When Indonesian President Joko Widodo last year launched implausible plans to build a new capital in remote Kalimantan, councilors shook their heads in despair but were not surprised.
“Jokowi doesn’t like research; he likes action and decisions,” one official told me, the president’s universal nickname. “There was no adequate research into infrastructure projects that maximized expansion and productivity. where I was going. “
The president said the $32 billion allocation needed to ease tension in Jakarta’s overpopulation, expand progression beyond Java’s economic strength, and realize Indonesia’s destiny to fit into a complex nation.
But the economy of moving the capital did not go up, even before it hit the COVID-19 pandemic, prompting the economy to fall into its first recession since the Asian currency crisis of 1997-98. While many countries have built new capitals, few have. tried to do it from the existing one, 1,300 km across the sea.
Indonesia’s dream of Brazilian, Canberra or Naypyitaw construction embodies the president’s most productive and worst traits. On the one hand, it is ambitious, it is aimed at building much-needed and intelligent infrastructure to captivate foreign investors. On the other hand, Jokowi is impulsive, impatient with experts and prefers to publish projects that make headlines rather than push for complicated reforms.
Inspired but exasperated by Jokowi, one of his ministers told me that it was greater to perceive the president as a “package of contradictions. “
Six years after the start of his presidency, Jokowi is suffering to meet the highest expectations he has created. What is at stake is the ultimate for Indonesia, which will have to generate enough decent jobs for its expanding population, or threatens to see its much-snitched demographic dividend. From Tokyo to Washington, foreign governments also count on Jokowi to make Indonesia a richer and more diplomatically active force that can help counter an increasingly assertive China in Asia.
Just as Jokowi was recovering from his humble beginnings in a riverside hut, he promised Indonesian customers to stimulate economic growth, cut poverty, and build a political formula at the service of people, not the powerful.
The president doubled that view in his inauguration speech at the time of his re-election in 2019. Su ambition was for Indonesia to become an evolved country until 2045 and one of the five largest economies in the world, above its current 16th place. reformed bureaucracy and an open and competitive economy, Indonesia would have “social justice for all” and in line with a per capita income similar to those of Portugal or Taiwan today.
However, the more time Jokowi spent in the presidential palace, the more his promise faded: a guy who presented himself as a foreigner is deeply rooted in elite politics; a leader once admired for his impeccable reputation has weakened the country’s popular anti-corruption agency. causing an increase in student protests last year. And their persistent calls for economic reform have been hampered by their nationalist instincts and lack of concentration in implementation.
“Like Indonesia, Jokowi is caught between democracy and authoritarianism, Islam and pluralism, openness and protectionism. “
Jokowi’s presidency is not only a story of private paradoxes, but is dealing with the basic contradictions of the vast and varied Indonesian nation, which was forged 75 years ago from the arbitrary limits of Dutch colonial expansion. democracy and authoritarianism, Islam and pluralism, openness and protectionism.
The infrastructure president
The president’s assistant looked at his watch with a grimace as my assembly continued to last the allotted time. He advised Jokowi to conclude, but the president beckoned him to leave. “No, it’s bigger to show you, ” he said. while examining slide after slide infrastructure projects on his computer.
The Trans-Sumatra toll road? Thirteen more km had been extended since his last visit, and the structure team expanded to 3 groups according to the day. The Pemalang-Batang toll road in central Java? Despite everything, he set it in motion a few months earlier. It was nothing compared to the Jatigede Dam in West Java, delayed for similar reasons for 40 years, until the president intervened, of course.
At this point, his assistant had gone from inflammation to resignation as the schedule deviated once again, something normal at Jokowi Palace. But the king of infrastructure has not been made. He had stored the most productive by the end: Jakarta Mass Rapid Transit, or MRT.
Jokowi started the structure of Indonesia’s first subway line when he was governor of the capital, and was about to be completed in 2019, thanks to his successor and former formula partner Basuki Tjahaja Purnama. “I’m still reviewing this project, ” he added with a satisfied smile. For Jokowi, it was a symbolic marker to show that decades of mismanagement were being left and that Jakarta nevertheless joined the ranks of the world’s right cities with public transport.
Jokowi likes infrastructure. It is hard to believe that some other leader of a wonderful country would revel so much in the meticulousness of structure projects. One of the defining photographs of his presidency is Jokowi in a helmet and a high-visibility vest, examining staff as they put the completing touches to the last airport, port or railway.
