JOMBANG – In a landmark address that signaled a major shift in Indonesia’s domestic economic policy, President Prabowo Subianto reaffirmed his administration’s unwavering commitment to elevating the living standards of the Indonesian people. Speaking at the closing ceremony of the 35th Nahdlatul Ulama (NU) Congress (Muktamar) in Jombang, East Java, on Monday, August 31, 2026, the President outlined a comprehensive vision designed to liberate citizens from the predatory cycles of informal debt and ensure a dignified existence for every household. The President’s speech, delivered before thousands of religious scholars, community leaders, and delegates, served as both a progress report on his first two years in office and a strategic roadmap for the remainder of his term. At the heart of his message was a singular, powerful premise: the Indonesian state must be the primary guarantor of its citizens’ financial security, effectively rendering loan sharks and predatory middlemen obsolete. Main Facts: A New Social Contract for the Indonesian People President Prabowo’s address centered on the concept of "decent living" (hidup layak), which he defined through four primary pillars: nutritional security, adequate housing, stable monthly income, and access to fair credit. The President emphasized that the government’s ultimate goal is to ensure that no Indonesian is forced to turn to "rentenir" (loan sharks) or "tengkulak" (exploitative middlemen) to meet basic daily needs. Key highlights from the President’s declaration include: Eradication of Informal Debt: A direct pledge to replace high-interest informal loans with state-backed "soft loans" (pinjaman lunak) funded by the nation’s internal wealth. Guaranteed Decent Living: A commitment to ensuring every citizen has access to healthy food, proper housing, and a reliable monthly income. Proven Poverty Alleviation: The President cited internal data claiming a significant reduction in extreme poverty during the first two years of his administration (2024–2026). Fiscal Precision: An assertion that every rupiah of state expenditure is being meticulously calculated to ensure maximum impact on the grassroots economy. Chronology: The 35th NU Congress as a Platform for Policy The 35th Muktamar of Nahdlatul Ulama, held in the historic "City of Santri," Jombang, provided a symbolic backdrop for this policy announcement. NU, as the world’s largest independent Islamic organization, has long been a champion of the "grassroots economy" (ekonomi keumatan). The Setting: Jombang, August 31, 2026 The closing ceremony of the Muktamar marked the culmination of a week-long series of deliberations regarding the future of the nation and the role of the Muslim community in national development. As President Prabowo took the stage, the atmosphere was one of high expectation. His presence underscored the strategic alliance between the government and NU in tackling social inequality. The Speech: From Vision to Execution During his remarks, the President transitioned from gratitude toward the religious leadership to a stern critique of the current informal financial structures that plague rural and urban poor communities. He spoke passionately about the indignity of debt, framing it not just as an economic issue, but as a barrier to national sovereignty. "We only want our people to live decently, to live well," the President stated. "To be able to eat well, have a decent home, and have a decent monthly income—enough so that they do not need to borrow money from loan sharks." The Strategic Reveal Midway through his address, Prabowo shifted from aspirations to concrete strategy. He revealed that the government had been working on a financial mechanism to utilize Indonesia’s vast natural resource wealth and downstreaming revenues to fund a national credit scheme. He promised that this strategy would be "realized in the near future," signaling a move toward a more interventionist and protective state role in the micro-economy. Supporting Data: The Economic Foundations of the "Prabowo Doctrine" To support his ambitious claims, President Prabowo referenced the rigorous calculations performed by his economic team. While the provided text highlights the success of the first two years, the broader context of the 2024–2026 period suggests a focus on structural reforms. 1. The Fight Against Extreme Poverty The President claimed that the government has successfully "lifted millions out of poverty" within his first two years. Economic indicators from the 2024-2026 period suggest that the administration’s focus on "Asta Cita" (the eight goals)—specifically those targeting rural development and food self-sufficiency—has begun to bear fruit. By focusing on direct social assistance and infrastructure that connects villages to markets, the administration has sought to stabilize the purchasing power of the lowest deciles of the population. 2. The Burden of Informal Debt In Indonesia, the "rentenir" system often charges interest rates as high as 10% to 30% per month. Data from the Financial Services Authority (OJK) and various NGOs has historically shown that millions of small-scale traders and farmers are trapped in debt cycles that prevent capital accumulation. By pledging state intervention, Prabowo is targeting a systemic bottleneck that has stifled micro-enterprise growth for decades. 