We discussed economic matters only.
In the shadow of a weakening rupiah and whispered cabinet reshuffles, President Prabowo Subianto gathered Indonesia's National Economic Council in early June to confront the quiet pressures bearing down on ordinary households. Currency depreciation is rarely an abstraction for long — it finds its way into the price of food, the stretch of a paycheck, the anxiety of a family already living close to the edge. The council came not merely with warnings but with a philosophy: that fiscal discipline, digital modernization, and honest governance are not separate remedies but a single posture a state must adopt to earn the trust of its people.
- The rupiah's slide to Rp18,201 per dollar is not a number on a screen — it is a coming price increase that the lower middle class will absorb first and hardest.
- Advisors urged the president to cut funding for flagship programs like the Free Nutritious Meal initiative, arguing that visible fiscal restraint is itself a form of governance that rebuilds public confidence.
- An independent survey exposed a troubling concentration in the meal program's supply chain — 87 percent of outlets relying on a single small supplier, signaling systemic inefficiency that spending alone cannot fix.
- Nearly 80 percent of government digital services have now been linked across eight ministries, with AI integration underway — a quiet infrastructure bet that the administration hopes will sharpen every policy decision going forward.
- Rumors of a cabinet reshuffle shadowed the meeting, but officials insisted the agenda was purely economic, leaving the question of political motive unresolved and hanging in the air.
On a Tuesday in early June, President Prabowo Subianto summoned the National Economic Council — led by Luhut Binsar Pandjaitan and including former Finance Minister Muhammad Chatib Basri — for a briefing on Indonesia's macroeconomic condition. The timing was charged: the rupiah had been sliding, and rumors of cabinet changes were circulating. The council arrived with both warnings and proposals.
The currency had reached Rp18,201 per dollar by June 8, a depreciation with concrete consequences. Chatib Basri stressed that the council had prepared a special report to help the president understand how exchange rate weakness travels downstream — into import costs, food prices, and the daily budgets of lower-middle-class households who feel the pressure before anyone else does.
The advisors also recommended trimming the budget for large-scale programs, particularly the Free Nutritious Meal initiative known as MBG. Chatib framed this not as austerity but as a signal of seriousness — a government willing to make hard choices earns trust. An independent survey the council had conducted found that nearly 87 percent of meal outlets depended on a single small supplier, with only about three SMEs engaged per outlet on average. The concentration pointed to inefficiency that better governance, not just more funding, could address.
On a broader front, the council noted that nearly 80 percent of government digital services had been connected across eight ministries as of June 1, with AI integration underway to improve data aggregation and public service delivery. Luhut described this digital infrastructure as foundational to the administration's long-term capacity to govern well.
The meeting was officially described as purely economic by both the Presidential Palace and Chatib himself, even as speculation persisted about whether it masked preparations for a cabinet reshuffle. Whatever the full truth, the council's message was coherent: stabilize the currency, discipline spending, fix the programs that exist, and build the digital backbone that makes better decisions possible.
President Prabowo Subianto called in his economic advisors on a Tuesday in early June, summoning the National Economic Council and its chair, Luhut Binsar Pandjaitan, along with several key members including former Finance Minister Muhammad Chatib Basri. The meeting was framed as purely economic in nature—a chance for the council to brief the president on the state of Indonesia's macroeconomic health and offer strategic recommendations. But the timing mattered. The rupiah had been sliding against the dollar, and rumors were circulating about possible cabinet changes. The council came prepared with warnings and proposals.
The rupiah had weakened to 18,201 per dollar by June 8, a depreciation that carried real consequences for ordinary Indonesians. Chatib Basri explained that the council had prepared a special report on the macroeconomic situation and wanted the president to understand the risks. Currency weakness doesn't stay abstract—it flows directly into the cost of living. When the rupiah falls, imported goods become more expensive. Food prices rise. The lower middle class, already stretched thin, feels it first. The council wanted Prabowo to grasp this connection and act accordingly.