The president believes that a more wonderful infrastructure is essential to stimulate expansion and reduce inequality, but it is much more than that. As he explained in a 2018 speech, his broader project is to “unite this wonderful nation. “
His critical technique for politics stems from his delight as a furniture manufacturer and mayor of the city. After graduating with a degree in forestry, Jokowi shaved his heavy steel hairstyle and entered the wood sector, and eventually built a thriving export factory in his hometown of Surakarta, better known as Solo. He ran for mayor of Solo in 2005 for his experience as a business owner, promising to beautify the city’s markets and slums and access to care and physical education. He was re-elected in 2010, then won by Jokowi, a presidential candidate in 2014, repeated the speech to focus on the economy and infrastructure, and his immediate rise from political ingenuity to president on such a fundamental platform reflected Indonesians’ deep frustration with corruption and the useless government of the political elites that dominated the national scene before Jokowi’s arrival.
He has a furniture manufacturer attitude in politics; you want electricity for your factory, roads and ports to ship your goods and boats to send to your customers abroad; you want tax cuts and easier regulations to make business easier and better. physical care and education to ensure a happier and more productive workforce.
Jokowi also understands that Indonesia desperately needs greater infrastructure to put its economy on the fast track. Its predecessor, Susilo Bambang Yudhoyono, commonly known as “SBY”, benefited from several years of expansion driven by commodity prices as China’s demand for Indonesian coal, rubber and palm oil increased. mid-2000s. But it did not take advantage of smart years to expand the country’s traffic-congested roads or to modernize its inefficient ports and airports. This left economic expansion stagnant at around 5% consistent with the year. Looks solid. But Indonesia is not generating enough investment to create jobs for its developing population, with more than 2 million young people entering the workforce each year.
Indonesia still suffers from maximum levels of deprivation, even though the official poverty rate rose from 11% when Jokowi assumed the presidency to just over 9% when he was re-elected in 2019. Many Indonesians live in economic purgatory, rising above the poverty line. However, it will most likely fall under it on the occasion of a circle of family illnesses, cyclical slowdown or other misfortune. When COVID-19 broke out in Indonesia in early 2020, the Minister of Finance warned that it would stop the fight against poverty over a decade.
Only 52 million Indonesians are classified as “economically safe” through the World Bank. The remaining 80% of the population closest to the edge, driving as subsistence farmers, casual structure staff and food cart operators.
After his re-election in 2019, Jokowi said he could simply pursue complicated economic reforms because indonesia’s two-term mandate restriction left him free from the “burden” of re-election. are far from clear.
The president’s emphasis on infrastructure is not motivated by an ideological commitment to the flexible market economy. Rather, he is a developmentalist who believes that economic expansion is mandatory for political legitimacy. But without a transparent vision of how he wants to remake the economy, Jokowi has grappled with a basic contradiction that has held back Indonesia since independence: the country wants foreign investment and know-how to develop. of colonial oppression.
Intrigue in the palace
Jokowi is a strategic tactical leader. It has struggled to integrate individual successes into the coherent timetable that Indonesia wants to make and ensure a decent long term for the tens of millions of people still living on the edge.
Distrustful of giving too much force to those around him, Jokowi avoids the kind of central policy that puts into effect the unity on which many governments depend to monitor and implement the changes. There are organizations and departments that intend to play such coordination. However, the abundance of these entities is a sign of their relative weakness. Ministers compete as much as they cooperate. And Jokowi runs the palace more like an imperial court than as the office of a general manager.
A former SBY government minister, who first supported Jokowi, said the president was increasingly acting “like a king. “”Jokowi’s ministers are afraid to challenge their decisions,” he told me. “He’s another one of SBY, undecided, so when he was criticized, he thought again. It’s not like that with Jokowi. “
The president prefers to rely on personalities rather than processes; it was based on a small organization of rotary repairmen to get things done, whose head is former CEO and entrepreneur Luhut Pandjaitan, whom Jokowi first met in 2007 when they formed together an after having identified Jokowi’s political perspective at an early stage, Luhut was rewarded with a set of developing responsibilities: he began as a staff leader after the 2014 election , but ended up as minister of maritime affairs coordination, with broad on the other hand, others who momentarily had the president’s attention to economic problems, such as First-Time Vice President Jusuf Kalla and Finance Minister Sri Mulyani Indrawati, have noticed that their strength in the palace diminishes and diminishes.
As those around him contested the influence, Jokowi ran across the country opening airports, ports and bridges. Images of the president with a shovel in hand or driving a motorcycle on a new road were broadcast daily across the country. strength would be a weakness, as Jokowi prioritized action over quality and planning.
Between openness and protectionism
Although his government lacks coherence, there have been smart and bad decisions. Much of the infrastructure backed through Jokowi was urgently needed and delivered on time, adding the first line of Jakarta’s subway system. Overall, it increased the infrastructure budget from Rs 270 trillion ($18. 17 billion) in 2016 to Rs 400 billion in 2019.
