Protests and riots rocked the nation in August, in the wake of the country’s commemoration of 80 years of Independence. Only weeks after the President delivered his first state of the nation address and the 2026 state budget, unrest erupted over a controversial hike in lawmakers’ salaries. 

But the public anger went beyond the pay rise. It was also directed at Prabowo who has been criticized for his fiscal policies to finance his costly populist programs. These programs come at the cost of deep budget cuts elsewhere.     

While doubling the budget for the free nutritious meal program (MBG) to Rp 335 trillion (US$20.4 billion) and increasing lawmaker salaries, Prabowo and his administration cut transfers to regions by almost 25 percent of the amount delivered this year at Rp 864 trillion.

In regions such as Pati, Central Java, protests broke out, triggered by the local government's move to increase property taxes. With financial support from the central government drying up, the local administrations chose to try the easiest way to squeeze more liquidity: taxing the people.

The central government, too, is betting on aggressive revenue growth of taxation at 13.5 percent, a figure that former finance minister Sri Mulyani Indrawati called “high and ambitious”. Yet, the President, who has no opposition in the House of Representatives and other branches of the government, is carrying on with the plan. 

The enormous power that the President possesses may be the root of the current crisis. Prabowo’s political dominance in the government and the legislature may become a liability when used to push through his priority programs too forcefully, putting pressure on the economy and the public.