Prabowo Fires Nutrition Chief Over Corruption as Indonesia Arrests Mount, June 04

Indonesian President Prabowo Subianto fired Dadan Hindayana, head of the National Nutrition Agency, on June 3 after discovering governance failures in his flagship US$15 billion free meals programme. Hindayana was arrested the next day on corruption charges. The scandal marks the biggest graft case since Prabowo took power in late 2024 with a pledge to root out corruption. Investors worry the crisis could worsen Indonesia’s economic outlook.

What Led to the Firing

Prabowo fired Hindayana and two deputies on June 3 citing governance and food quality failures. The programme, launched in January 2025, has reached 62 million recipients but was linked to food poisoning affecting at least 33,000 children by April. State Secretariat Minister Prasetyo Hadi said the agency failed to maintain discipline in operating procedures and food safety standards. The government budgeted 268 trillion rupiah for the programme this year, down from an initial 335 trillion rupiah allocation.

Corruption Allegations and Arrests

Hindayana was arrested on June 4 along with two deputies, Sony Sonjaya and Lodewyk Pusung, on charges of crimes in programme management. Prosecutors alleged Hindayana owned foundations managing school kitchens through external parties, violating eligibility standards. He allegedly approved marked-up procurements including 21,000 electric motorbikes, 32,000 pairs of shoes, and 5,400 televisions. If convicted, the three face potential life imprisonment. Attorney General’s Office personnel raided the agency headquarters at 2am on June 4.

Economic Impact and Market Reaction

The rupiah hit a record low of 18,000 against the US dollar on June 4, and Indonesian stocks fell near five-year lows. Investors fear the scandal could trigger credit rating downgrades and breach fiscal deficit limits. A review of Indonesia’s investability is underway. The scandal also prompted broader corruption arrests, including immigration deputy minister Silmy Karim on June 4 for alleged document irregularities from 2023 to 2024.

Prabowo’s Anti-Corruption Stance Under Pressure

Prabowo said in a speech on June 3 that he would not tolerate corruption and does not want people’s money stolen. He spoke in personal terms, recalling his late father’s advice to side with the people in difficult decisions. However, he declined to comment on individuals pending investigations to avoid influencing legal proceedings. The scandal tests whether Prabowo can maintain his anti-graft pledge while protecting a welfare programme central to his economic agenda.

Final Thoughts

Prabowo’s firing of the nutrition agency head and subsequent arrests show his willingness to act on corruption, but the rupiah’s record low and stock market weakness signal investor doubt about Indonesia’s fiscal stability and programme costs.

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