high-profile flagship programmes derived from the President’s political promises. This development marks a departure from the previous administrations, which were primarily anchored by long-term economic plans crafted by the country’s technocratic machinery.

Indonesia’s recent economic plans include the National Long-Term Development Plan (RPJPN) 2025–2045 and the Medium-Term Plan (RPJMN) 2025-2029, which are framed around the themes of inclusion, competitiveness, and green growth under the “Golden Indonesia 2045” banner.

Prabowo’s economic agenda is currently driven by three flagships. The first is a massive social programme, the Free Nutritious Meals (Makan Bergizi Gratis, MBG) scheme, which aims to provide free meals to tens of millions of schoolchildren and pregnant women. The second is Danantara,  a new state investment agency that will be used to restructure state-owned enterprises (SOEs).  The third is the “Red and White” cooperative, which entails establishing 80,000 village-level cooperatives that will supply basic goods, finance, and services in rural communities.

The three flagship programmes, though differing in form — social transfer, investment agency, and cooperative drive — are de facto national missions. MBG is framed as an investment in the nation’s future, addressing stunting and learning. Danantara aspires to professionalise SOEs and attract capital. Cooperatives aim to improve household access to basic goods and finance.

Table 1. Flagship Programmes in the Prabowo Administration

The turn to these flagships can be read as a response to the current structural limitations in Indonesia’s economic planning and implementation. Indonesia has state finance and planning laws but the link between technocratic planning and political budgeting continues to be fragmented, despite recent efforts to synchronise the two. In the current setup, the draft budget is subject to political bargaining in the Parliament, which can alter the budget’s original priorities. In addition, ambitious targets are often missed due to capacity constraints and uneven implementation.

In this context, the flagship programmes function as strategic workarounds to these structural limitations. Each operates as a fast-track vehicle that locks in funding and momentum early, providing a political solution to long-standing institutional inertia and an instrument for reasserting executive authority over the fragmented planning-budgeting process.

The real test of these flagships will be their alignment with Indonesia’s long-term goals for human capital, industrial upgrading, and competitiveness, and their congruence with the crowded, decentralised planning system. These programmes also reopen a broader question about Indonesia’s growth path. For decades, the economy has leaned on natural resources and large domestic markets, but the new RPJPN seeks a pivot to a higher-value, advanced-economy model. Framed as a way out of premature deindustrialisation and the middle-income trap, this vision brings Indonesia closer, at least on paper, to the trajectories of fellow Asian high-income aspirants.

Other Asian countries share similar ambitions but differ in implementation. China’s 14^th Five-Year Plan and 2035 vision place innovation, advanced manufacturing, and green development at the core of high-quality growth, relying on state-led investment and nationwide mobilisation to build strategic industries and bring key technologies in-house. The upcoming 15^th Plan signals an even stronger sovereign push into AI-driven industry and space capabilities. This innovation drive is reflected in China’s emergence as the world’s largest source of patent applications and grants.  

Meanwhile, Vietnam and Malaysia are betting on foreign direct investment to drive their leaps in value chains. Vietnam’s 2026–2030 “sprint to 2030” sets ambitious growth targets built on digital transformation and green growth, backed by concrete measures: a digital infrastructure plan, targeted tax and land incentives, and active courting of global tech firms such as Nvidia, Samsung, Foxconn, Google, and Meta for manufacturing, AI and data-centre projects. Malaysia’s 13th Plan (2026–2030) couples its push for higher economic complexity with clear ambition to become Southeast Asia’s leading semiconductor hub, backed by the New Industrial Master Plan 2030 and National Semiconductor Strategy, plus a mature manufacturing base, established R&D capacity, and an industry-ready workforce—all reinforced by coordinated facilitation from government agencies.

How do Indonesia’s flagship programmes stand against this regional policy backdrop? Instead of leading with knowledge, technology or green industrial policy, its early bets are on nutrition, state investment management, and mass cooperatives.  These policy choices are not necessarily misplaced. If MBG is well-designed and professionally implemented, it can be an inclusive strategy to raise productivity by tackling stunting and keeping children in school.  Danantara can rationalise the SOE sector and channel capital into strategic and job-creating industries. The new red and white cooperatives can broaden participation in markets and strengthen local resilience.

Ultimately, Indonesia’s success will depend less on producing plans than on executing positively impactful programmes.

More importantly, Indonesia should continue to protect planning and fiscal space for industrial, technological, and green transition agendas. Big recurrent spending on MBG and large capital for Danantara must coexist with expenditures to meet infrastructure, education and climate needs within tight budget limits. This requires transparent medium-term costing, clear trade-offs and stronger, less politicised governance and evaluation. The RPJMN mid-term reviews, the first of which is due by 2027, will offer a chance to conduct empirical evaluation and open reporting, and to make evidence-based adjustments rather than cosmetic changes. 

Ultimately, Indonesia’s success will depend less on producing plans than on executing positively impactful programmes. Formal development plans, which serve as broad indicative frameworks setting national priorities, must be translated into targeted, sequenced implementation strategies that advance long-term goals of productivity, competitiveness, inclusion and decarbonisation. The new flagship programmes should complement this broader agenda.

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