News

Go back

Jokowi's Choice: Popularity or Growth?

Published 13 Jun 2015
Edward Durie

The 2014 elections in Indonesia were given a great fanfare internationally. Here a country which had spent most of its history under authoritarianism transferred power from the first directly democratically elected president to another. Joko Widodo (or Jokowi as he is known), an unassuming man from Central Java, with little experience as a member of the Jakarta political elite, was elected with a comfortable majority over his rival, Prabowo Subianto – a relic of the authoritarian regime. As is understandable with any political campaign, both candidates took part in grand displays of national pride to appeal to the voters – my particular favourite was Prabowo carrying a flag astride a great stallion riding around a stadium in front of his supporters.

While the election was viewed by many Indonesian watchers as a great victory for Indonesian democracy, there was some trepidation about what Indonesia under a Jokowi administration might look like. Many feared the nationalist rhetoric used during the campaign might come to characterise the new government and prove unsettling for Indonesia’s friends and neighbours. It also places Jakarta at odds with ASEAN as the regional body moves this year towards a single market. Although the methods in which a foreign investor can now enter the Indonesian Market have improved – through the Investment Coordinating Board (BKPM) – the process can still take a number of years to complete, with potential investors scared away by endless bureaucracy and corruption.

It is not difficult to understand why progress – both political and bureaucratic – is slow. Most Indonesians view the deals done with big foreign companies such as the mining company Freeport as daylight robbery; there is undeniably a perception that Indonesia’s natural resources are being taken at incredibly low cost by foreigners, with little if any benefit flowing to the treasury or local populace. As many of these deals were negotiated under previous administrations when corruption was even more widespread than today, there is an even stronger suggestion that they were negotiated using bribery and other tactics. Similarly, policies that protect the livelihoods of most of Indonesia’s 100 million or so poor also make sense for any national government. The main challenge for Jokowi is to balance these concerns of regular Indonesian citizens against the real requirement for Indonesia to attract more foreign direct investment.

There has however been a well organised push by Jokowi and his administration in the last few months to improve the situation. Jokowi has already gone on overseas trips to China and Japan to encourage investment, particularly in his new naval strategy, the Global Maritime Axis. This forward thinking plan is designed to greatly improve naval infrastructure throughout the archipelago, by building or improving a number of ports – intending to drive local growth and open up some of the more remote islands to internal and external trade. Currently, the amount needed to be raised is somewhere about $40b USD which is mostly to be raised by external investment.

Yet the pervasive theme amongst Jokowi’s stance is the renewed nationalism following on from the SBY years. The Global Maritime Axis, the recent executions of foreign drug smugglers, the comments during the election campaign and the continuing of protectionist policies all show how different the Jokowi Administration will be compared to his predecessor’s, and that the time of ‘A thousand friends and zero enemies’ is over.

In the long term, investors are happy to look away from the negatives if the market they are trying to enter is favourable – take China for example. However, Indonesia is yet to reach this equilibrium. Issues such as corruption, cronyism and rent-seeking by the domestic elite are still major issues within the Indonesian economy. The path to doing business in Indonesia on a large scale is still a long one, weighed down by paperwork and bureaucracy. If Jokowi continues to keep some of the more protectionist policies and refrains of nationalism in place to retain his vote, the chances of him hitting the foreign investment target becomes slimmer and slimmer. Also without the much needed anti-corruption measures and red-tape reform, Indonesia will remain to be less attractive to invest in to its other neighbours or markets in the region. A preoccupation with policies that limit or prevent foreign interaction isn’t the way for Jokowi to go, rather he needs to accept that he will need to lose some votes in order to see Indonesia progress further forward.


Edward Durie is about to complete a Bachelor of Arts at the University of Sydney with a Major in Government & International Relations. He is also involved with the Australian Indonesian Youth Association, and has recently completed a 5 month exchange in Yogyakarta. Edward’s research interests are defence and security issues in South-east Asia.