Jokowi: Indonesia’s Best Chance?

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Jokowi: Indonesia’s Best Chance?

Anthony Fensom and Colin Brown discuss Jokowi’s prospects for reforming Southeast Asia’s largest economy.

Jokowi: Indonesia’s Best Chance?
Credit: REUTERS/Darren Whiteside

Indonesia’s next president, Joko “Jokowi” Widodo will be inaugurated in October, now that nation’s Constitutional Court rejected a challenge to the election result from rival candidate Prabowo Subianto.

The Diplomat’s Anthony Fensom spoke to Indonesian analyst, Griffith University Adjunct Professor Colin Brown, on whether the self-made businessman and Barack Obama-style “man of the people” can deliver on reform expectations for Southeast Asia’s largest economy and the world’s fourth-most populous nation.

Jokowi has been described as foreign investor-friendly, is that your view?

Compared with [former army general] Prabowo, certainly. That’s what the market sees. He’s someone who for a start has been a genuine businessman in his own right, who built a company from the ground up, who’s made it domestically and in international business. As far as I’m aware, this is the first Indonesian president who’s ever done that.

The fuel subsidy is the biggest fiscal issue for the Indonesian government – what are you expecting from Jokowi in this area?

Jokowi is going to make decisions which many of his supporters don’t like; I think he’s got the political legitimacy to get away with some of those. Clearly, the fuel subsidy cannot be maintained. Looking at the current budget, it shows something like 20 percent of central government expenditure goes on the fuel subsidy alone, and if you add in electricity and so on, it’s about 33 percent. Everybody acknowledges that that’s not sustainable, but the political cost of reducing it is high. Jokowi has got the political legitimacy to be able to do that and pull it off.

Prabowo currently has a bigger parliamentary coalition – could that change with Jokowi now confirmed as president?

Yes. Coalitions in Indonesia tend to be single-issue coalitions. Those parties lined up behind Prabowo only on the issue of winning the presidential election, and even if he had won, that coalition wouldn’t necessarily have stayed together. We’ve already seen that Golkar is seriously split…its support for Prabowo was manipulated by its current chair.

[Jusuf] Kalla, who is Jokowi’s vice-president, is a former head of Golkar and several other parties are clearly wavering. You’re in politics to achieve things, and you can’t achieve much if you stand behind the guy who’s lost. So I think you’ll find there will be continued splintering of the Prabowo coalition, but that doesn’t mean that Jokowi’s coalition will support him on all issues. There will be a constant series of negotiations on virtually every major legislative initiative he wants to take.

Will that make reform difficult for Jokowi?

Reform is always difficult in the Indonesian context, precisely for this reason. Political power has been so dispersed, and you have to scratch so many backs. My contention would be that Jokowi has significantly reduced two things: firstly his debt to the political parties – he’s nowhere near in debt to the other parties as other candidates have been, politically and financially. He won despite [party leader] Megawati, not because of her. He’s demonstrated his political legitimacy outside the political parties – that’s a major step because it’s reduced the authority of the political parties and reduced their capacity to manipulate the system. Having said that, he will still have difficulties – the Indonesian political system is almost designed to produce a difficult policymaking environment.

More than half Indonesia’s population is aged less than 25 years. What impact will this have on the new leader and what he can do?

They’ve got very little personal knowledge of the Suharto era, and the Indonesian education system is very selective [on history]. But I think in some respects the crucial element there is going to be not just youth, but also where they are. Particularly urban, educated people, Jokowi is counting on to support his initiatives. There was a small debate before the election about what the impact of the large number of first-time voters would be; my feeling is that they would have been more likely to vote for Jokowi. Prabowo might have offered certainty, but young people tend to go for ideals more than certainty.

Australia and Indonesia have reportedly signed a deal over the spying row; how will relations change under Jokowi?

[Outgoing president Susilo Bambang Yudhoyono] SBY has been known as Australia’s great friend – the best Indonesian president Australia has ever had. But for many Indonesians, it’s been a negative. Having said that, and saying that Jokowi will be more focused on domestic issues than international ones, I think we will be vastly better off with an Indonesia under Jokowi than an Indonesia under Prabowo. Prabowo is a loose cannon; he has an appalling record on human rights issues. If you look at the issues which have previously cruelled relations between Australia and Indonesia, it’s been human rights.

The situation has improved considerably since the end of the Suharto regime, with the exception of the two Papuan provinces. Jokowi has visited Papua on a number of occasions, and I think he gets it more than Prabowo does…I think we will be well served by a Jokowi president as opposed to a Prabowo one, but he won’t see himself as Australia’s best friend in Jakarta, nor should he.

Indonesia is seen as one of the future BRIC economies, and it also contrasts with India as one of Asia’s two big democracies.

The BRIC group looked good 10-15 years ago; I’m not sure it looks quite as good today. In comparing Indonesia with India, where Indonesia voted for the Jokowi candidate, India voted for the Prabowo candidate in terms of someone with a harsh record on human rights and religious tolerance, so they’ve moved in different directions.

Indonesia’s economic development comes back to things like good financial management, but overriding all of that are issues of corruption and efficiency. Both those things are ones where Jokowi has a chance of making a difference. What Jokowi really brings to the marketplace is not so much specific policies, but transparency and certainty in government, and neither of those two things have been a feature of Indonesia financial and monetary administration.

Rather than specific policies, it’s his approaches to policy that will benefit Indonesia the most and makes it more likely to achieve its potential as a reasonably significant regional economic power, if not a global one. In that context, it will do better than it’s done in the past, where that potential has often been stymied by those inefficiencies.

When I talk to businesspeople, the major problems they see in Indonesia are structural problems rather than the real economy, such as if we have a contract, how do we know we can enforce it? How do we know we can repatriate profits or do this, that and the other? Often the answer has been you need good personal relationships…a lot of them get put off by the belief that it’s all going to be far too hard.

How are you seeing the outlook under a Jokowi presidency over the next five years?

It won’t be all smooth sailing, but Indonesia has got a chance at something here which you don’t get very often: a chance to break with the past and go off in a new and potentially much more desirable road, socially as well as economically and politically.

I think the odds are that Jokowi will make a success of it. He’s learnt his political craft by moving up from local government to provincial government and now to national government. He knows how the systems work and he knows what he has to do…One of the things he’s asked his transition team to do is look at the business mafia – the small group of companies which wield excessive control over the Indonesian economy. He’s recognized the need to do something about breaking their power; previous governments have tried and failed to do that. I think he’s got the right ideas and skill set, and I think he can bring enough people along with him to make those things happen.

In five years time, my guess is people would say on balance it’s been a very positive presidency; there are some things that could have been done better, should not have been done or whatever, but that’s normal. He ain’t god, despite what some of his supporters might occasionally think.

The other issue is the significance Jokowi places on improving the education and health systems. These are two things he’s done in Jakarta as governor, and he’s recognized that without a better education and health system, the nation as a whole is never going to achieve its potential. They’re not the glamorous areas, but I’d be looking at those two areas to see what kind of initiatives he takes in the next six to 12 months.