Indonesia is currently facing one of its most critical economic issues: the persistent outflow of national wealth. A substantial portion of Indonesia’s generated economic wealth is stored and utilized overseas. Wealth for a nation is like blood for a body; right now, Indonesia is hemorrhaging financially, a condition that has persisted for decades. If we extend this analogy back to the colonial period, it amounts to centuries of economic bleeding. Those familiar with my longstanding views know that I have consistently highlighted how Indonesia’s wealth leaks out of the country every year—it doesn’t stay within our borders. Effectively, all Indonesians are involuntarily working as laborers for others; we exert ourselves in our homeland only to bolster the prosperity of foreign nations. We are like tenants in our own house. Historically, during the Dutch East India Company (VOC) era, the outward flow of our wealth was starkly evident, prompting challenges from the earlier Generation of ’45. The VOC was the most valuable company in economic history. At that time, economic growth in the Indonesian region was exceptionally high, possibly among the highest globally, yet the profits were banked in the Netherlands. Today’s circumstances are akin to those of the past but are less overt, which makes them harder to detect. Those who are aware of this situation often choose silence or have resigned themselves to this reality. Some even facilitate the outward flow of our wealth. To track how Indonesia’s wealth is drained abroad, we can look at several economic indicators: Firstly, the trade balance of our nation, particularly the ownership structures of exporting companies. Secondly, records of deposits in foreign banks belonging to Indonesian entrepreneurs and companies, as well as foreign firms that profit in Indonesia but keep their earnings overseas. I started analyzing Indonesia’s export-import ledgers from 1997 while I was in Jordan, keen to grasp the actual state of our economy. Reviewing the period from 1997 to 2014, it turns out that over these 17 years, our total exports amounted to USD 1.9 trillion, yielding a trade surplus of roughly IDR 26.6 trillion, using an exchange rate of IDR 14,000. This figure is quite substantial. However, it is crucial to note that these are the amounts reported in export documents. They might not accurately reflect the real value of exports. According to insights from many exporters and studies conducted by reputable research organizations, these figures could be underreported by 20%, 30%, or even up to 40%. The Global Financial Integrity estimates that export leakages due to trade misinvoicing, or “errors” in recording the value and volume of exports, amounted to USD 38.5 billion in 2016, equivalent to approximately IDR 540 trillion or 13.7% of total trade. From 2004 to 2013, the total leakage from these “errors” reached USD 167.7 billion—equivalent to about IDR 2.3 quadrillion at an exchange rate of USD 1 = IDR 14,000. Furthermore, upon investigation, it became evident that much of our profit does not stay domestically. Thus, I was not surprised when in August 2016, the Finance Minister revealed that about IDR 11,400 trillion owned by Indonesian entrepreneurs and companies was parked overseas. This amount is 5 times greater than our current national budget and roughly equal to our Gross Domestic Product (GDP). In addition to unreported or misreported exports by our entrepreneurs, the majority of Indonesia’s export profits go to foreign companies with accounts abroad. This occurs because most of the value from our exports is controlled by foreign companies operating in Indonesia. These companies sell Indonesia’s natural resources. They use our roads, ports, and the labor of our people. Yet, when they profit, they do not keep their earnings in Indonesia. Moreover, some Indonesian entrepreneurs who engage in export and business activities here also choose to store and transfer some of their profits abroad. This is a significant problem for our nation. If this money does not stay in Indonesia, it cannot be used to build our country. Our banks do not have enough capital to provide loans that could stimulate our economy. The expected economic multiplier effect that could invigorate Indonesia’s economy does not occur. Is this a new problem? Looking back, it appears that the outflow of Indonesian wealth has been an issue for centuries. This is a systemic problem that we need to recognize and address. If we look back to the 1950s, except during periods of upheaval, Indonesia’s export-import activities were profitable. But who benefited from these profits? When we look back at Sukarno’s speech “Indonesia Menggugat,” it becomes clear that he addressed the very same issues. Whereas I reference figures in US dollars and Rupiah, Sukarno used the Guilder in his arguments. The core issue Sukarno highlighted was the outward flow of our wealth, a persistent problem he eloquently detailed in his writings: “For imperialists, Indonesia was unparalleled—a paradise unrivaled anywhere in the world for its sheer allure. “By around 1870, the gates had been thrown open. As if driven by an increasingly fierce wind, a flood-swelling river, or the thunderous roar of an army conquering a city, the Dutch East Indies were transformed following the Dutch Staten-Generaal’s approval of the Agrarian Laws and the Sugar Act of De Waal in 1870. This led to an influx of private capital into Indonesia, spawning sugar factories, tea and tobacco plantations, and a range of other ventures including mines, railways, tramlines, shipping, and diverse manufacturing operations. “For the Indonesian people, the post-1870 changes were simply a new method of resource extraction. To them, old and modern imperialism were indistinguishable—both were just means of siphoning Indonesian wealth overseas, continuing the pattern of economic exploitation.” I recently encountered a study that revealed Dutch official records from 1878 to 1941. These documents detailed the profits from Indonesian exports, Dutch savings in Indonesia, and the budgets allocated for the Dutch colonization efforts. This study showed that over a span of 63 years, the Dutch accumulated profits amounting to 54 billion Guilders. At that time, this sum was equivalent to USD 22 billion. Adjusted for today’s values, that would be roughly USD 398 billion, amounting to as much as USD 5.123 billion today — equivalent to IDR 66.599 trillion. Bung Karno once criticized this massive outflow of our wealth, which he saw as capital flight from Indonesia. As someone not formally educated in economics, I refer to this as the “net outflow of national wealth”—an excessive leakage of our country’s financial resources. I’ve often been questioned about the weak Indonesian currency and the volatile prices of basic necessities. The answer, though straightforward, seems to be something many Indonesian elites and economic experts are hesitant to discuss openly. I have consistently stated that our national wealth does not remain within Indonesia. This is a fundamental problem. We let our riches be siphoned off to other countries. Under such conditions, how can we expect our economy to thrive? How can prices remain stable for our citizens if our wealth continues to flow outward? I apologize if my words are blunt. Some advise me to “only highlight the positives,” while others suggest, “Mr. Prabowo, please tone it down. Speak gently.” Over the past 15 years, whenever I’ve had the opportunity to present data, I’ve asked my audience: “Do you want me to speak nicely, or do you want the unvarnished truth? Do you prefer polite, comforting words or the stark reality?” They always respond, “Just tell it like it is, Mr. Prabowo.” In my opinion, Indonesia’s elites have not conveyed what truly happened. They have not been transparent to the people. Why are the poor increasingly marginalized? Why do the rich get richer in Indonesia, and the poor get poorer? Why don’t our farmers smile at harvest time? How is it possible that in a country that has been independent for over 75 years, there are still contract teachers earning just IDR 200,000 a month? Even though there is now direct aid from Central and Regional Governments, it is still far from sufficient. How can this be? How is it that most of our national profits flow overseas while the elite remain silent? Tens of thousands of trillions of Rupiah that should be in Indonesia are parked abroad, yet the Indonesian elites are not striving hard to repatriate these funds.
