Anastasya Lavenia Yudi, Jakarta – The Centre for Strategic and International Studies (CSIS) believes that the Indonesian government has not yet responded to the root causes of the recent protests occurring in various regions. According to Yose Rizal Damuri, the Executive Director of CSIS, the series of protests was triggered by a combination of mounting economic pressures and a political process that failed to address the people's aspirations.
Yose stated that the government tends to see this situation as mere political turmoil requiring swift action. "However, there is still no acknowledgment that the welfare and economy of Indonesia are currently not in good condition," said Yose during a media briefing entitled Wake Up Call dari Jalanan: Ujian Demokrasi dan Ekonomi Kita (Wake Up Call from the Streets: The Trial of Our Democracy and Economy) at the CSIS office in Central Jakarta on Tuesday, September 2, 2025.
CSIS researcher Deni Friawan added that one of the main causes of the recent protests is the crisis of trust in the government due to the collapse of fiscal legitimacy.
On one hand, the people are asked to pay taxes and accept the government's efficiency measures. However, on the other hand, the government seems to be spending extravagantly by increasing the number of ministries and institutions, allowing dual positions in state-owned enterprises (SOE), and raising the salaries and allowances of members of the House of Representatives (DPR).
Deni said that these contradictions create a fiscal legitimacy crisis. After all, taxes are a social contract between the people and the state. When citizens agree to pay taxes, they expect reciprocity in the form of public services, stability, and justice.
"Unfortunately, the sense of justice is fading today due to contradictions in the government's policies," said Deni.
Deni cited several indicators showing that Indonesia's economy is currently not in good condition. One of these indicators is the increase in prices of strategic food commodities. According to Deni, although the overall inflation rate remains low, the current price of rice ranges from Rp14,000 to Rp18,000.
Furthermore, the prevalence of layoffs (PHK) is a signal that the labor market is currently not in good condition. From January to June 2025, the Ministry of Manpower recorded 42,385 workers affected by layoffs, which was a 32 percent increase from the previous year.
Another issue is that the majority of the workforce in Indonesia is employed in the informal sector. Based on data from Statistics Indonesia (BPS), as of February 2025, the number of people working in the informal sector was recorded at 86.58 million, or about 59.40 percent of the total workforce.
"In Indonesia, the problem is not just about whether people are employed or not, but the problem is that today there are very limited quality jobs or jobs that provide decent income," said Deni.
Last Monday, Coordinating Minister for the Economy Airlangga Hartarto claimed that Indonesia's fundamental economic conditions are still solid amid the prevalence of protests. Airlangga also revealed several indicators showing the solidity of the economic fundamentals.
First, he mentioned that the economic growth recorded in the second quarter of 2025 was 5.12 percent year over year. Second, the Manufacturing PMI returned to an expansion level of 51.5 in August 2025 after four consecutive months of contraction.
In responding to the protests, President Prabowo has announced that all political parties in the DPR have agreed to revoke the policy of allowances for the DPR members and impose a moratorium on overseas work visits. Prabowo stated that the chairmen of political parties have expressed that they have taken firm steps against Parliament members who have made incorrect statements.
Prabowo also stated that aspirations can be expressed peacefully. However, he said, the expression of aspirations that is accompanied by the destruction of public facilities and anarchic activities constitutes a violation of the law.
"To the National Police and the Indonesian National Armed Forces, I instruct you to take the most decisive actions against any form of destruction of public facilities, looting of individual houses or public places, or economic centers, in accordance with the applicable law," said Prabowo at the Merdeka Palace, Jakarta, on Sunday, August 31, 2025.
Source: https://en.tempo.co/read/2045528/csis-says-indonesian-govt-reluctant-to-admit-economy-is-weakenin