At the beginning of his first term, Jokowi made a stern call to reduce costly fuel subsidies, which increased the budget and presented maximum benefits for well-to-do car owners. , fearing street protests.
Jokowi also restored Sri Mulyani, Indonesia’s best-known economist, from his leadership position at the World Bank and was reappointed as Minister of Finance. He has worked hard to increase Indonesia’s tax revenue, which is less than Cambodia’s. Liberia and Bolivia when measured as a proportion of gross domestic product, their firm hand on the bar kept Indonesia’s finances in check, avoiding the kind of debt accumulation that preceded the Asian currency crisis, but lacks the strength. to drive transformative change.
Jokowi appointed other technocrats, adding personal equity investor Tom Lembong, first as industry minister and later as investment minister, to enhance economic power and attract foreign investment. With his contribution and that of Sri Mulyani, Jokowi would free up more than a dozen money. he called economic recovery plans his first term.
These ill-titled measures were designed to streamline industry authorization processes, Jokowi’s mistake since its factory days, and to expand foreign investment in determined sectors. In reforming these rules, Indonesia has moved from 120th to 73rd in World Bank Doing Business. Qualifying Jokowi’s first five years as president. However, I did not find many entrepreneurs who thought that making an investment in Indonesia had become less difficult in this period.
The double challenge. First, there is a lack of coordination within the government, which is not unique to Jokowi, but was exacerbated through his ad hoc leadership style. A year after the start of his presidency, one of Jokowi’s ministers warned that interministial jealousy, known in Indonesia as the sektoral ego – the “common enemy” of government. Jokowi ran into him over and over again.
The challenge of the moment is the inability to strike a lasting balance between economic openness and protectionism. The president has opened a gap between charming offensives with foreign investors and domestic promises to steer Indonesia away from foreign imports and businesses. his government has erected non-tariff barriers as enthusiastically as its predecessors.
Jokowi is smart to help other people see what they want. Foreign investors running with him in Solo and Jakarta saw a city official looking to make their lives easier. Indonesians were more attracted to Jokowi’s economic nationalism.
Once Jokowi ruled the nation, it has become much more difficult to assume those contradictory positions without paying the price. Raising World Bank ratings will not attract many foreign investors if the progression of inefficient state-owned enterprises and the nationalization of some of them are prioritized. largest energy projects in the country, but that’s precisely what Jokowi did.
Today, Indonesia has more than a hundred state-owned enterprises, employing thousands of people and dominating giant sectors of the economy, transport, banking and electricity, to fertilizer production and pawnshops. These STATE-owned enterprises are more prevalent in Indonesia. than in any other primary economy outside China.
From the outset, Jokowi saw them as a useful tool to drive his infrastructure progress projects and stimulate economic expansion without affecting the national budget, and he also hoped that, as state entities, they would be able to negotiate the same old regulatory minefields with greater eagerness. foreign investors. ” If we invest 10 trillion rupees on roads through the Department of Public Works, we only get 10 trillion rupees,” he told me in 2015. “But if we give state-owned enterprises 10 trillion rupees in capital, you can use it to borrow money from the bank and invest 70 trillion rupees. “
The challenge that many of these corporations were poorly managed and plagued by corruption. Advancing their interests meant evicting the most effective personal sector, both domestically and abroad. Jokowi trusted state-owned enterprises without having sufficiently control over their behavior. The inevitable result that in 2019, the president had to resort to the owner of a successful business, the former owner of Inter Milan Erick Thohir, to clarify the monetary and legal mess they had created.
In the herbal resources sector, Jokowi has continued to nationalize key projects developed abroad, from the massive Grasberg copper and gold mine in Papua, formerly controlled through the US organization Freeport-McMoRan, to the giant fuel block Mahakam. , formerly owned by France. Jokowi legally seized those blocks, which will confiscate them as Sukarno may have done, but only after Indonesian officials exhausted foreign investors with endless disputes over contracts and permits. companies owned by you, it is entirely within your rights. The challenge is their inability to strike a solid balance between the state and the personal sector.
It is astonishing how the legacy of postcolonial hostility to economic liberalism still has such an influence today, despite Indonesia’s need for foreign capital and technology. In a fiery speech on Independence Day in 1963, Sukarno defined his “very simple” view of the development economy, versions of which have passed through the lips of Jokowi and many of his ministers. To succeed, Sukarno argued, all Indonesia wants to do is stand up. This is because it has an abundance of herbal resources, a giant and hard-working population, and a history of illustrious premodern trade empires whose tentacles have crossed the seas from China to Africa. “If nations living in an arid and barren desert can resolve the unrest of their economy, why not us?” he asked.
