Indonesian Economic Alliance: Economic Growth Doesn't Lift Real Wages

The Indonesian Economic Alliance assesses that national life is increasingly distant from the vision of social justice for all Indonesian people. Therefore, seven urgent economic demands were issued on Tuesday (September 9, 2025).

One of the underlying factors for these seven urgent economic demands is the declining quality of economic growth and its lack of inclusivity, meaning its benefits are not felt by the people.

Elan Satriawan, an economist from Gadjah Mada University representing the Alliance, stated that in the 2010-2020 period before the Covid-19 pandemic, Indonesia's average Gross Domestic Product (GDP) growth was 5.4%, managing to boost average real wage growth by around 5.1%.

During the Covid-19 pandemic (2020-2022), the average annual GDP growth was 2.3%, but the average real wage growth was actually -0.9%.

"In the 2022-2024 period, after we recovered from Covid-19, although our economy grew by 5%, it only managed to boost real wages by 1.2%. So, real wages are stagnant," said Elan in an online press conference.

The following are the seven urgent economic demands, as quoted from Katadata.co.id:

1. Thoroughly rectify the misallocation of the budget and allocate funds to policies and programs in a fair and proportional manner.

2. Restore independence, transparency, and ensure there is no intervention based on the interests of certain parties in various state institutions, and restore state institutions to their proper dignity and function.

3. Stop state dominance that risks weakening local economic activity, including the involvement of Danantara, SOEs (State-Owned Enterprises), the TNI (Indonesian National Armed Forces), and the Polri (Indonesian National Police) as dominant players, thus creating an uncompetitive market and potentially eliminating local jobs, the UMKM (Micro, Small, and Medium Enterprises) ecosystem, the private sector, and social capital.

4. Deregulate policies, permits, licenses, and simplify bureaucracy that hinders the creation of a conducive business and investment climate.

5. Prioritize policies that address inequality in various dimensions.

6. Restore evidence-based policies and technocratic processes in policymaking and eradicate populist programs that disrupt fiscal stability and prudence (such as the Free Nutritious Meals program, the Merah Putih Village/Sub-district Cooperatives, rakyat schools, downstreaming, energy subsidies and compensation, and Danantara).

7. Improve the quality of institutions, build public trust, and improve the governance of state institutions and democracy, including eradicating conflicts of interest and rent-seeking.