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Indonesia: Will a re-elected Jokowi rise to the occasion?

Manu Bhaskaran
Manu Bhaskaran4/29/2019 08:00 AM GMT+08  • 10 min read
Indonesia: Will a re-elected Jokowi rise to the occasion?
SINGAPORE (Apr 29): President Joko Widodo (Jokowi) cruised to victory in last week’s presidential election against his only challenger, Prabowo Subianto. The “quick count” of votes showed Jokowi winning the election by a clear majority of around 54%
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SINGAPORE (Apr 29): President Joko Widodo (Jokowi) cruised to victory in last week’s presidential election against his only challenger, Prabowo Subianto. The “quick count” of votes showed Jokowi winning the election by a clear majority of around 54% compared with Prabowo’s 46% — a slightly higher margin compared with his 2014 win over Prabowo. Parties supporting Jokowi are likely to secure a majority in parliament as well. Despite the peaceful and well-conducted election, several commentaries on the election have been somewhat downbeat, pointing, for example, to how potent the raw appeals to religious exclusivity has been.

Our take is a much more positive one — the glass is more than half full. First, even while recognising the imperfections in Indonesia’s democracy, its elections still showed that Indonesia stands out among large and populous developing societies for the quality of its democracy. Second, looking forward, we believe that Jokowi now has the chance to put in place the reforms needed to spark off an impressive transformation of Indonesia into a dynamic, fast-growing and fair society.

Indonesian democracy is in better shape than its peers; good for long-term stability

Compared with other transitions to democracy in relatively poor countries of similar size in the past two to three decades, Indonesia has clearly outperformed them:

• Hardly any violence: Sadly, elections in many other large developing countries are interrupted by violence, assassinations and protests. Indonesia’s recent elections stood out for its peacefulness — no one was killed and voters went to the polling booths safely and confidently. This may be taken as a given in stable, developed societies, but it is an achievement for a middle-income country.

• Elections were conducted fairly and cleanly: The Election Commission (KPU) conducted itself with a high degree of professionalism and competence, overcoming the immense logistical difficulties of conducting the world’s largest single day of voting. (India’s electorate is much larger, but its elections are carried out in seven phases, unlike Indonesia’s where it is done in a single day.) Voting proceeded smoothly across Indonesia’s vast archipelago, with just two exceptions — voting in Papua was delayed by a day in many balloting stations, while overseas voting in Malaysia will have to be rerun because of allegations of fraud. There have not been any credible allegations of electoral cheating or of the deplorable “voter suppression” that is seen in some parts of the US.

• Indonesians turned out in force, reflecting their confidence in democracy: Turnout is estimated to have exceeded 80% — well above the KPU’s target of 77.5% and an improvement from just below 70% in 2014. Indonesian voters ignored the campaign by disgruntled civil society activists who had called for voters to abstain (“golput”) to show their disdain for both candidates.

The fly in the ointment is that Prabowo has not conceded defeat, insisting improbably that he had won decisively. There was some concern after the election that his supporters might stage protests in support of his claim. However, this tactic has not gained much traction. It did not seem to get support even within his own camp, with his running mate, Sandiaga Uno, said to be reluctant to go down that route. Sandiaga has his eyes on the 2024 presidential election and would not want his reputation affected by associating with such tactics.

The good news is that there is an established process for adjudicating such allegations. Once the official results are announced by the Election Commission by May 22, Prabowo can mount a legal challenge through the constitutional court. But it would be difficult for him to claim that he had been cheated in the presidential election when his party performed so strongly in the parliamentary elections that were conducted simultaneously. In the end, it is likely that Prabowo will have to throw in the towel — as he did before in 2014.

Should we worry about growing religious intolerance?

The election showed that religious intolerance is a growing problem. Despite Jokowi’s strong track record, he only won by a small majority over an opponent with a controversial past. Almost five years into his presidency, there has not been a single credible accusation of corruption against Jokowi. Neither is there even a whiff of the nepotism and cronyism that has long disfigured Indonesian politics. Jokowi may not have pulled off the big surge in economic growth he had promised, but that was only because of the unfavourable global environment. But he did deliver infrastructure improvements and expanded social safety nets for education and health that were popular, while taming inflation.

Clearly, the use of religion to appeal to Muslim voters contributed to his inability to leverage his achievements. The trend in the election results was towards greater polarisation between secularists and the religiously inclined. Provinces with a strong sense of identity with stricter versions of Islam swung to Prabowo compared with how it was in 2014.

But, while the trend is worrying, neither should we exaggerate the impact of religion. Jokowi more than offset the above swing by substantially improving his support in the far more populous provinces of East Java, Central Java and Jogjakarta, where Muslims adhere to a more accommodative, indigenised version of Islam. Provinces with large numbers of Christians such as North Sulawesi and East Nusa Tenggara also raised their support for Jokowi, as did Hindu-dominated Bali.