Hostility to economic liberalism goes beyond Sukarnoist rhetoric. Article 33 of the Indonesian Constitution, which foreign investors would do well to read, states that “the economy will be organized as a joint business based on the principles of the family circle system”. It also stipulates that “productive sectors that are vital to the country” and “land, water and herbal resources” will be “controlled through the state”.
Wilopo, who was prime minister in the early 1950s, said the circle of relatives at the base of the economy was realized as a planned rejection of Western economic liberalism that had brought “misery and injustice” to Asian colonies. Indonesia liked “state assistance and protection” for the personal sector focuses on liberalism.
Protectionism is much deeper in Indonesia than many economists like to admit. They have a tendency to argue that Indonesia’s economic nationalism is motivated by the “Sadli Act,” which states that bad times lead smart policies and bad policies to bad policies. Commodity costs are high, as in SBY’s years, the government is rich in cash and can be selective with foreign investment. On the other hand, the argument is that when commodity costs fall, as happened during Jokowi’s tenure, governments deserve to open up the economy to offset the monetary deficit, but Indonesia’s history and Jokowi’s background show that social and political attitudes sometimes outweigh the effect of market forces.
It’s time to rethred
Indonesia’s inconsistent economic policy has been compounded by Jokowi’s taste for the government on the fly. Several other people who worked hard with him explained that the president is getting impatient to hear detailed arguments. “Jokowi is instinctive and stubborn,” said a senior official. ” Once you’re into something, it’s very difficult to replace your mind. “
Expert recommendations, a global theme of our time, have become painfully obvious in the early days of the COVID-19 pandemic. Jokowi minimized the risk to Indonesia and refused to disclose data on the spread of the disease, saying it did not need to “scare” the population. Meanwhile, his fitness minister, a former debatable army doctor, first warned that Indonesians would not pray.
As the death toll increased, Jokowi attempted to block the efforts of local leaders to put in place much-needed social estating measures. While he seemed to set aside epidemiologists, Jokowi overlooked the duty of reaction to existing and previous army figures, a resolution that underlined his vision of the crisis as both an internal and a health crisis.
The president’s advocates argued that he, like many other world leaders, was motivated through a preference to ensure that the economic pain of fighting the pandemic is no worse than the disease itself; however, the disorder has sparked a wave of public complaints from scientists.
Unusually, one of his former senior advisers, Yanuar Nugroho, joined the chorus of concerns, saying that the government’s reaction to COVID-19 was indecisive and lacking in transparency, risking “widespread transmission and victims” and a “collapse of public trust “. argued that the pandemic would be a “wake-up call” for Jokowi to reclaim experience and evidence in policy development.
A positive facet of the pandemic is that it can cause Jokowi to abandon plans for a new capital, nicknamed “Jokopolis” by his critics. His government said the allowance was suspended for the time being.
After six years in the presidency, Jokowi’s simplistic technique for the economy appears to have disappeared. But, as one political best friend told me, one of Jokowi’s greatest strengths is “that other people continue to underestimate him. “Instead of pursuing the capital’s dream, Jokowi took advantage of the consequences of the pandemic to reconsider its economic policy and take qualified recommendations much more seriously.
While it has struggled to locate a non-unusual floor between economic nationalism and the need for foreign investment, there is a broader path forward, based on a fairer vision for Indonesia. Japan, South Korea and Taiwan have used a smart trade policy for the rich and evolved. nations, key protective industries while making sure they are competitive around the world. But instead of clarifying his positions over time, Jokowi has tended to move from one challenge to another.
While the rider to upgrade Jokowi in 2024 will begin, much will depend on who is advancing and the selection of Indonesian voters. Several ambitious politicians hope to follow in Jokowi’s footsteps by demonstrating his courage in local government before making the leap to national Anies Baswedan, Jakarta Governor Ridwan Kamil, West Java Governor and Ganjar Pranowo, the Governor of Central Java, are among those hoping to take this route, but members of the old guard are also watching the 2024 race , adding that Puan Maharani, president of Indonesia’s parliament and daughter of former President Megawati Sukarnoputri, and Prabowo Subianto, a former general whom Jokowi appointed as defense minister last year after defeating him twice in the presidential election.
Like Jokowi, anyone who wins will realize that much more than the strength of personality is needed to drive replacement in Indonesia. This country has come a long way in its first 75 years. But as the dynamics between countries become increasingly controversial and competitive, Indonesia will have to play its game if it wants to have any hope of achieving Jokowi’s purpose of fitting into a rich and technologically complex country in its centenary.
This is an adapted excerpt from Man of Contradictions: Joko Widodo and the Struggle to Remake Indonesia through Ben Bland, an article from the Lowy Institute through Penguin Random House on September 1, 2020, PVP A$12. 99.
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