Former VP Jusuf Kalla warns of rising state capitalism worldwide

Jakarta (ANTARA) - Indonesia's 10th and 12th Vice President Jusuf Kalla said state capitalism is gaining momentum globally, marked by stronger government intervention in economic activity and a growing shift away from globalization.

"While we have long been familiar with globalization, the world is now moving toward deglobalization," Kalla said in Jakarta on Thursday (June 4)..

Speaking at the 2026 Asia Grassroots Forum hosted by Amartha, Kalla noted that the trend toward deglobalization is closely linked to the global economic slowdown caused by conflicts and geopolitical tensions in the Russia-Ukraine region, the Middle East, and South Asia.

"We are currently facing economic difficulties. I am speaking at a time when nearly all countries are experiencing financial challenges. This economic illness extends beyond Indonesia and affects much of the world," he remarked.

The former vice president said shifts in global economic thinking tend to occur in cycles, recurring every few decades.

According to Kalla, the world is gradually moving away from globalization, which has traditionally been characterized by open trade and investment flows, as many countries increasingly adopt protectionist measures and strengthen state involvement in economic affairs.

As an example, he pointed to the United States' increasingly assertive trade policies, including higher import tariffs designed to protect domestic industries, reflecting a departure from its longstanding advocacy of free trade.

Turning to Indonesia, Kalla said the country is also seeing a greater government role in trade, citing the recent establishment of a state-owned company designated as the sole official exporter of crude palm oil, coal, and ferroalloys.

He stressed the importance of maintaining a balance between the roles of government and the private sector in supporting economic growth and stability.

The government is responsible for regulation, infrastructure development, and oversight, he said, while the private sector contributes through investment, business expansion, and job creation.

Kalla further emphasized that sustainable economic growth depends on people's income levels, which serve as the foundation for consumption and overall economic activity.

He also called for stronger support for micro, small, and medium enterprises (MSMEs) as part of efforts to strengthen the national economy against growing global uncertainty.

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Translator: Shofi Ayudiana, Tegar Nurfitra

Editor: Primayanti

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