American Indonesian Chamber of Commerce


Two Years In

Two years into his 5 year term President Jokowi is exhibiting some of the qualities of former President Suharto. I say this not to compare them in any fundamental way – Jokowi is not an authoritarian-  but to illustrate the process by which each consolidated power in the early years after they became President.

Jokowi has turned the transactional nature of Indonesia’s political system — which he would probably rather eschew–to his advantage in a way reminiscent of Suharto’s method of sidelining rivals by making them offers they couldn’t refuse. Whereas Suharto might appoint a recalcitrant general to an ambassador post Jokowi has brought opposition parties (Golkar and Nasdem) into his governing coalition for the price of a Ministry.  Some things never change.

Meanwhile his reform agenda progresses at a pace that preserves stability within a culture that values consensus.  One could argue that he has a mandate for moving much more quickly but that, in my opinion, would take him out of his natural comfort zone.  Given the outsider position from where he started, the young President has come quite far in two years, in part, due to his brilliant understanding that style can be just as important as substance.

I believe Jokowi’s maneuvers are perhaps greater than Suharto’s as they are done without the support of a major political party. There is no Golkar behind him.   Indeed he often plays against his erstwhile patron Megawati (PDI-P) who expects him to reflexively follow her desires on appointments and policies. Jokowi’s “party” is his mandate from the people, whose appreciation of his leadership -according to recent polls-continues to grow.  (see article)  Like Suharto Jokowi is single minded about economic development, specifically infrastructure, and spends little time on international affairs.  But his policy of relying on state institutions as much or more than those of the private sector could become an Achilles heal much like Suharto’s reliance on his children’s businesses.

Specific accomplishments

  • Completely eliminated the threatening behavior and opposition of Prabowo, his opponent in 2014
  • Starting with a 40% position in Parliament (DPR), his coalition is above 60%
  • Begun more infrastructure projects in 2 years than his predecessor SBY did in 10
  • Sliced away layers of regulations, overhauled investment licensing (some approvals in 3 hours), leading to the first jump in ease of doing business in many years (see story)
  • Instituted a health initiative that will lead to universal coverage
  • Ended costly energy subsidies and the gasoline distribution “mafia”
  • Showing willingness to embrace the “rules based economy” inherent in the TPP and  back away from past protectionist policies ( i.e. mandatory import bans on beef and cattle) and export bans on minerals
  • A tax amnesty program that yielded record reporting of domestic and foreign assets, some repatriation, and the solid basis for adding a significant number of new taxpayers.
  • Strong appointments to police leadership and renewed anti-corruption efforts

Incomplete List

  • Legal and judicial reform although a package may be forthcoming. (See article)
  • Managing fundamentalist, intolerant Islam and wrongheaded legislative impulses such as a halal law (that restrains trade) as well as a proposed law prohibiting homosexuality.
  • Allowing value-added regulations that counter TPP principles and a more open economy: i.e. requiring localization of data servers,  content for cellphones, reinsurance and other products
  • Quick fix approachs to problems such as infrastructure (huge budget outlays to inefficient state owned enterprises), drugs(death penalties), and illegal fishing (destroying ships) rather than empowering the private sector and utilizing more data driven, smart government solutions.

Jokowi is from central Java, and like Suharto projects the region’s characteristic humility, reserve, and inner directed power.   From a Western perspective this can be viewed as weakness and initially he had many skeptics who did not think he would be able to accomplish very much.  However, Indonesians, especially those who knew him, saw Jokowi’s strength and are not surprised with his success to date. Outsiders misunderstood Jokowi because aggression and assertiveness in Javanese narratives (such as the shadow theater) are not strong values for a just leader. They are usually depicted as clouding one’s thinking with catastrophic consequences.

Live a deceptive poker player who hides his cards and may lose a few hands before eventually scoring big, Jokowi seems to be mixing things up just enough to steadily turn things to his advantage. His best moves are probably yet to come.