In his state address, President Prabowo Subianto presented eight key government priorities for 2026:
- Food Security
The government aims for self-sufficiency in rice and corn through new farmland development, targeted fertilizer distribution, superior seeds, modern equipment, and affordable financing. A total budget of Rp164.4 trillion has been allocated, including Rp53.3 trillion for food reserves, Rp46.9 trillion for fertilizer subsidies, and Rp22.7 trillion for Bulog. - Energy Security
Plans include boosting oil and gas production, ensuring fairer energy subsidies, and accelerating the transition to 100% renewable energy power plants by 2035. Fiscal support for energy in 2026 is set at Rp402.4 trillion. - Free Nutritious Meals (MBG)
Covering 82.9 million students, pregnant women, and toddlers, the program not only improves nutrition but also strengthens MSMEs, farmers, fishermen, and livestock breeders. Budget: Rp335 trillion. - Quality Education
Education receives 20% of the state budget—the largest in history—amounting to Rp757.8 trillion. The focus includes teacher quality, vocational training, industry-aligned curricula, scholarships (PIP for 21.1 million students, KIP for 1.2 million university students), and LPDP scholarships for 4,000 overseas students. - Quality Healthcare
Priorities include strengthening the national health insurance system (JKN), revitalizing hospitals, reducing stunting and tuberculosis, and launching a Free Health Check Program (CKG). The government will cover premiums for 96.8 million poor and vulnerable citizens. Budget: Rp244 trillion. - People’s Economy & Village Cooperatives
The government will strengthen 80,000 Merah Putih Village Cooperatives with low-cost financing from state banks (Himbara). The focus is on revitalizing local economies, shortening supply chains, creating jobs, and reducing poverty. - Total Defense
Defense strategy includes modernizing weapon systems, strengthening reserve forces, and empowering the national strategic industry. Defense is viewed as not only military but also economic, social, and political resilience. - Global Investment & Trade
The economy will be driven by the state budget, Danantara, and private sector investments. Focus areas include downstreaming strategic sectors (investment value US$38 billion), the battery ecosystem, and a housing program targeting 3 million homes (770,000 units supported by the 2026 budget).
—Bisnis, August 16, 2025
Danantara Targets Rp720 Trillion Investment, Supporting 5.4% Growth in 2026
The government has set an investment target of Rp7,450 trillion to sustain 5.4% economic growth in 2026. Of this, BPI Danantara will contribute Rp720 trillion, private investment Rp6,200 trillion, and the state budget Rp530 trillion.
According to Finance Minister Sri Mulyani, investments will focus on five priority sectors: mining and coal, energy transition, energy security, agricultural downstreaming, and marine & fisheries downstreaming.
—Kontan, August 17, 2025
Prabowo: SOEs Must Contribute Minimum US$50 Billion in Dividends
President Prabowo emphasized that State-Owned Enterprises (SOEs) must enhance their contribution to the state. With assets exceeding US$1 trillion, SOEs should be able to provide at least US$50 billion in dividends annually to avoid fiscal deficits.
In his 2026 State Budget speech, Prabowo also highlighted return on assets (ROA) as a benchmark for business performance. While globally an ROA of 10–12% is considered ideal, for Indonesia, 5% is acceptable.
—Bisnis, August 15, 2025
Investment & Exports to Drive 2026 Growth
Finance Minister Sri Mulyani stated that investment and exports will be the main drivers to achieve the 5.4% growth target in the 2026 draft state budget.
- Investment: Central and regional governments will collaborate to create a more attractive business climate, supported by fiscal incentives for foreign capital, and coordinated with the Ministry of Investment & Downstreaming.
- Exports: Growth will be supported by trade agreements (IEU–CEPA, Canada CEPA, etc.), diversified global markets, and Indonesia’s advantage in critical minerals (rare earths), essential for global industries in AI and the digital economy.
—Bisnis, August 15, 2025
Indonesia Considers Sovereign AI Fund, Danantara as Main Manager
The government is considering establishing a “Sovereign AI Fund” managed by Danantara Indonesia to support its ambition of becoming Southeast Asia’s AI hub.
This follows regional trends, as Malaysia has successfully attracted billions in investment from global tech giants for cloud and AI infrastructure. As the region’s largest economy, Indonesia is preparing a national AI roadmap to attract foreign investment and strengthen competitiveness in AI and semiconductor industries.
The Sovereign AI Fund is expected to be launched between 2027–2029, using a public–private financing model. Early strategies also include fiscal incentives for domestic AI investors.
—Bisnis, August 13, 2025
Prabowo Targets 100% Renewable Energy by 2035
President Prabowo reaffirmed the acceleration of clean energy transition, targeting 100% renewable power generation by 2035—well ahead of the global 2060 target. The focus will be on solar, hydro, geothermal, and bioenergy power plants.
As of the first half of 2025, renewable capacity stood at 15.2 GW (14.5% of national installed capacity of 105 GW). Despite the relatively low share, the trend is positive, with an additional 876.5 MW in H1 2025, up 15% from all of 2024.
—Kontan, August 16, 2025
Government Allocates Rp1.5 Trillion to Absorb Farmers’ Sugar
The government, through Danantara, has allocated Rp1.5 trillion to purchase farmers’ unsold sugar. PT RNI and PT SGN will handle procurement at the set floor price of Rp14,500/kg to protect farmers.
Meanwhile, the Indonesian Sugarcane Farmers Association (APTRI) urged the government to halt ethanol imports, arguing that the new Ministry of Trade Regulation 16/2025 allowing unrestricted ethanol imports has slashed molasses prices from Rp3,000/kg last year to Rp1,500/kg. Currently, 100,000 tons of farmers’ sugar remain unsold, making government intervention vital.
—Bisnis, August 14, 2025
Prabowo Accelerates Rp618 Trillion Downstreaming Projects in 2026
President Prabowo has set an accelerated implementation of downstreaming projects worth US$38 billion (Rp618 trillion) in 2026. Earlier, Investment Minister Bahlil Lahadalia submitted pre-feasibility studies for 18 priority downstreaming projects to Danantara.
List of 18 Priority Downstreaming Projects:
- Mining & Minerals: Aluminium smelter (bauxite), DME (coal), Asphalt Buton, manganese sulfate, stainless steel slab (nickel), copper rod/wire/tube (cathode copper), steel, chemical-grade alumina (bauxite).
- Agriculture: Oleoresin (nutmeg), oleofood (palm oil), nata de coco, MCT, coconut flour, activated carbon (coconut).
- Marine & Fisheries: Chlor alkali plant (salt), tilapia fillet processing, carrageenan (seaweed).
- Energy Security: Oil refinery, oil storage tanks.
- Energy Transition: Integrated solar module (bauxite & silica), bioavtur (used cooking oil).
—Bisnis, August 15, 2025