November 30, 2022

G-20 summit showcases stability Widodo has built in Indonesia

This article originally appeared on NIKKEI Asia’s website.

Terence Wang is a director based in Mintz Group’s Singapore office and leads the Southeast Asian research team.

Joko Widodo is entering the home stretch of his second and final term as Indonesia’s president with a series of turns in the spotlight, beginning with his hosting of Group of 20 leaders this week at a summit in Bali.

Shortly thereafter, Widodo will assume the chair of the Association of Southeast Asian Nations. If all goes as planned, he will inaugurate a new national capital at Nusantara on the island of Borneo in 2024.

While these events will burnish Widodo’s reputation, his real presidential legacy will lie with his quiet strengthening of Indonesia’s political norms over his decade in power.

Between the dawn of Indonesia’s democratic era in 1998 and Widodo’s first win in 2014, each presidential election brought a scramble to form coalitions and alliances, few of which proved stable. Parliament was often polarized, and that divisiveness spilled over to the population.

Tough policy decisions were made all the more difficult by the very real threat of discontent in both the legislature and on the streets. When Susilo Bambang Yudhoyono, Widodo’s predecessor, attempted to reduce costly fuel subsidies in 2012, for example, he suffered a crippling political and popular defeat from sustained mass demonstrations.

Widodo’s administration, by contrast, has raised fuel prices five times with barely a whisper of protest. Neither did his government wither when it did face protests.

For example, while mass protests in 2016 to demand that Basuki Tjahaja Purnama, then Jakarta’s governor, be prosecuted for blasphemy resulted in his ouster, Widodo’s administration then defused the movement by banning some of the groups involved and arresting a number of radical leaders. This approach successfully fractured the Islamist political opposition, which has since lost much of its influence.

Widodo has been able to make decisions that might have brought down other presidents because he has successfully cultivated an umbrella political coalition that controls 72% of the lower house of parliament. He assembled a cabinet that includes his 2014 and 2019 opponents, former general Prabowo Subianto and running mate Sandiaga Uno.

History may well regard Widodo as the first true figure of unity in Indonesian politics since Sukarno, who led the independence movement against the Dutch and became the country’s first president in 1945.

The atmosphere of unity that he created has produced a period of unparalleled domestic political stability. This led to the passage of landmark legislation, such as the 2020 Job Creation Act, which eradicated many outdated regulations, liberalizing Indonesia’s economy.

To be sure, some moves, such as Widodo’s endorsement of revisions to the legal foundations of the country’s Corruption Eradication Commission that dramatically weakened the agency, have been seen as backward steps on Indonesia’s path to liberal democracy.

Election law amendments in 2017 that affirmed a requirement that a presidential nominee gathers backing from parties holding at least 20% of parliamentary seats have also been attacked as a worrisome consolidation of power among the country’s political elite. The country’s political elite now includes Widodo’s son and son-in-law, who were elected as the mayors of Surakarta and Medan, respectively, in 2020.

Widodo’s supporters argue that the flip side to consolidation is greater stability and continuity.

In the political environment Widodo has established, future presidential candidates, vetted by major political powers, are unlikely to veer far from the status quo. There is little chance that, as in previous elections, a candidate from outside Indonesia’s political structure could emerge to possibly disrupt the country’s stable governance framework.

This reality can be seen in the emerging contours of the 2024 presidential contest. The three front-runners — Defense Minister Subianto, Central Java Gov. Ganjar Pranowo and Anies Baswedan, a former Jakarta governor supported by the country’s sizable Islamist movement — are all known quantities with established track records.

The importance of party backing for their candidacies, and of party officials as gatekeepers, can be seen in the current drama unfolding in the ruling Indonesian Democratic Party of Struggle. Despite Ganjar’s popularity, the party leadership is coalescing behind Puan Maharani, daughter of former President Megawati Soekarnoputri, the party’s founder. Ganjar has been forced to angle for support from other parties.

More importantly, from the perspective of continuity, none of the front-runners differ significantly from Widodo in terms of ideology or policy. This is especially true in international relations, as all three men have expressed liberal attitudes toward foreign investment and the West.

As governor, Ganjar has supported loan financing reforms for small and medium enterprises to spur economic growth. Prabowo, with a personal net worth of $140 million, is unlikely to disrupt the investment climate, if only out of self-interest and as defense minister, has worked to strengthen ties with the U.S., France and Japan. Anies’ Islamist base may cause him to move more cautiously regarding the West, but he is no hard-liner and worked diligently to make Jakarta a global city and attract foreign investment for regional development projects.

Widodo is reportedly on good terms with all three, reflecting both his hallmark big tent governing style and his ambitions to see his policies stay in place long after his term expires.

While critics have raised concerns regarding what these developments entail for Indonesia’s democratic foundations, it can also be argued that the current political framework combines popular choice and stability in a way that serves Indonesia well.

With stability, Indonesia can focus on strengthening its economy by responsibly developing its extensive natural resources. Widodo’s Mineral and Coal Mining Law has expanded the country’s nickel industry, positioning it to meet global demand now that sanctions have put Russia’s vast reserves off limits to many countries.

Indonesia is a country still very much in flux. A great deal of work remains to be done by whoever Widodo’s successor turns out to be. But in terms of both politics and policy, that person will be able to build on the solid platform the Widodo has built.

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