There has been some good news, for instance, the US$3.12 billion trade surplus recorded in February 2025 and the uptick in goods exports.
However, there have been some worrying news reports, such as the Jakarta Composite Index (IHSG) plunging by more than 6 percent, the layoffs in labor-intensive industries, and the projected decline in the number of people participating in the 2025 Eid al-Fitr homecoming exodus.
Executive director of the Center of Reform on Economics (CORE) Indonesia, Mohammad Faisal, said that those market responses are a form of dynamics related to public trust in the various policies taken by the government recently.
"The community and business players, especially investors, will pay attention to various developments that will affect the safety of their investments," he explained.
Giving an example, he said that the many stock withdrawals and declines that resulted in the JCI fall show that market players perceive an increase in risk that could affect their investment.
In comparison, stock markets in other countries, especially in East Asia, have remained relatively stable.
Instead of pointing fingers, it is wiser to see these developments as a wake-up call.
"If we see various policies of the government, it is reasonable for these market players to be worried, starting from state budget deficit to budget efficiency, as well as the moves taken by the government, including the establishment of Danantara (sovereign wealth fund), whose governance is (being) questioned," he informed.
Furthermore, he said that the large Cabinet team is also considered a risk by the market.
Need for transparency
Trust is a crucial thing in the economic world.
As highlighted by the World Economic Forum (WEF), trust is important for a country to have credibility, which is needed to change economic incentives along with the behavior of businesses and citizens.
According to the WEF, countries need to trust each other to establish international treaties.
Trust that can drive economic growth can be achieved via various means, including international trade and financial development.
Trust in the market and financial system is expected to attract bigger investment.
It can also boost innovation, growth of the entrepreneurship ratio, and company productivity, which are among the main drivers of economic growth.
Building trust or rebuilding trust that may have faded slightly requires not only technical policies but also an approach that is more empathetic and open to the market and the community — parties that are directly affected by regulations devised by the government.
Executive director of the Center of Economic and Law Studies (Celios), Bhima Yudhistira Adhinegara, said that the decline in trust, which has been quite noticeable lately, may be due to policies that are not participatory and transparent.
"For that reason, first, we must restore public participation. Transparency is essential," he stressed.
Adhinegara said that each government policy must be implemented openly and transparently and communicated well to the public.
That way, it is hoped that everyone can see and give recommendations and inputs that are appropriate and full of consideration and caution.
"As long as policies are made behind closed doors, there will be speculations that distort the market," he said.
Indonesia's big target
Under the leadership of President Prabowo Subianto, the Indonesian government has set a high economic growth target of 8 percent.
To achieve this ambitious target, the right strategy and high trust are needed.
As per a recent survey by the University of Indonesia's Institute for Economic and Social Research, several policies can have a significant positive impact on Indonesia's economic growth.
They include electricity discounts (40.5 percent), elimination of bad debts of micro, small, and medium enterprises (31.0 percent), and the minimum wage increase policy and the value added tax (VAT) policy (26.2 percent).
Furthermore, Prabowo's decision to join the BRICS was seen as impactful to the economy by 9.5 percent of respondents.
Meanwhile, 2.4 percent of the respondents felt that the budget efficiency policy had less impact, and 2.4 percent felt the same about the holiday ticket discount policy.
Nevertheless, optimism must continue to be preserved, accompanied by recommendations and constructive criticism from various quarters.
"Regarding the future target, which is indeed very big, it does not mean it is impossible to be achieved; it is seen from how to achieve it — whether the way to achieve it is a breakthrough that is extraordinary without increasing the risk," he explained.
In this regard, he stressed that policy planning and coordination can have a huge impact. Thus, policy coordination is critical.
At the end of the day, policies that are based on science and empathy come from the willingness to listen rather than dismissing inputs as mere chatter.
Translator: Arnidhya Nur, Raka Adji
Editor: Aditya Eko Sigit Wicaksono
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