Jakarta – Indonesia’s pursuit of an 8 percent economic growth rate, a key ambition of President Prabowo Subianto’s administration, is raising concerns about potential environmental damage and increased social inequality, according to the Indonesian Forum for the Environment (Walhi).
Growth Target and Economic Realities
President Subianto, who took office in October 2024, has publicly stated his goal of achieving 8 percent gross domestic product growth by the end of his term in 2029. However, this target has been met with skepticism from economists. Bank Indonesia (BI) Governor Perry Warjiyo recently projected a growth rate of 4.9 to 5.7 percent for the current year.
Environmental Concerns
Walhi warns that prioritizing high economic growth could lead to an ecological crisis, citing government policies that have encouraged large-scale extractive industries. The group specifically highlighted plans to open oil palm plantations in Papua and the ongoing “food estate” project, a national strategic project (PSN) aimed at food self-sufficiency. Walhi describes the food estate as the country’s “largest project to legalize deforestation,” potentially opening up over 2 million hectares of forest.
Deforestation was identified as a contributing factor to deadly floods and landslides in Aceh, North Sumatra, and West Sumatra last November. While the government revoked permits for 28 companies allegedly linked to the disasters, questions remain regarding environmental recovery efforts.
Concession Risks
Currently, 26 million hectares of Indonesia’s natural forests are located within business concessions, with 9 million hectares designated for mining. Walhi warns that if companies begin operating within these concessions to meet the 8 percent growth target, it could result in “massive legalization of deforestation.”
Social Equity Concerns
Walhi also argues that the pursuit of 8 percent growth is not necessarily translating into improved economic conditions for all Indonesians. Walhi executive director Boy Even Sembiring stated that achieving a prosperous Indonesia requires recognizing marginalized communities, ensuring environmental protection, and distributing incentives equitably.
The Environment Ministry stated its focus for 2026 includes implementing environmental protection and management planning under Government Regulation (PP) No. 26/2025. Deputy Environment Minister Diaz Faisal Malik Hendropriyono expressed confidence in August 2025 that sustainable development and 8 percent economic growth are not mutually exclusive, stating it is “neither impossible nor an oxymoron.”
Frequently Asked Questions
What is the “food estate” project?
The “food estate” is a national strategic project (PSN) aimed at achieving food self-sufficiency in Indonesia, projected to open up more than 2 million hectares of forest.
How much deforestation occurred in 2025?
Nationwide, approximately 283,000 hectares of deforestation were recorded in 2025, four times the size of Jakarta, an increase from 217,000 hectares in 2024.
What is Walhi’s primary concern regarding the 8 percent growth target?
Walhi’s primary concern is that the pursuit of 8 percent economic growth could accelerate environmental degradation and widen social injustice, potentially pushing vulnerable communities further to the margins.
Given the potential trade-offs between economic growth and environmental sustainability, how might Indonesia balance these competing priorities in the years ahead?
