What The Economist missed about Indonesia

A recent briefing and leader on Indonesia featured in The Economist this month raise concerns that should not be dismissed lightly. Fiscal discipline, institutional checks and balances, democratic accountability, and the risks of excessive concentration of power are all legitimate subjects of debate.

But criticism, if it is to be useful, must also try to understand.

That is where both pieces feel incomplete. They do not merely express concern about Indonesia’s direction. They also reflect a familiar tendency in some external commentary: reading Indonesia mainly through political and economic lenses shaped elsewhere, then treating whatever does not fit those lenses as a warning sign.

Indonesia is not simply a market, a sovereign rating, or a democracy scorecard. It is a vast and uneven archipelago of more than 280 million people, shaped by painful history and deep social diversity. Its economy still carries inequalities that were never fully resolved by liberalisation or growth alone.

Seen only through fiscal ratios, investor sentiment, and opposition dynamics, Indonesia becomes a much smaller country than it really is.

The harder story lies elsewhere: in villages where opportunity remains limited; in children still facing malnutrition and stunting; in farmers trapped in unequal supply chains; in informal workers vulnerable to one illness or one failed harvest; and in regions that still feel distant from the centres of prosperity and decision-making.

These realities help explain why some policies resonate domestically even when they are viewed sceptically abroad.

This is also consistent with the constitutional spirit of Article 33 of the 1945 Constitution, which mandates that Indonesia’s natural resources and economic foundations must serve the greatest prosperity of the people. Development therefore cannot be measured only through macroeconomic indicators. It must also be judged by whether national wealth broadens opportunity, reduces inequality, and strengthens social justice.

Free school meals, rural development, and efforts to reduce inequality should absolutely be debated. They must be transparent, accountable, fiscally disciplined, and properly targeted. But dismissing them too quickly as populism or pet projects overlooks the social realities from which they emerge.

Nutrition policy in a developing country is not charity disguised as governance. It is human-capital policy. It concerns learning capacity, productivity, public health, and social stability.

The same applies to rural economic reform. Not every intervention that challenges concentration and dependency is anti-market. Sometimes it is an attempt, however imperfect, to make markets less unequal.

Indonesia’s challenge is therefore more complicated than many outside observers assume. The country must preserve macroeconomic stability while also addressing social exclusion. It must maintain fiscal credibility while investing in people who have long remained outside the full promise of development.

Fiscal prudence remains essential. Indonesia remembers the Asian financial crisis of 1997–98 not as theory, but as national trauma. No responsible policymaker takes fiscal credibility lightly.

Yet fiscal orthodoxy can also become too narrow when detached from social realities. Stability that does not broaden opportunity eventually becomes fragile. Democracies do not survive on macroeconomic discipline alone. They survive when citizens believe development includes them as well.

The Economist pieces also appear to read Indonesian democracy through a narrow institutional frame. Indonesia’s democracy has never followed a purely Western script. It has evolved through coalition-building, negotiation, religious and regional balancing, and the constant search for stability within an exceptionally diverse society.

This is not an argument against checks and balances. Institutions must remain strong. Corruption must be fought. Public spending must be scrutinised. The space for criticism must stay open.

But it is also too easy to treat Indonesia as failing whenever it does not resemble a Westminster parliament or a Western liberal template. Democratic life cannot be understood solely through imported categories. It must also be seen through Indonesia’s own history, political culture, and social realities.

Indonesia today is not Indonesia in 1998. Civil society is louder. Media is more varied. Citizens are more politically aware and more willing to criticise power. Indonesia must remain vigilant against institutional erosion, corruption, fiscal imprudence, and excessive concentration of power. Those risks are real.

At the same time, a country with deep inequality cannot govern only for the comfort of markets. Investor confidence matters, but legitimacy also comes from responding to citizens who still feel excluded from national progress.

To understand Indonesia is therefore to listen not only to investors and analysts, but also to ordinary citizens who continue asking why growth has not fully reached them.

Indonesia does not need less criticism. It needs better criticism: rigorous but fair, frank but not dismissive, and willing to understand the realities behind the headlines.

That is not a rejection of scrutiny. It is a plea for deeper understanding.

The views and opinions expressed in this article are those of the author in his personal capacity and do not necessarily reflect the official position of the Government of Indonesia or any affiliated institution.