Prabowo’s Biggest Crackdown on Tycoons Shocked His Own Officials

In early May, President Prabowo Subianto summoned a handful of his most trusted advisers to his house in south Jakarta to discuss how to find more revenue as surging oil prices stretched Indonesia’s finances.

The small group eventually agreed on a sweeping change that would fundamentally upend one of the most important sectors in the resource-rich Southeast Asian economy: The creation of a new state entity under sovereign wealth fund Danantara to oversee Indonesia’s world-leading exports of palm oil, coal and ferro-alloys, which together amounted to more than $65 billion last year.

Prabowo Subianto

Photographer: Bay Ismoyo/AFP/Getty Images

Prabowo had long railed against Indonesia’s tycoons, ...