Prabowo also appointed Bahlil Lahadalia as Coordinating Minister for Downstreaming and Energy Transition. Bahlil will retain his position as minister of energy and mineral resources.
At RSUD Limpung, Gibran spoke with Arsenio, a child who had been receiving treatment for four days. Arsenio said he was feeling better and was no longer experiencing diarrhea, dizziness, nausea or vomiting.
But an economist has questioned whether that position is realistic given the governments current revenue, which remains insufficient to finance its ambitious development plans.
Indonesia’s tax-to-GDP ratio has yet to reach 10%, interest payments on government debt continue to erode state revenue, and youth unemployment remains high. These are among the structural economic challenges highlighted in a CELIOS report assessing the first two years of the Prabowo-Gibran administration.
In the report, CELIOS urges the government to seek new sources of revenue without increasing the tax burden on lower- and middle-income households. One proposal highlighted is the introduction of a wealth tax on the ultra-rich.
According to the 2026 State Budget Financial Note, Indonesia’s tax-to-GDP ratio has remained below 10% over the past decade. Meanwhile, the tax-to-GDP ratio target in the 2027 State Budget is set at 9.26%.
CELIOS proposes a wealth tax of 1%–2% on individuals with net wealth exceeding Rp84 billion. The scheme is estimated to have the potential to generate up to Rp142.2 trillion in additional state revenue annually.
Illustration of President Prabowo Subianto and 26 members of the Presidential Advisory Council. [Suara.com/Syahda]
A wealth tax differs from income tax because it is levied on the value of net assets after liabilities have been deducted, rather than solely on income received over a given period.
CELIOS argues that the ultra-rich are appropriate targets for such a policy because they are considered to have benefited substantially from the exploitation of Indonesia’s natural resources. In its Inequality 2026 report, CELIOS states that 58% of the wealth held by Indonesia’s 50 richest individuals comes from natural resource extraction activities.
According to CELIOS, a wealth tax is not intended to punish economic success, but to increase the fiscal contribution of those who have benefited most from economic activity.
Debt Interest Payments Reach Rp599.4 Trillion
Beyond tax revenue, CELIOS highlights the government’s debt burden, which it says is restricting fiscal space. The report records the ratio of debt interest payments to tax revenue at 24%.
Debt interest payments of Rp599.4 trillion are also reported to be substantially higher than the health budget of Rp247.3 trillion. This situation is seen as narrowing the government’s capacity to finance other development priorities.
CELIOS proposes several measures to ease debt pressures, ranging from reviewing spending on programmes considered wasteful or non-essential to exploring negotiations with creditors for the cancellation of part of the interest or principal owed.
Another option is a debt swap, in which debt obligations are exchanged for funding for specific programmes, such as forest restoration.
The report also highlights the Free Nutritious Meals (Makan Bergizi Gratis/MBG) programme and the Merah Putih Village Cooperatives (Koperasi Desa Merah Putih/KDMP), which CELIOS says should be assessed in terms of budget efficiency and their impact on small businesses.
CELIOS also warns that a development model overly reliant on economic expansion and natural resource exploitation risks causing ecological damage while placing additional pressure on the state budget.
A 2026 CELIOS study estimates that the economic losses caused by forest and land fires reached Rp123.1 trillion. Meanwhile, losses resulting from flooding in Sumatra are estimated at Rp68.6 trillion.
CELIOS therefore calls for a shift towards a restorative and regenerative economic model, including consideration of the Doughnut Economics framework, which incorporates ecological limits into policymaking.
Youth Unemployment and Low Wages
Another issue highlighted in the report is the limited availability of quality employment opportunities for young people. Statistics Indonesia (BPS) data for 2025, cited by CELIOS, show that 51.5% of Indonesia’s unemployed population is aged 15–24.
CELIOS also cites its 2026 study estimating that 109 million Indonesians work for wages below the minimum wage. Generation Z workers, on average, are said to wait up to 12 months to receive a job interview invitation.
According to CELIOS, these conditions cannot be explained solely by a mismatch between workers’ skills and industry requirements. Structural problems, including nepotism, reliance on personal connections in recruitment, age discrimination and weak merit-based hiring systems, also need to be addressed.
CELIOS calls for competency-based recruitment systems across central and local government institutions, as well as state-owned enterprises (SOEs), including Danantara.
Reviving industrialisation is also considered important, particularly through the development of labour-intensive industries capable of absorbing more workers. The development of midstream and downstream industries that generate greater added value should be strengthened to ensure that the benefits of investment are not concentrated solely in capital-intensive sectors.
In addition, CELIOS advocates expanding renewable energy development involving domestic industries and local communities. The government is also urged to ensure that large-scale development programmes do not undermine small businesses and livelihoods.