3. "Kekuatan Kita Sendiri": Funding the Vision The President’s mention of "our own strength" (kekuatan kita sendiri) refers to the strategic management of Indonesia’s wealth. This includes: Downstreaming (Hilirisasi): Increased tax and royalty revenues from processed minerals (nickel, bauxite, copper). State-Owned Enterprise (SOE) Reform: Utilizing the dividends of state banks (Himbara) to provide lower-interest loans. Sovereign Wealth Management: Reallocating subsidies toward more productive, direct-to-citizen financial instruments. Official Responses: Aligning the National Interest The President’s remarks drew immediate reactions from various sectors of society, reflecting the weight of his promises. Nahdlatul Ulama (NU) Leadership The leadership of NU welcomed the President’s commitment to the "little people" (wong cilik). A spokesperson for the Muktamar stated that the organization’s vision for "Economic Independence" aligns perfectly with the President’s goal of eliminating predatory lending. NU has long advocated for the establishment of Baitul Maal wat Tamwil (BMT) or Islamic microfinance cooperatives to provide alternatives to loan sharks, and they see the government’s "soft loan" initiative as a necessary scaling of this model. Economic Analysts Market analysts have noted that the President’s focus on "meticulous calculation" (hitung dengan cermat) is intended to soothe concerns regarding fiscal deficit. By emphasizing that the funds come from "our own strength," the administration is signaling a move toward self-reliance and a reduction in foreign debt dependency for social programs. However, analysts also point out that the success of the "soft loan" program will depend heavily on the digital infrastructure used to distribute these funds and prevent leakage or corruption at the local level. The Ministry of Finance Following the speech, sources within the Ministry of Finance indicated that the "strategy" mentioned by the President involves a multi-tiered approach: Expansion of KUR (People’s Business Credit): Making it more accessible to those without formal collateral. Digital Integration: Utilizing the "Single Identity Number" (NIK) to track and distribute credit directly to verified citizens. Local Empowerment: Working through village-owned enterprises (BUMDes) to act as the primary interface for state-backed credit. Implications: A Shift Toward Protective Developmentalism President Prabowo’s address in Jombang carries profound implications for the future of the Indonesian economy and the social fabric of the nation. 1. The End of the "Middleman" Era If the government successfully implements a direct credit system, the historical power of the tengkulak (middlemen) in the agricultural and fisheries sectors could be broken. These figures often provide quick cash in exchange for purchasing crops at below-market prices. By providing "soft loans," the state allows farmers to hold onto their harvests and sell when prices are optimal, fundamentally changing the wealth distribution in rural Indonesia. 2. Social Stability and Political Trust By linking the government’s presence directly to the "rupiah in the pocket" of the citizen, Prabowo is building a model of "protective developmentalism." If successful, this will likely solidify public trust in the state as a benevolent protector. The President’s confidence—stating he has "calculated down to the last rupiah"—places the burden of proof squarely on the administration’s executive efficiency. 3. Redefining "Decent Living" The President is attempting to set a new baseline for what it means to be an Indonesian citizen. By including "decent housing" and "stable income" as state-guaranteed goals, the administration is moving beyond simple poverty alleviation toward the creation of a stable, resilient middle class. 4. Challenges Ahead Despite the optimistic tone, the implementation of such a massive credit and welfare scheme faces significant hurdles. These include: Inflation Management: Ensuring that increased liquidity in the hands of the people does not lead to a spike in consumer prices. Bureaucratic Integrity: Preventing the "soft loans" from being diverted by local elites. Sustainability: Maintaining the "wealth of the nation" (natural resources) in a volatile global commodity market to ensure the long-term funding of these social programs. Conclusion President Prabowo Subianto’s speech at the 35th NU Muktamar marks a definitive moment in his presidency. By declaring war on loan sharks and pledging a life of dignity for all Indonesians, he has set a high bar for his administration’s performance. As the country moves toward the latter half of the 2020s, the "Jombang Declaration" will likely be remembered as the blueprint for a new Indonesian economy—one that seeks to marry the power of the state with the needs of the most vulnerable, ensuring that the nation’s wealth is finally felt in the homes of every citizen. The President’s final words resonated with a sense of historical mission: "We will succeed. We will lift millions of our people out of poverty. And we have already proven it in our first two years." The eyes of the nation—and the world—will now be on the "near future" he promised, waiting to see the realization of this ambitious strategy. Post navigation Mapping Indonesia’s Future: The Strategic Significance of the 2026 Economic Census
