Why Indonesia’s Sweeping Overhaul Is Spooking Markets

Less than a year since taking office in October 2024, Indonesia’s President Prabowo Subianto has doubled down on ambitious plans to remake Southeast Asia’s biggest economy. This comes despite policy changes earlier this year that spooked investors and sent the rupiah to levels not seen since the 1997-1998 Asian crisis, when the country needed a global bailout.

Rattled by deadly nationwide protests in August over layoffs and high living costs, Prabowo is betting that tightening his grip on power and ramping up welfare spending will restore calm and deliver prosperity.