Old habits die hard in Indonesia’s presidential clash

By Matthew Busch
PhD candidate at Melbourne Law School. His research focuses on the Indonesian state and political economy of economic management.

Indonesia’s presidential election – Joko “Jokowi” Widodo versus Prabowo Subianto II – is trundling toward its 17 April denouement, an event less exciting for its potential drama and more for its status as the end point of a long and, thus far, insipid contest.

In general, both candidates seem content to proceed with pronounced caution. Jokowi is guarded against any issue that could be construed as him not being adequately Islamic. Prabowo was reputedly persuaded to run mostly to help save the furniture for his party, Gerindra, at the simultaneous legislative ballot.

Although there have been the usual political sallies, the insistence from Prabowo and his running mate, coal tycoon turned political newcomer Sandiaga Uno, that their campaign represents a critique of Jokowi’s handling of the economy has yet to animate the contest.

This economic focus makes sense, as opinion polls regularly show that voters’ place economic considerations, such as the price of staple goods, among their top concerns. Nevertheless, despite being presented in Sunday’s second presidential debate with a list of topics suited to his campaign’s supposed economic message – including infrastructure, food and agriculture, and energy – Prabowo failed to land heavy blows on the president.

Instead, the debate featured an unusual level of bonhomie and complements and might well be most memorable for launching what we can only hope is an iconic spate of unicorn memes. This was the result of Prabowo misunderstanding a term used to describe a startup valued at over US$1 billion (Indonesia has four unicorns, and Jokowi has promised to support the growth of more, though his focus on the digital economy).

Opportunities to attack Jokowi might appear difficult at first, as economic performance has been good enough. GDP growth has hovered around 5 per cent, despite a pledge from Jokowi to deliver 7 per cent growth. In his many trips across the archipelago to open roads, irrigation, and mass transit projects, Jokowi has consciously portrayed himself as an active leader interested in working directly on practical issues.

Although there is general understanding – especially among the business class, investors, and development partners – that the economy has underperformed, there have been no major hiccups. Such disruptions would be the real political risk for Jokowi, as they can prompt the bouts of inflation or disruptions to consumer purchasing power that usually top voters’ concerns.

This is not to say that the Prabowo camp lacks material. In addition to the president’s 7 per cent growth pledge, the Jokowi government has produced other unmet or ill-advised commitments. These include a plan, much celebrated early in his term, to add 35,000 MW of power generating capacity to the national grid by 2019. As of January 2019, less than 4 per cent has been achieved, and the government had already walked back the target to 20,000 MW.

Likewise, the government congratulated itself on its 2016 tax amnesty. Although the policy saw assets worth nearly 40 per cent of GDP declared to authorities, a far more modest share of assets (less than 15 per cent of the plan’s target) were actually recovered.

Meanwhile, the tax ratio has barely budged, and is again below 11 per cent, well short of the administration’s 2019 target of 16 per cent. Growth and structural labour transformation has not created enough modern, formal sector jobs. Foreign direct investment in 2018 reached its lowest level (in dollar terms) since 2012. And protectionism has undermined competitiveness by choking off imports necessary for value-added exports.

Regardless, Prabowo’s efforts have often missed the mark. A job creation attack was overwhelmed by Prabowo’s clumsy narration of an online meme depicting young Indonesians departing school to become motorcycle taxi (ojek) drivers.

Arcane criticism of Indonesia’s public debt, which although nominally higher under Jokowi is very low compared to both the scale of the economy and comparable countries, represents minutiae beyond the concern of most voters. It has failed to resonate beyond a narrow band of reactionary economists aligned with the campaign.

Too many talking points simply devolve to reflexive economic nationalism or stumble straight into the president’s strengths. At Sunday’s leaders-only debate, Prabowo used a direct question to Jokowi to again fault him for food imports. Most voters are concerned far more about food prices (which average 33 per cent higher than they would be without trade restrictions). This means pro-producer policies, which mostly benefit a narrow strip of landed or trading interests, actually stand little chance of garnering mainstream support.

Instead, Jokowi got an opportunity to explain how agricultural imports can secure stocks and buffer against uncontrolled price increases. The president then scored again by remarking on Prabowo’s large land holdings. A call for greater Indonesian ownership of natural resources also fed directly into another Jokowi strength. He was able to remind viewers that he oversaw the Indonesian takeover of a majority stake in Freeport Indonesia (owner of the massive Grasberg copper and gold district) and state-owned oil company Pertamina’s takeover of the large oil and gas projects Mahakam and Rokan.

The most effective economic criticism has come from Prabwo’s deputy, Sandiaga, even though his messaging can at times be at odds with his boss’s familiar tirades about foreign dominance and state control.

Sandiaga has trialled the most effective line against Jokowi’s infrastructure strength. He has noted that in his discussions with voters, they never raise concerns about the design or execution of infrastructure but are instead concerned about prices. Similarly, Sandiaga’s interventions during the first debate on human rights and law made the most coherent connections to overall economic themes.

Sandiaga has also emphasised the importance of improving conditions for investment, and during late-2018 he responsibly hosed down attempts to politicise and fault Jokowi over the rupiah’s depreciation (towards a psychological 15,000:US$1 level last reached during the Asian Financial Crisis).

The tension between Prabowo’s instincts and Sandiaga’s more pragmatic economic message might actually be the most interesting dynamic of an otherwise unedifying campaign. But, while likely popular with the business class and foreign analysts, it is unclear if Sandiaga’s message has broader appeal, especially with younger voters.

The hallmarks of Indonesian economic orthodoxy, including emphasis on state control and the need for subsidies and market distortions, exist because of durable historical, ideological, and constitutional features.

Moreover, Sandiaga, although able to offer some sensible campaign soundbites, has also shown a capacity for the gaffes one might expect from an Indonesian billionaire. This might limit his future fortunes against more authentic, homespun candidates like Jokowi.

Nevertheless, amid a sleepy campaign, watching a candidate trial a new message with an eye to 2024 might be the most interesting dynamic of all.

Banner image credit: Antara/Akbar Nugroho Gumay


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