Indonesia's New President Joko Widodo Isn't Mainstream
Joko Widodo, the just-inaugurated president of Indonesia, faces a herculean task: getting his ambitious reform program through a hostile parliament that’s two-thirds controlled by opposition parties. “I’m not scared of Parliament,” the president told reporters on Oct. 9. “That’s politics. It can change every second, minute, and hour.”
A politician who got his start outside the major parties, Jokowi, as the president is popularly known, plans to lift Southeast Asia’s largest economy to the next level of development and tackle widespread corruption in this archipelago of more than 240 million people. The opposition, led by losing presidential candidate Prabowo Subianto, holds the speaker positions in both houses of the legislature. That’s raised concerns that Jokowi’s pledge to increase fuel prices to reduce the budget deficit, as well as other initiatives, could fall victim to parliamentary gridlock. With growth at its slowest since 2009 and the current-account deficit near an all-time high, foreign investment funds have pulled about $900 million from stocks in the past month.
Still, Jokowi has presidential authority that under certain circumstances allows him to bypass Parliament and implement policies by decree. “He has ample power within the presidency to achieve reforms, using presidential powers, the civil service, state enterprises, and statutes that are already in place but not implemented,” says Kevin O’Rourke, a political analyst and author of a book on reform in late 20th-century Indonesia.
Prabowo, son-in-law of deceased dictator Suharto, had vowed to thwart Jokowi and his agenda by blocking his initiatives in Parliament. However, at a briefing on Oct. 17 with Jokowi by his side, Prabowo said he’d support the government on policies he viewed as beneficial to the nation. Jokowi has yet to announce his cabinet and, despite a pledge to avoid horse trading, may use the lure of ministerial posts to bring opposition lawmakers into the fold. At his inauguration he described Prabowo as a friend and partner.
Jokowi first made his mark as mayor of Solo, a city of a half-million people at the center of the island of Java. As mayor from 2005 to 2012, he’s most often credited with shifting informal street vendors to a formal marketplace. This doesn’t sound too impressive, but the way he did it was: Jokowi went and talked to the vendors himself, heard their concerns, and agreed to a deal. That low-key but effective approach contrasted with Indonesian officials’ usual style of sending underlings to kick people out. He was reelected there in a landslide.
Later, as governor of the capital, Jakarta, Jokowi did spot-checks on bureaucrats—turning up at a licensing office at 8 a.m. and taking a ticket, sitting down, and waiting to be served. He improved flood defenses, boosted tax collection, and started work on a metro line and monorail. He also implemented existing plans for a health card that gives several million Jakartans access to free care. As president, Jokowi is expected to intervene directly in problems, cut red tape, raise tax revenue by improving collection, and build infrastructure to attract additional foreign investment. He’s also vowed to do away with fuel subsidies that are dear to voters but ruinous to the budget.
Economic growth under Susilo Bambang Yudhoyono, the outgoing president, reached 6 percent: This year analysts expect 5.2 percent. The economy is under stress as prices for exports such as palm oil, coal, and gas fall while a growing middle class spurs demand for imported goods, a perfect formula for chronic trade deficits. Policymakers failed to use the good times to overhaul roads and ports and wean the country off commodity exports.
Jokowi’s pledges during the campaign sent markets rallying this year on hopes he would apply his commonsense approach to getting things done at a national level. That euphoria has been replaced by unease over his inexperience in navigating the complexities of the parties that dominate Parliament and the vested interests that influence those parties. The excitement has turned to a “wait-and-see” approach, says Juniman, chief economist at Bank Internasional Indonesia in Jakarta, who goes by one name. “Jokowi and J.K., like it or not, will have to intensively communicate with Parliament,” he says, referring to Vice President Jusuf Kalla by his initials. “If not, it will be difficult.”
Jokowi controls the police and security forces, the attorney general’s office, and the antigraft agency, says Fauzi Ichsan, a finance adviser to the leader’s team. “He will have a lot of sticks to threaten with,” he says. The president knows expectations may be too high. “All is not possible in a short time,” he says.