Moreover, the bottom line is that despite the sway that hard-line religious views had in some regions, the preliminary results show that parties supporting secularism will increase their share of parliamentary seats:

• Secular parties took the highest share of votes and will continue to hold sway over parliament: PDI-P and Golkar — essentially reflecting the nationalist-secular values of the Sukarno (1945 to 1966) and Suharto (1966 to 1998) regimes, respectively, topped the polls. Other committed secular parties held on to their parliamentary representation, such as the Demokrat party of former president Susilo Bambang Yudhoyono and the Nasdem Party.

• The party representing the moderate indigenised version of Islam — PKB — remained a powerful force in its East Java stronghold and increased its share of the vote. Most PKB members and their leaders are uncomfortable with stricter versions of Islam espoused by the more hard-line parties —and support Pancasila, the secular ideology that serves as the foundation of the country’s constitution.

• Among the harder-line Islamist parties, only PKS improved its position markedly. This was probably due less to PKS’ own popularity as to one-off factors. Hizbut Tahrir — banned by Jokowi for its extremism and whose members used to abstain from voting — switched to vote for PKS to punish Jokowi. PKS also benefited from Muslim voters who defected from another Muslim party whose leader had been arrested for corruption.

How should we view this religious trend? First, it is clear that future candidates will be careful about projecting their religious credentials. Jokowi himself took pains to select as running mate a cleric with a reputation for hard-line Islamic views, so as to cover his religious flank. He even made a last-minute dash to perform the minor haj in Mekkah at the end of the campaign to underline his devoutness.

Second, however, the parties making strident appeals to religion failed to effect a swing in their favour. Secularism remains the preferred approach, and nationalist and Islamist parties that subscribe to that view continue to dominate the political discourse. This election showed that to command a majority in a presidential election and to win substantial seats nation-wide in the parliamentary elections, candidates and parties have to appeal to a broad mass of the mainstream, which remains moderate and tolerant.

How will Jokowi use his renewed mandate?

Whatever the concerns, the fact is that Jokowi now heads a coalition of parties that will have sufficient parliamentary strength to allow key legislation and reforms to be passed.

We believe that Jokowi, having won a second and final term in office, will embark on reforms of the investment, trade and labour restrictions that constrain the economy, which will unleash the economy’s true potential. While economic growth of around 5% is respectable enough, Indonesia really should be growing much faster, given its demographic dividend, the abundance of natural and labour resources, its entrepreneurial business elite and its massive consumer market.

The economy is actually in good shape, with sufficient progress having been made in key areas to create a strong foundation for an economic surge.

First, infrastructure improvements are now beginning to have an impact — the completion of the trans-Java highway for instance has already caused a rise in investment in east and central Java, which can now boast of better connectivity. Over the next few years, these incipient benefits will swell to produce stronger growth. All Jokowi needs to do is to keep up the growth in infrastructure spending — this is very doable.

Second, Jokowi’s 16 deregulation packages have helped dramatically improve Indonesia’s ranking in the World Bank ease of doing business study. That should translate into more investment over time, but only if he works harder at two remaining, and very difficult, problems:

• One is the reform of labour laws, which are so excessively protective of workers that they scare off investors and are the reason why employment in the formal sector has barely grown. This is politically difficult, but our understanding is that the president realises how important this is and will work hard at improving the labour market. If he does so, there will be a surge in foreign direct investment in manufacturing.

• Despite impressive progress in the ease of doing business, both local and foreign investors are put off by rule-of-law issues — many are not confident that business disputes and other legal problems can be resolved in a fair and efficacious manner. Reforming this will be a gigantic task, and, even if Jokowi commits to it, will take a long time.

Third, even during the term of this pragmatic president, there have been a number of policies that were seen as overly nationalistic and a deterrent to foreign investment, which we believe the country needs if it is to accelerate economic growth. On this score, we believe that Jokowi will deliver some improvements.

Bottom line

Having said all this, we do not expect the president to move swiftly on these delicate matters. Jokowi is cautious and risk-averse and will seek to build consensus before pushing ahead with reforms that are bound to provoke hostility. But we see in this president a sense of mission and a level of gumption that some of his predecessors may have lacked. Jokowi is, we believe, determined to leave a strong legacy behind — that of being the leader who sparked off the great resurgence of the Indonesian nation. If we are right and Jokowi acts on these reforms, Indonesia will surge and may even grow faster than China or India.

Manu Bhaskaran is a partner and head of economic research at Centennial Group Inc, an economics consultancy

This story appears in The Edge Singapore (Issue 879, week of Apr 29) which is on sale now. Subscribe here

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