The Many Hot Triggers Of Indonesia's Working-Class Revolt

Crucially, the protests come at a time when the country's balance sheet is under severe strain, with certain indications the nation is nearing a fiscal breaking point, while lower-income households face an intensifying cost-of-living crisis.

Recent steep cuts in central government transfers to regional authorities triggered massive local tax hikes-ranging from 250% to 1,000% in some areas-which in turn sparked violent protests. The largest so far took place in Pati, Central Java on August 13, 2025 , which saw 100,000 people take to the streets.

At first glance, the country's economic growth appears robust at around 5%, but the reality is that Prabowo inherited a government saddled with the highest nominal debt in Indonesia's 80-year post-independence history.

Indonesia's liabilities range from government securities (especially pandemic-related borrowing) to costly debt financing of social services. National debt has reached approximately 9.36 quadrillion rupiah (US$578 billion), nearly 40% of GDP. Meanwhile, the country's unstable tax base is insufficient to finance its 48 ministries' spending programs.

Instead of belt-tightening, Prabowo's administration is defiantly pushing ahead with big-ticket spending promises, such as the free school meals program, which could cost up to $30 billion annually at full scale, and a pledge to pump vast sums into the country's boondoggled savings and loans cooperatives.

Meanwhile, spending on infrastructure, health, defense, education and Indonesia's bloated bureaucracy is further stressing a balance sheet burdened by a lack of prioritization, heavy debt and widespread, rampant corruption.

To make matters worse, Sri Mulyani Indrawati, the country's longest-serving finance minister, has presided over a fiscal spending program increasingly reliant on debt financing.

In 2025 alone, Indonesia's total debt servicing – including both interest and principal – is estimated to have reached approximately 1.35 quadrillion rupiah ($83 billion). This figure is nearly half of Indonesia's central government expenditures and is unsustainable by any credible accounting.

At the coal face, this economic strain is being acutely felt by the working class. Indeed, the protests are the clearest sign yet of the pain and grievances people are enduring.

High food prices, punishing electricity bills and a cost-of-living crisis in urban centers have eroded the purchasing power of Indonesia's working class and weakened household consumption. Depleted savings amongst low-income households and small businesses further underscore the economy's fragility.

In a desperate effort to raise revenue, Sri Mulyani has sought to capture more and more of the informal sector through a relentless drive to increase tax revenues . Unfortunately, the informal sector continues to grow as the formal sector shrinks due to higher tax burdens.

The public's explosive reaction to Sri Mulyani's economic management unfolded over the past week, culminating in the raiding and looting of her home over the weekend.

Subsistence agriculture remains the fallback for those lucky enough to have access to farmland. But even in the villages, the working class faces other forms of exploitation. Illegal online gambling in Indonesia is hollowing out low-income families through frequent small-sum bets and the illusory promise of impossibly large payouts.

According to the national Financial Transaction Reports and Analysis Center (PPATK), online gambling turnover in Indonesia could exceed 1.2 quadrillion rupiah ($74 billion) in 2025, equivalent to 10 times the national budget for the country's 435,000-strong police force. Indonesia's poor are being taxed, both legally and illegally, to the breaking point.

As nationwide demonstrations rage on and Prabowo jousts with protestors with an increasingly heavy hand, some wonder if the unrest is a chaotic, yet deliberate, distraction from the country's increasingly dire economic situation.

In June, after revisions to global poverty lines, the World Bank's estimated that 68% of Indonesia's population , or 195 million people, are in low-income households on the brink of poverty.

Indonesia's working class is understandably irate that some people live far beyond the country's means while overseeing the hot mess that is the nation's finances. The waste they are forced to witness is staggering.

The abortive construction of the new national capital, the brainchild former President Joko Widodo, has already cost an eye-watering 89 trillion rupiah ($5.5 billion) and now faces the risk of being abandoned altogether.

Meanwhile, Prabowo's free school meals program threatens to drain government coffers to the tune of 1.2 trillion rupiah ($74 million) per day. This comes despite widespread complaints of food poisoning linked to the populist program's rollout.

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To rub salt into their wounds, the country's working class are confronted by members of parliament (DPR) granting themselves obscenely high salaries, benefits and entitlements. According to the Indonesian Forum for Budget Transparency (Fitra), Indonesia's 580 DPR members pay themselves approximately 230 million rupiah per month ($14,200), which is 40 times the minimum wage in the nation's capital, Jakarta.

Moreover, DPR members have access to lucrative“pork barrel” funds for constituency activities, which are often defrauded and become another source of ill-gotten gains.

Tellingly, when the protests escalated into looting and riots, the targets have not been shops and businesses owned by ethnic Chinese Indonesians, as was the case in 1998 at the height of the Asian financial crisis that ousted then-dictator Suharto after 32 years in power.

Instead, protestors have selectively targeted the homes of the most prominent DPR members who have taunted and insulted the protest movement.

Over the weekend, several homes in Jakarta were looted – often live-streamed in real time on social media – where the opulence of the residences and the luxury goods seized appeared to vindicate the protestors' demands for equality and justice.

At the same time, one of the most curious aspects of the past week of protests has been the role of the TNI. According to their own Information Centre , they have engaged with protestors with“humanistic...enthusiastic unity”, including by distributing free food and water.

Media reports of TNI members standing by idly as riots erupted have fueled rumors, speculation and conspiracy theories – further stoked by social media videos allegedly depicting undercover TNI personnel caught red-handed abetting the violence – that the military may be inciting, rather than containing, the unrest.

Not since 1998 have Indonesia's economic and political crosscurrents merged as dramatically as they have over the past week. Yet it remains unclear whether Prabowo is unwittingly prolonging a street crisis or deliberately exploiting it to create a distraction from the nation's fragile finances and deepening economic woes.

Paulus Panggabean, a long-time analyst of Indonesia's politics, economics and security, is a pseudonym.

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