Food poisoning and protests in Indonesia are a test for Probovo’s first year in office

When Prabowo Subianto ran to become Indonesia’s new president, he promised dynamic economic growth and major social changes.

But his first year in office did not live up to that populist platform. Rather, his ambitious promises face the realities of Southeast Asia’s largest economy.

Disillusioned youth worried about jobs took to the streets at the end of August to protest against rising living costs, corruption and inequality – the government was forced to withdraw benefits for politicians who had sparked public anger. Earlier in the year, there were also massive protests against budget cuts that affected health and education spending.

What didn’t help was that it coincided with an expensive free school meals program – at an annual cost of $28bn (£20.8bn). A key element of Prabowo’s agenda, it aims to tackle child malnutrition, improve educational outcomes and boost the economy. Authorities describe it as an “investment in Indonesia’s future.”

In addition, images have emerged in recent months showing emaciated, dehydrated children – some as young as seven – attached to IV drips. They suffered from food poisoning after eating the free lunch

After more than 9,000 children fell ill since the scheme was introduced in January, critics have questioned whether it is working at all or straining public resources while piling up debt.

Analysts warn that all these challenges highlight broader problems in public spending and oversight – which in turn point to deeper strains in Indonesia’s $1.4 trillion economy.

This is a critical moment for the vast archipelago of more than 280 million people spread over thousands of islands.

Despite steady annual growth of roughly 5 percent in recent years, Indonesia is feeling pressure from slowing global demand, rising living costs and competition from regional neighbors such as Vietnam and Malaysia. Both countries have successfully attracted foreign companies trying to diversify production away from China.

The protests in August, in which 10 people died, showed the extent of public anger against Prabowo’s government. Protesters accused him of prioritizing prestige policies and projects over providing economic support.

Prabowo, who has set an ambitious growth target of 8 percent by 2029, and his ministers continue to defend their policies, saying they will create jobs and boost demand.

“We have experience of growth above 7%. So… Indonesia knows that higher growth is achievable. But of course we have to look at the global economy and world trade,” Indonesia’s Coordinating Minister for Economic Affairs Airlangga Hartarto told the BBC.

Achieving such growth will require careful management of public finances and foreign investment, experts say.

A new Danantara sovereign fund, which targets high-impact projects in renewable energy and advanced manufacturing, could spur higher growth, said Adam Samdin of consultancy Oxford Economics.

Airlangga told the BBC that Indonesia was “ready” and willing to “spend on the right sector of the economy”.

But ambitious and challenging commitments such as the free school meals program have some questioning Prabowo’s priorities. Some health NGOs are calling on him to stop the scheme.

He defended it last month, saying: “Brazil needed 11 years to reach 47 million beneficiaries. We reached 30 million in 11 months. We are very proud of what we have achieved.”

Another example is India, which has the largest school lunch program in the world, feeding nearly 120 million students.

But unlike Brazil and India, Indonesia’s program has been accused of being ineffective, despite the much higher cost, due to widespread food poisoning.

Indonesia faces unique challenges. It lacks the infrastructure to deliver food safely and quickly to schools on its 6,000 inhabited islands, Mr. Samdin said.

This includes proper refrigerated transport as well as strict food safety standards and the resources to enforce them to keep food fresh in the tropical heat.

So the government relies on third parties and contractors for the program, making quality monitoring even more difficult.

But a flagship program failing is not Prabowo’s only challenge.

US President Donald Trump’s trade war has not spared Indonesia, which now faces a 19% tariff on exports to America.

Airlangga, which participated in the negotiations, said it was grateful for a fare rate that could compete with rivals such as Thailand, Malaysia and the Philippines, and that it expected the US-Indonesia trade deal to be signed by the end of October.

But 19% is still a high price for exporters, who will also face pressure from shifting Chinese goods to Asia to avoid high tariffs in Europe and the US.

Indonesia – which is on the lookout for new markets and partners – also signed a trade deal last month with the European Union that it had been negotiating for almost 10 years. Airlangga expects trade in the block to increase two-and-a-half times over the next five years.

But investment, which boosts manufacturing and creates jobs in countries like Thailand and Vietnam, has become a challenge here.

Foreign companies have long complained about the bureaucracy and costs of doing business in Indonesia, but they still come because of the large user base and resources. It is saturated with nickel and copper, which are integral to electric vehicles and other green technologies, and palm oil.

But these were not labor-intensive industries, which meant they never created jobs on the same scale as manufacturing in countries like China and Vietnam.

Airlangga said Indonesia is now investing in the digital economy to create more jobs and boost growth. But whether it can provide enough people with the right skills to staff data centers and other such businesses is the big question.

Data centers also require investment and investors have been particularly rattled following the sudden sacking of highly respected former finance minister Shri Mulyani Indrawati.

Mulyani’s house was ransacked during the protests by demonstrators who blamed her for the high cost of living. Her replacement is a relatively unknown official, Purbaya Yudhi Sadeva, who said the protests were due to monetary “mistakes”.

He is a big supporter of Prabowo’s ambition of 8% annual growth by 2029 – a rate the country has not achieved since the 1990s.

Even the current 5% expansion rate is contested by some economists who also say the economic data is politicized to meet Prabowo’s growth target. Airlangga denied this.

“I am optimistic that Indonesia is still attractive,” he said, citing “the value chain, the investment climate and the speed of President Prabowo to deregulate.”

But economists say declining auto sales, shrinking foreign investment, shrinking manufacturing and reports of layoffs suggest economic activity is weakening rather than picking up.

“Indonesia’s economy is based on consumption and so from a perspective it can continue to provide a solid engine even if it does not grow significantly,” Mr Samdin said.

“Growth may slow, but the sheer size of the population will provide some economic activity.”

This may reassure optimistic investors, but it does not solve the challenges that lie ahead for President Prabovo.