Indonesia Faces Unrest Amid Protests Over Living Costs and Lawmakers' Perks

Indonesia is currently experiencing one of its most significant waves of protests in years, primarily driven by public outrage over rising living costs, stagnant wages, and controversial financial perks for lawmakers. The unrest escalated dramatically following the death of a motorcycle taxi driver, Affan Kurniawan, who was struck by a police armored vehicle during a protest in Jakarta on August 28, 2025. This incident triggered widespread demonstrations across major cities, including Jakarta, Yogyakarta, Bandung, and Makassar, leading to violent clashes that have resulted in at least eight fatalities and hundreds of injuries.

Embassies in Indonesia warn travelers of spreading violence

The protests began as peaceful rallies against a proposed housing allowance for lawmakers, which was perceived as excessive—approximately 10 times the national minimum wage. As public discontent grew, the demonstrations evolved into broader calls for accountability and police reform, reflecting deep-seated frustrations with the political establishment.

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The unrest has significantly impacted Indonesia's financial markets. The Jakarta Composite Index fell by as much as 3.6% on September 1, 2025, while the Indonesian rupiah weakened to 16,500 against the U.S. dollar, marking its lowest level since early August. Analysts suggest that the market reaction is largely sentiment-driven, with investors concerned about the political instability rather than the underlying economic fundamentals, which remain relatively stable.

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Bank Indonesia has intervened in both the foreign exchange and bond markets to stabilize the currency and mitigate the impact of the protests on investor confidence. Economists from OCBC and DBS have indicated that the rupiah's weakness may be temporary, contingent on the government's ability to address public grievances effectively.

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In response to the escalating violence, President Prabowo Subianto announced cuts to lawmakers' benefits and a freeze on overseas parliamentary travel in an attempt to quell public anger. However, his administration has also adopted a firm stance against the protests, labeling some actions as bordering on treason and terrorism. This dual approach has drawn criticism from civil society and student leaders, who argue that the concessions do not adequately address the broader issues of systemic corruption and police violence.

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Amnesty International has condemned the government's labeling of protesters as criminals, emphasizing that such rhetoric ignores the legitimate concerns driving the demonstrations. Despite the government's efforts to restore order, many protesters remain determined to continue their calls for comprehensive reforms.

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Critics of President Subianto's administration highlight the disconnect between the political elite and ordinary citizens, exacerbated by rising taxes and economic hardships. The protests have become a rallying cry for those demanding accountability from their leaders, with calls for the dissolution of parliament gaining traction among demonstrators. Student leaders have expressed concerns that the government's response may further inflame public sentiment rather than resolve the underlying issues.

Indonesia Plunges Into Days of Chaos

As protests continue, the Indonesian government faces mounting pressure to implement further reforms while maintaining order. The situation remains fluid, with the potential for renewed violence if public demands are not adequately addressed. Analysts suggest that the government's ability to balance firm governance with responsiveness to citizens' needs will be crucial in determining the future stability of Indonesia's political landscape.

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• “People’s purchasing power is low, and we are struggling here,” — Winarta, Protester

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• “The president’s statement is insensitive to all the grievances and aspirations the public has voiced during the demonstrations.” — Syamry, Student Leader

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The unfolding events in Indonesia underscore the fragility of its political climate and the urgent need for reforms to address the growing discontent among its citizens.

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