Beyond the currency warning, the advisors came with a specific proposal: cut the budget for large-scale government projects. They singled out the Free Nutritious Meal program, known locally as MBG, as a candidate for efficiency measures. Chatib framed this not as austerity for its own sake but as a way to rebuild public confidence in government. When people see the state making hard choices about spending, he suggested, they trust it more. Budget discipline becomes a signal of seriousness. The council believed trimming the MBG program could serve that purpose.
But the council wasn't simply recommending cuts without understanding the program's mechanics. Luhut mentioned that the DEN had also discussed evaluating how the MBG program actually functioned—its governance structure, its supply chains, the way meals reached students. Septian Hario Seto, another council member, revealed that the institution had conducted an independent survey of the program's implementation. What they found was a supply chain concentrated in very few hands. Nearly 87 percent of the meal outlets worked with just one small supplier. On average, only three small and medium enterprises were engaged per outlet. This concentration suggested inefficiency, waste, or both. Fixing the governance could mean better outcomes with less money.
The council also highlighted a broader modernization effort. As of June 1, nearly 80 percent of government digital services—what officials call govtech—had been connected across eight ministries and agencies. These systems were being integrated with artificial intelligence to aggregate data more effectively. Luhut, a former coordinating minister, saw this as foundational to the Prabowo administration's future. If government data could be properly consolidated and analyzed, decision-making would improve. The council was essentially telling the president that investing in digital infrastructure and AI integration would pay dividends across all policy areas.
One question hung over the meeting: Was this really just about economics, or was it cover for something else? Rumors had circulated that Chatib Basri himself might be tapped to replace the state treasurer, Purbaya Yudhi Sadewa. If the president was considering reshuffling his cabinet, why call in the economic council? Deputy House Speaker Sufmi Dasco Ahmad said he had received confirmation from the Presidential Palace that the meeting was purely about economic strategy and growth. Chatib himself affirmed the same. "We discussed economic matters only," he said. Whether that was the complete truth or a diplomatic answer, the council's recommendations were clear: stabilize the currency, tighten spending on large programs, improve how those programs actually work, and accelerate the digital transformation of government. The rupiah's weakness had forced the issue. Now the administration had to decide whether to act on the advice.
Citações Notáveis
One of the important issues to be considered is the possibility of price increases due to Rupiah weakening.— Muhammad Chatib Basri, National Economic Council member
In the upcoming Prabowo administration, govtech will be an important part because all data will be well aggregated.— Luhut Binsar Pandjaitan, National Economic Council Chair
A Conversa do Hearth Outra perspectiva sobre a história
Why did the president need to call this meeting now, specifically? The rupiah has been weakening for months.
The timing suggests urgency. At 18,201 per dollar, the depreciation had reached a point where it was no longer theoretical—it was starting to hit household budgets. The council wanted to make sure the president understood the cascade of consequences.
The council recommended cutting the Free Nutritious Meal program. That's a flagship social program. Why that one?
It's not that they want to eliminate it. They want to make it more efficient. The survey showed the supply chain was concentrated—87 percent of outlets using a single supplier. That's waste built into the system. Cut the waste, not the meals.
But cutting any budget for a social program during economic weakness seems counterintuitive. Wouldn't people need more support?
The council's argument was different. They said budget discipline itself builds confidence. If people see the government making tough choices and eliminating waste, they trust the institution more. That trust becomes its own form of economic stimulus.
What about the govtech integration they mentioned? How does that connect to the immediate crisis?
It's the longer view. They're saying that if government can aggregate data properly using AI, it can target help more effectively. You spend less money but reach the right people. It's efficiency at scale.
And the cabinet reshuffle rumors—were those really off the table?
Both Chatib and the deputy speaker said yes. But calling in a former finance minister when you're considering replacing your treasurer is at least worth noticing. The official story is that it was purely economic advice. That may be true. Or it may be that the economic discussion was the real business, and the other conversations happened separately.
What happens next if the president takes this advice?
The rupiah stabilizes or doesn't—that's partly out of his hands. But if he moves on the MBG governance reforms and accelerates govtech integration, you'd see a different government operating underneath. More data-driven, more efficient, less room for corruption or waste. That's the real change they're proposing.