Command Economy

AFTER only five months under President Prabowo Subianto, Indonesia’s economic policy has changed drastically. Indonesia is returning to the 1959-1965 period. To borrow President Sukarno’s guided democracy expression, we are calling it the command economy, in line with the militarism being promoted by Prabowo.

Under guided democracy, the government not only regulated but also controlled most economic activities. Under the command economy, the people in charge of management are active and retired military personnel controlled directly by the national leadership. This is despite the fact that, according to Article 33 paragraphs 1 and 4 of the 1945 Constitution, the national economy is managed on the basis of economic democracy, which prioritizes equal prosperity for all and active public participation.

The latest practical example of the command economy is the transformation of three state-owned construction enterprises into companies working in the agriculture sector. These three SOEs are Indra Karya, which has become Agrinas Palma Nusantara and is tasked with managing oil palm and biodiesel; Yodya Karya, now Agrinas Pangan Nusantara managing rice matters; and Virama Karya, now renamed Agrinas Jaladri Nusantara and working in the fisheries sector. The three companies will be staffed by active and retired military officers to the level of assistant manager, with the rank of colonel.

This transformation of SOEs is clearly unusual. There was no business feasibility study that found that Agrinas was capable of managing food security and energy. And on top of this, the three state-owned companies previously worked in the civil engineering consultation services sector, which has nothing to do with matters of oil palm, agriculture or fisheries.

Moreover, there is no guarantee that soldiers are able to manage food, a sector that bears no relation to matters of combat and defense. For example, Agrinas Palma Chief Executive Officer Agus Sutomo is a retired general who commanded Indonesian Army Special Forces Command from 2012 to 2014 and was commander of the Greater Jakarta Military Area Command from 2014 to 2015. Under him is Cucu Somantri as director of plantations, the driving force of the company. Agus and Cucu were both members of the Military Academy class of 1984.

But it seems that as far as Prabowo is concerned, the short course on business and financial management that he organized at his residence in Hambalang, Bogor Regency, West Java, in January 2025, taught them enough to be able to run a company. These managers have significant responsibilities. Immediately after it was established, Agrinas Palma obtained 21,000 hectares of land seized from Duta Palma Group, which had been embroiled in a corruption case.

The same special treatment was given to its sister companies. Agrinas Pangan, that will manage millions of hectares of land resulting from the clearing of forests for the program to establish rice fields. As well as managing assets, the three companies have received fresh funding in the form of injections of state capital totaling Rp8 trillion. Agrinas Jaladri, for example, received Rp2.5 trillion to purchase fishing vessels and to construct aquaculture ponds.

This type of management is highly risky. The command economy being promoted by Prabowo eliminates the separation of responsibilities between those who make policy, implement it, and monitor it. This could lead to a sharp increase in the risk of corruption and abuse of authority.

These changes mean as if Article 33 paragraph 3 of the 1945 Constitution has changed to, “All earth and water and the natural resources contained therein are under the control of the military.” The next part of this article is now a question mark: for whose greatest prosperity?