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Daniel Moss

For Indonesia's Leader, Reelection Is the Easy Part

Indonesia can’t afford to neglect its export-manufacturing sector any longer. Start by making it easier to do business there.

Here we go again.

Here we go again.

Photographer: Dimas Ardian/Bloomberg

After a presidential campaign dominated by nationalist rhetoric, the projected winner, incumbent Joko “Jokowi” Widodo, now has to face an uncomfortable reality: Indonesia is dangerously exposed to the rest of the globe. Adjusting to this fact needs to become a priority in his second, and final, term.

This dependence on the world beyond Indonesia's 17,000 islands manifests in several ways. A persistent current-account deficit means interest rates are higher than they otherwise would be in order to attract foreign capital and prevent a slide in the currency. Commodities exports face a big long-term challenge in the slowing of China's economy to a growth rate ultimately resembling the U.S.’s. Even in the best of times, emerging markets are rarely masters of their own destiny.