Asia's Week: Looking for Economic Edge in Looming Indonesia Vote

As the July 9 Indonesian presidential election moved onto center stage in Southeast Asia, world media were forming their take on the campaign. It wasn’t easy because the two candidates by most accounts haven’t staked out recognizable differences on key issues, which boil down to how the country can regain its economic mojo.  An absence of such choice would be discouraging.

But still the race is intriguing for style and symbolism.  The early favorite, Joko Widowo, aka Jokowi, is a popular young mayor of Jakarta renowned for his unassuming ways but mostly for actually getting major projects under way and without serious allegations of graft. That has helped him stand apart in a nation where ceremony holds and power corrupts but major leaps have in recent years come more gradually and not necessarily more honestly.  The outgoing leader, Susilo Bambang Yudhoyono, got early points for integrity and later demerits for inaction. Indonesia is still starved for public infrastructure and other underpinnings of smoothly functioning commerce.

This has opened the door for what has been billed as the “strongman” option, cashiered Gen. Prabowo Subianto.  Reports this week suggested that the former officer, who widely goes by Prabowo, was gaining ground. Although well-connected in the Indonesian elite, he was stigmatized by association with the heavy-handedness of the country’s military through 1998. In the years since, that old-style governance associated with the long tenure of autocrat Suharto  (who was Prabowo’s father-in-law) has been in bad odor.  The winds seem to be shifting, however.

No surprise, the strongman has a nationalist bent to his rhetoric, including on economic policy.  In a place where protectionism, especially with regard to energy and mineral exports, is already a deterrent to investment, this is hardly fresh thinking.  Some have likened his pitch to that of Sukarno, Indonesia’s founding leftist ruler, who ironically gave bitter way to Suharto, back then in uniform himself. And naturally most liberal globalists recoil from such talk, and from the prospect of Prabowo.  An article by Vikram Nehru, a former top World Bank economist for Asia, published by Japan’s Nikkei, does so in measured terms but most notably credits opponent Jokowi with more market-oriented views on development. These have not been easy to discern as both hopefuls appeal to populist themes.

Prabowo’s running mate, princely ex-minister Hatta Rajasa, liked to tout reformist ideas while a ranking economic deputy in Yudhoyono’s second term (he was featured in this vein in a cover story in the licensed edition Forbes Indonesia, not online), but they were more grand than real and came to little.  By comparison, Jokowi’s vice president would be Jusuf Kalla, who held the title in Yudhoyono’s more productive first term and is a former central banker.

If Nehru’s take is right, then all the electioneering is masking what could be a meaningful divide on election day. And that would make the current forgiving context for Prabowo and the old guard a bit of unfortunate timing.

An essay in Foreign Affairs by Elizabeth Pisani, author of a well-received new book on Indonesia, argues that rapid post-Suharto decentralization of the country’s politics–especially the expenditure of public funds–has contributed to muddling the national decision-making such that Jokowi’s chances for an election mandate were whittled away in an initial round of parliamentary voting earlier this year.  It’s also why activity from whale harvesting to illicit timber cutting goes on despite edicts from Jakarta.  (Yet despite the decentralization, Pisani notes, the capital island of Java, with 58% of Indonesia’s population, had amassed 83% of its medium-sized and large industries by 2012.)

Of course, diffused power also has provided for the rise of new breed of action-oriented local politicians, with seemingly cleaner hands, of whom Jokowi is a prime example. But countrywide, this may not be their moment, especially with tycoon money and media power moving behind Prabowo.  Some big-businessmen may simply believe that a more authoritarian figure is more likely to clear the economic underbrush, although this has historically been a dicey wager.

It should be noted–and even the most economically blind account is likely to do so–that Prabowo’s bigfoot nature got him in human-rights hot water, one reason for his years in the political wilderness.  He still, in fact, is barred from travel to the U.S.–a sanction that is likely to be undone if he is elected, as it was for India’s new prime minster, Narendra Modi.

In Modi, however, the new president of Indonesia, be it Prabowo or Jokowi, could find a more important comparison.  Modi is starting off his term, at least, as a heavyweight with the expressed intent to open up India’s economy. If he does, that will put Indonesia’s opportunity–or failure–to do the same in a stark light.  (The chosen Indonesian is, alas, likely to be hobbled by horsetrading among factions, whereas Modi’s party got a mandate. Even the vote count in a tight race could drag on across the archipelago.)

India in this instance may have raised the bar higher than the other huge democracy Indonesia is prepared to scale. But it will help if first, Indonesians and those who cover their ballot can know just how the election results really could matter.

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