Commentary by Wayne Forrest

Saying anything about a Trump Administration and its effect on US- Indonesia relations now could prove to be a fool’s enterprise, but this month’s commentary will take a shot, doing so by way of the controversy surrounding Basuki “Ahok” Purnama’s troubled bid to remain Jakarta’s governor.

With the precedent set by Jokowi, the Jakarta governorship is now a stepping stone to the Presidency. The race is turning out to be a political proxy fight wrapped in a religious tolerance issue.  As the US presidential race demonstrated polls are not always an accurate indication of final voter preference and misinformation can play a major role in changing voter sentiment.  No one knows whether Ahok has the ambition to follow his predecessor Jokowi as President but its clear that a “ho hum” race (Ahok held 20 point margins over his two rivals, Agus Yudhoyono and Anies Baswedan as late as September) has turned into a barn burner since Ahok’s remarks on people misusing a verse of the Koran to only vote for a Muslim went viral and became a convenient catalyst for rivals to push hard against President Jokowi’s administration by first demanding the arrest of his former subordinate for blasphemy.  Any notion that Jokowi’s 2019 reelection will be fairly easy –given his artfully crafted majority coalition– is fast receding.

The threat of further violence posed by the huge November 4th anti-Ahok demonstration has obsessed the police, the military, as well as the President, who has said little about possible changes to the world’s security and trade architecture following Trump’s election. After a serious internal debate within the police, charges of blasphemy (under an arcane law with very general provisions) were brought against Ahok in deference to the demonstrators, many of whom were not even from Jakarta.  The Jokowi government clearly calculated that not filing the charges would have made things worse.  As a result, a large rally planned for November 25th by “supposed” hardliners demanding Ahok’s arrest has been postponed until Dec. 2 and limited to a park rather than city streets.  I say “supposed” to make the point that in the murky world of Indonesian politics, nothing is as clear as it may seem; the hardliners can be someone else’s creation or at the very least their paid proxy.  For example, considerable speculation exists that former President Yudhoyono is supporting those opposed to Ahok not just because his son is running but also out of concern that ongoing investigations of actions taken when he was President could implicate him or members of his family.  Some see a Jokowi-SBY confrontation down the road.

Ahok has in the past successfully fought off opponents who played the religious and ethnic card (he is Christian Chinese) and Jakartans have shown their religious tolerance time and again.  But in another parallel to the US election, what was once taken as a given can shift, especially in the era of social media, which has become wildly anti-Ahok.  What a shame to see a popular and highly competent government official –who has fixed Jakarta’s leaky storm drains literally and figuratively–taken down because of his free speech. Ahok is soldiering on and can stay in the race even when his case goes to trial but things are not looking good at the moment. Meanwhile Indonesia’s reputation for religious tolerance and pluralism is suffering. The irony is that Indonesians are saying the same thing about the US.

What little has been said by Indonesian leaders about Trump and his possible policies boils down to: world trade is declining, we need to build infrastructure and grow our consumer economy, let’s wait and see what the US does.  But what of the structural reforms embedded in the TPP that Jokowi embraced as a way to push Indonesia to compete in an increasingly globalized economy?   These will likely take a back seat or be put on hold.   On the US side, trade enhancement tools such as GSP could easily be viewed as net losses of US jobs and summarily scrapped.

Indonesia, always a pragmatic balancer of superpowers, will likely now join China’s TPP alternative RCEP (regional comprehensive economic partnership).  But TPP was about rules and RCEP is about tariffs.  If a Trump Administration cares only about tariffs and thwarting US imports, the inside deal makers that oppose Jokowi and Ahok and support zero sum economic policies will only be emboldened.   The Economist likens the situation today to when Ronald Reagan was elected in a similar atmosphere of “make America great again”. Indonesia in 1980 was by and large a protected economy that appealed to only a handful of multinationals.   We do not want to go back to those days.

Both governments need to realize 4 essential truths: (1) the US depends on Indonesian tropical commodities such as rubber, coffee, spices, palm oil, wood products, and botanical extracts/essential oils; (2) 60% of Indonesia’s capital markets is foreign-sourced money, much of it from the US; (3) although the US is not Indonesia’s largest trading partner it is the largest market for its manufactured products; (4) Indonesia’s huge and growing number of middle class consumers are big fans of US brands.   Trump’s election exposed the cracks in the global economic system built after WW II. They can be repaired if we keep these truths in mind.