Indonesia’s New Economic Model

Nov. 5 (Bloomberg) -- Indonesia’s most-promising politician, Joko Widodo, who was elected governor of Jakarta province last month, looks like Barack Obama: lean and coolly self-possessed in a way that seems as much Bogartian as Javanese. Emerging out of nowhere, and serenely vaulting over the heads of establishment politicians, he embodies the possibility of change. But here the resemblance to the U.S. president ends.

Obama is fighting to win re-election. Jokowi, as Widodo is popularly known, enjoyed hugely successful terms in office as the mayor of the Central Javanese city of Solo. Fulfilling most of his promises, he was re-elected with a voting percentage -- 90 percent -- more often enjoyed by dictators in the Central Asian “stans.”

When I met Jokowi in Solo recently, as he was waiting to be sworn in as the chief executive of Jakarta, he explained his electoral triumph. He said he had preferred to work from “bottom-up” rather than “top-down.” In a city of small merchants and traders, he had made it easier to procure business permits and licenses. He had supported local businessmen and traditional crafts and industries such as batik. In a country notorious for corruption and crony capitalism, he had favored small-food-cart owners over global convenience store chains and shopping malls.

Homegrown Growth

Such a “bottom-up” record benefitted him greatly in Jakarta, which has many underprivileged, rural migrants-cum-entrepreneurs from Java. In Indonesia, as in India, economic liberalization has favored big-business men, who have used their proximity to politicians to garner a disproportionate share of national resources and income. The last governor of Jakarta, and Jokowi’s rival, for instance, turned out to own a Van Gogh painting.

At one level, Jokowi’s tactics remind you of populist politicians elsewhere in Asia: people who built up vote banks among the poor majority by railing against big-business men and their political allies. To this category belongs Thailand’s Thaksin Shinawatra as well as the chief minister of the Indian state of West Bengal, Mamata Banerjee, who stands perennially ready to thwart the most tentative economic initiative by India’s central government.

But, unlike Thaksin, Jokowi appears to have no shady links with the world of big business. And, unlike Banerjee, his populism is more than some uncreative rabble-rousing.

Rather, Jokowi has quietly focused on developing a “people-centered economy.” This involves helping to upgrade traditional crafts and skills so that local products can compete with imports from China, while also deepening regional identities (a distinctive feature of central Javanese culture).

Jokowi’s success has predictably attracted Indonesia’s establishment parties. There is much talk in Jakarta that Jokowi might stand for the presidential election due in 2014.

But Jokowi himself dismisses this speculation. He told me that he has a job to attend to in Jakarta. And it is an unenviably formidable one. Jakarta is the chaotic setting, simultaneously, of floods, slums, poverty, crime, subsiding land, and some of the world’s most notorious traffic jams.

According to Jokowi, Jakarta needs not more roads and freeways -- the hundreds of new car owners every day would quickly turn those into parking lots as well -- but more public mass transport. A monorail project, long dormant, may now be revived.

Ethnic Appeal

Jokowi’s rise points to some major shifts in Indonesian politics. In recent years, a fast-growing economy and a decentralized administrative structure have empowered such figures as bupatis (regents) and walikotas (mayors), who were previously nominated to their posts by the central government in Jakarta.

Plundering generous budgets and selling off national resources, many of these autonomous officials have confirmed Indonesia’s reputation as one of the world’s most-corrupt countries.

But others such as Jokowi and Surabaya’s mayor, Tri Rismaharini, represent what Karim Raslan, one of the keenest observers of Southeast Asia, calls “a distinct but important part of Indonesia’s future.”

This is true in more ways than one. Jokowi’s appeal in Jakarta transcended the ethnic and religious passions that many of Indonesia’s political class are often eager to stoke. In the world’s largest Muslim country, Jokowi took a calculated risk in choosing as his running mate a bupati-turned-parliamentarian named Basuki Tjahaja Purnama (widely known as Ahok), who is both Christian and ethnically Chinese.

Together, Jokowi and Ahok fended off many malicious attacks on their allegedly un-Islamic outlook. They were helped by an increasingly mature electorate -- one that distrusts venal and inept politicians more than it thrills to invocations of religious and ethnic solidarity.

But Jokowi’s ascent also has another, larger meaning.

In recent years, the energies unleashed by mass democracy and global capitalism have frequently collided across Asia. Jokowi shows one way out of that impasse by seeking to assist an indigenous entrepreneurial class -- one that can hold its own against globally resourced competitors. By working with small-business men, he overturns a general preference across postcolonial Asia for top-down technologies of nation-building, in which the heavily centralized state oversees economic growth, through either state-owned enterprises or big, private corporations.

As early as the 1970s, the Indonesian thinker Soedjatmoko had warned against the heedless technocracy that opened up massive disparities between the center and the periphery and rural and urban areas while destroying native self-confidence. “We will,” Soedjatmoko wrote presciently, “have to turn developmental thinking upside down.”

This is what Jokowi seems to be doing. His form of localization seems more imperative as global capitalism falters, exposing its socioeconomic contradictions and steep environmental costs.

Populous, diverse and largely agrarian societies such as Indonesia always had to find their own way of being modern. Jokowi is now advancing this necessary but unconscionably delayed experiment in a chaotic and still half-modern city. His success will mean real “change” -- and it will have major implications for not only Jakarta or Indonesia but also much of Asia.

(Pankaj Mishra, the author of “From the Ruins of Empire: The Revolt Against the West and the Remaking of Asia,” is a Bloomberg View columnist, based in London and Mashobra, India. The opinions expressed are his own.)

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