Jakarta has been engulfed by waves of demonstrations since Thursday (August 28, 2025). Initially, the protests took place peacefully in front of the Parliament Building (DPR), but later escalated into clashes at several points around Senayan and Pejompongan, Jakarta.

The situation grew more intense on Friday (August 29) after an online motorcycle taxi (ojol) driver was hit and run over by a tactical vehicle (rantis) belonging to the Mobile Brigade (Brimob) on Thursday night.

This condition has raised concerns about potential disruptions to Jakarta’s economy and fears of a repeat of the May 1998 riots.

Economists' Reactions

Economist and Executive Director of CELIOS, Bhima Yudhistira Adhinegara, stated that the current situation is heading toward a pre-economic crisis if the government fails to address public demands promptly.

“The current situation is moving toward a pre-crisis stage if the government does not respond quickly. It could even be worse than 1998 because the recovery path resembles an L-shape, where weaknesses occur across all sectors and recovery could take a long time,” Bhima told detikcom, Friday (August 29, 2025).

Bhima suggested that the government should immediately form an independent team to address public demands.

Proposals from Bhima:

1. Tax reform to ensure fairness. The heavy burden on the middle and lower-income groups must be reduced. VAT should be lowered to 8% to maintain purchasing power. Wealth tax discussions must be expedited, and tax leaks from extractive industries must be closed instead of targeting small traders.

2. Formation of a remuneration committee to oversee salaries and allowances for high-ranking officials. Exemptions on income tax for DPR members and excessive allowances must be stopped. The committee should consist of independent parties.

3. Cabinet reshuffle, particularly within the economic team, which is considered to lack a sense of crisis.

4. Comprehensive revision of the 2026 State Budget (APBN), halting excessive efficiency cuts in regional budgets, and reducing defense and security spending.

Other Economic Perspectives

Paramadina University economist, Wijayanto Samirin, said the impact of the demonstrations on Jakarta and Indonesia depends greatly on how the Government and Parliament respond.

“The impact on Jakarta and Indonesia depends on the Government and Parliament’s response. If they listen to public demands, sincerely apologize, and commit to making concrete improvements, the conflict will subside and the economy will remain relatively stable,” Wijayanto explained.

Conversely, an arrogant stance will worsen the situation.

“If they remain arrogant, flaunt their wealth, act self-righteous, and focus on ivory tower programs that fail to meet public needs, the disconnect with the people will widen, worsening the situation,” he added.

Wijayanto, however, believes the current conditions are still far from the 1998 crisis level, though significant economic disruptions are inevitable.

“I believe we are still far from a 1998-level crisis. Nevertheless, serious disruptions to the economy are likely to occur,” he said.

He emphasized the need for the government and parliament to craft policies seriously. Statistical manipulation should be stopped, incompetent officials replaced, and simplicity adopted as a lifestyle for elites.

“Policies on excessive allowances must be revised, statistical manipulation must end, problematic officials must be replaced, and simplicity should be embraced. Unfortunately, many elites still flaunt their wealth while the people struggle,” Wijayanto concluded.