The Divergent Economics of Sumitro’s Son
Unlike his father, Prabowo Subianto is running Indonesia’s economy recklessly and without fiscal discipline. The apple does not always fall close to the tree.
Tempo
June 1, 2026
IN Sumitro Djojohadikusumo and Prabowo Subianto, we see a contradiction. While claiming to be influenced by his father’s thinking, President Prabowo is steering the Indonesian economy in ways that deviate from the ideas of the late senior economist.
Sumitro, a Keynesian, believed the state should not remain idle in the economy, though it should not exercise excessive control. The architect of Indonesia’s economic policy in the early years of independence believed a healthy economy could not be driven by command. A healthy economy, he argued, was propelled by a balance between organic market activity and careful government planning.
Prabowo has taken the opposite path. Several of his flagship programs were born from executive edicts and implemented hastily. In the case of the red and white village cooperatives, he ordered the simultaneous construction of thousands of cooperatives despite lingering questions over governance. Through a presidential instruction, Prabowo ordered the Finance Minister to divert village funds to bankroll the cooperatives and appointed Agrinas Pangan Nusantara to manage them.
Because the process has been one-directional and largely devoid of discussion, implementation has been chaotic. In the rush to meet construction targets, some cooperative buildings were erected carelessly—clustered too closely together or located in areas difficult to access. Communities, the true owners of village funds, have been reduced to spectators. Yet, if the cooperatives later suffer losses, it will again be village funds that would be used to cover the damage.
Sumitro, who served five times as a minister under the administrations of Sukarno and Suharto, believed cooperatives could not function if commanded from above. He did not forbid cooperatives from receiving state support, but that did not mean direct financing. He proposed that cooperative capital should come from dividends generated by state-owned enterprises. The condition was that cooperatives must still be willing to compete with other businesses.
The free nutritious meal (MBG) program, another example, has likewise been driven by command and weak planning. The initiative, which was originally allocated Rp335 trillion this year before being cut to Rp268 trillion, has become a source of budgetary waste. A program design focused merely on output rather than outcomes has dazzled the public with impressive numbers. The project is claimed to be successful because of its massive number of beneficiaries. Yet its core goal—meeting students’ nutritional needs—remains far from fulfilled.
Another striking difference between Sumitro and Prabowo lies in fiscal policy. For Sumitro, as he stated in a speech while serving as Finance Minister, every rupiah spent was a trust entrusted by the people. He practiced strict fiscal discipline.
Prabowo has done the opposite. He has insisted on pushing ahead with the free meals program and the red-and-white cooperatives even as state revenues weaken and the deficit swells amid soaring global oil and gas prices. Disorderly fiscal governance has made markets doubtful about Indonesia’s economic prospects.
Prabowo has also distorted Sumitro’s ideas regarding an investment management institution. Sumitro proposed that state-owned enterprises set aside a modest 1 to 5 percent of their profits for such an institution, which would then invest the funds to support development. His idea was modeled on sovereign wealth funds in many countries.
Prabowo, meanwhile, established Daya Anagata Nusantara, or Danantara, which consolidated all state-owned enterprises under one umbrella with assets valued at around Rp17 quadrillion. It is this claim of enormous assets that has been used to seek new debt financing. Danantara’s governance has also been deeply troubled.
Prabowo, who admires the model of Chinese state capitalism under Deng Xiaoping, has positioned state-owned enterprises as the spearhead of the economy. Through state firms, he has tightened his grip over key business sectors. Most recently, he established a new state-owned company that will monopolize the export of natural resources. Sumitro, were he still alive, would likely reject a state authority so expansive that it penetrates every vein of commerce.
The vast differences between father and son extend far beyond economic ideas, it also encompasses democratic practice. Sumitro was never allergic to criticism. He believed criticism was a means to improve conditions. Prabowo, by contrast, has accused his critics of being haters driven by political motives.
The apple does not always fall close to the tree.