- Wednesday, October 16, 2024
Indonesia, with a population of 280 million, is often overlooked as one of the world's most impressive development success stories. Just three decades ago, the per capita income in this country was a mere $350. Today, it stands at a remarkable $5,000, according to Edward Gustely, managing director of Penida Capital in Jakarta.
A key contributor to this progress is President Joko Widodo, fondly known as Jokowi. As his 10-year tenure draws to a close with upcoming elections on Feb. 14, Widodo's impact on the country's development cannot be overstated. Widodo has earned a reputation as a master builder, addressing the long-standing infrastructure deficiencies that plagued Indonesia for years. Perhaps the most notable achievements under his leadership include the introduction of Jakarta's metro system and the establishment of Southeast Asia's first-ever high-speed rail line connecting the capital city with Bandung. During most of his tenure, the country's gross domestic product has consistently grown by 5% annually.
According to Thomas Pepinsky, director of Cornell University's Southeast Asia Program, Widodo deserves a solid B+ grade for his economic performance. He has also skillfully navigated the geopolitical landscape, successfully attracting financial backing from both China and Japan for critical infrastructure projects such as the rail line and metro system.
Widodo's success extends beyond economic triumphs. He remains highly popular domestically, with approval ratings hovering around two-thirds, according to Lucas Myers, senior associate for Southeast Asia at the Wilson Center.
However, there is an important challenge that Widodo has been unable to overcome during his tenure: the influence of a self-interested elite consisting of military officers and oligarchs that undermines the country's business dynamism. Indonesia currently ranks 115th in Transparency International's Corruption Perceptions Index, placing it on par with countries like Ecuador and the Philippines. Despite initial promises to empower the Corruption Eradication Commission, Widodo's progress in tackling corruption has been limited, states Pepinsky.
As Indonesia enters the next decade, it remains to be seen whether the country can tackle this pressing issue and fully unleash its economic potential. Nonetheless, there is no denying that under Widodo's leadership, Indonesia has made significant strides towards becoming a global economic force to be reckoned with.
Jokowi's Missed Opportunity in Indonesian Manufacturing
Indonesia, under the leadership of Jokowi, has failed to capitalize on the opportunity to attract high-value-added manufacturing as it diverts its focus away from China. In comparison to its more agile neighbors, such as Vietnam and Thailand, Indonesia has fallen behind in offering concessions to manufacturers during China's exodus.
Jokowi's strategy has centered around the exploitation of nickel, a vital component in the production of electric-vehicle batteries. With Indonesia accounting for over half of global raw nickel production, the president has imposed export restrictions, aiming to compel smelters and battery manufacturers to establish themselves within the country.
However, even if this strategy proves successful, Indonesia is unlikely to experience the same level of "human capital spillover" that Vietnam has achieved through its investments in electronics and other forms of manufacturing, as argued by Pepinsky.
Regrettably, Jokowi has overlooked Jakarta's environmental vulnerabilities, such as endemic flooding due to its low-lying position below sea level. Instead of addressing these pressing concerns, his attention has been fixated on constructing a new capital city in Nusantara, situated 1,100 miles northeast on the island of Borneo. Gustely highlights that this vision has failed to attract enthusiasm from outsiders: "They say 80% of the capital will come from the private sector, but why would anybody want to invest?"
Regarding succession plans, Jokowi has assembled a less-than-ideal team consisting of former opponent-turned-defense-minister Prabowo Subianto and his own son, Gibran Rakabuming Raka, as the vice-president. Amnesty International has accused Prabowo, a former special-forces commander under Indonesian dictator Suharto, of involvement in crimes against humanity, including enforced disappearances. Consequently, he was denied a U.S. visa for two decades.
Moreover, Gibran, at 36 years old, falls four years short of the legal age requirement for his position. Nevertheless, the Constitutional Court has granted him a waiver through a narrow 5-4 decision, with Jokowi's brother-in-law in the majority.
Regardless of these controversial factors, Prabowo is favored to win owing to his association with Jokowi. This brings an inglorious end to a historically significant career.
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