The strengthening of the state's role in domestic business activities is currently in the spotlight, following steps by President Prabowo Subianto's administration to launch various new strategic entities. The establishment of PT Danantara Sumber Daya Indonesia (PT DSI) for the management of export commodities and the Merah Putih Village/Sub-district Cooperative are clear evidence of a more interventionist economic policy direction in pursuit of the target for national economic growth of 8 percent.
This policy has sparked a warm debate among economists regarding the ideal limit of government involvement in the market. On one hand, this step is considered crucial for driving economic transformation and improving the governance of state assets, which were previously fragmented. On the other hand, there are concerns that excessive dominance could restrict the space for the private sector and undermine fairness in the business competition climate.
Economic observer from Andalas University, Syafruddin Karimi, explained that state intervention actually has strong legitimacy in sectors experiencing market failure, such as the provision of basic infrastructure, food security, energy, as well as healthcare and education services. However, he warned of a high risk of conflict of interest if the state acts simultaneously as regulator, business owner, licensor, and buyer.
Syafruddin added that the privileges often obtained by State-Owned Enterprises (SOEs) in terms of funding access and regulation have the potential to trigger inefficiencies and cause foreign business players to flee. According to him, market players are willing to accept the state's presence as long as the rules of the game are consistent, transparent, and non-discriminatory towards private competitors.
Echoing this sentiment, Center of Economic Reform (CORE) Indonesia economist Yusuf Rendy Manilet assessed that the success of the "Prabowonomics" economic model will heavily depend on the quality of governance of the newly established institutions. He highlighted that large institutions like Danantara must implement international transparency standards to build market confidence and avoid the risk of crony capitalism.
Ultimately, the ideal role of the state is as a strong regulator and investment catalyst, not as a monopoly replacing market roles that already run efficiently. This healthy limit of intervention must be strictly maintained so that the acceleration of development does not sacrifice a competitive and accountable business climate.
