A Southeast Asian Giant at the Crossroads

A Southeast Asian Giant at the Crossroads
Photo by Silas Baisch on Unsplash.

Indonesia today stands at a crossroads as the Southeast Asian giant prepares for newly elected Prabowo Subianto to succeed Jokowi, the popular two term President. This October, Jokowi will hand over power to his preferred and, for many, surprising successor. The difference in background, style and expectations between the two leaders could not be more different.  Before turning to the new President, let’s recall the early Jokowi years.

Anybody living in Jakarta in 2014-16 had high hopes for Indonesia. The new President did not carry the usual baggage – he was not from a wealthy family, nor did he have any military experience. He was a humble entrepreneur, determined to make a difference to the lives of his fellow citizens.  He came across as detail oriented with a laser like focus on economic development, often making surprise visits to government projects to check on progress.

Jokowi’s elected office experience as small city mayor and Jakarta governor had developed him into a wily political coalition builder.  Minority groups waited to see progress in basic human rights including reconciliation for the murderous violence beginning in the 1960s right up to the fall of Suharto in the late 1990s. Expectations for the new pluralist were high.

Furthermore, the economic growth rate of ASEAN’s biggest country rivalled that of China. It was forecast that Indonesia would become the world’s 5th largest economy by 2040 and the 4th largest by 2050. Jokowi brought back as Finance Minister a star economist, Sri Mulyani who had been managing director of the World Bank in Washington. The ease of doing business index was improving as foreign businesses sensed a political will to make major economic reforms.

Indonesia was seen as an outstanding example of how Islam and democracy could successfully co-exist. Indeed, Canada featured in this regard. Starting in the 1950s, Indonesia’s relatively moderate form of Islam attracted hundreds of students to McGill University’s Institute of Islamic Studies.  While living in and travelling around Indonesia, I met scores of McGill graduates including the Grand Imam leading Southeast Asia’s biggest mosque. There were high hopes for Indonesia.

In contrast, President-elect Prabowo today faces big challenges to his ambitious, dynamic country.  The building of a new national capital Nusantara from scratch in the middle of a rainforest is costing more than USD 34 billion. At the same time, a new seawall to protect the current sinking capital Jakarta will cost at least USD 10 billion. Meanwhile, foreign debt in 2023 jumped to USD 394 billion or 29% of GDP. Much of that debt is owed to China.

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What obstacles does Prabowo face? Some are his own. First, he has never been previously elected.  He is known to be strong willed, not particularly conciliatory, unlikely to take much advice so influence could be limited as he makes policy on the fly and can hold grudges. Some wonder to what extent he reciprocates loyalty. He is known for fiery nationalistic rhetoric in his speeches. His record as Defense Minister seeking, for good reason, to modernize the air force and navy paid little heed to budgetary impact.

So will we see a continuation of Pancasila-rooted Widodism or something that leans more toward old-style ‘guided democracy’?  It will be important to see who Prabowo appoints to his Cabinet.  The strength of Prabowo’s Gerindra party and whatever coalition he can assemble in Parliament to gain control of the Speaker position will affect how well he can implement his agenda including constitutional reform which could put at risk a quarter century of democratic gains. Jokowi’s old party, the PDIP, is expected to form the Opposition, a vital role in any democracy. The Vice President role is weak so whether Jokowi can continue to moderate, through his son, the political agenda beyond his Nusantara legacy is questionable.

The biggest challenge confronting Indonesia’s new leadership is strengthening institutional governance for a young democracy to be able to deliver more for its citizens and reduce polarization. Corruption remains the biggest barrier to progress. The anti-corruption agency has been weakened.  A too narrow tax base means that public services are underfunded and civil servants, including the police and judiciary, are underpaid. This makes them vulnerable to rent-seeking corruption.  Tax reform is therefore needed to broaden the national revenue base to be able to fund public pensions and deliver decent healthcare and education which are the tangible results voters are demanding.

Today’s Indonesian education is heavily oriented to rote learning and in many cases Islamic curriculum which does not always encourage critical thinking and practical skills so necessary in a modern society. Saudi funding for expanded madrassas compounds the problem. In the past 10 years the wearing of the hijab by women has increased exponentially. At the same time, LGBTQI and other minorities, including Christians, feel vulnerable in the face of sharia-based blasphemy laws and other discriminatory policies.

The people have spoken. Can the new President choose the right direction for this remarkable country? 277 million Indonesians are watching in great anticipation.


The environment continues to deteriorate because the oligarchs responsible for the mining, burning and export of coal interests have a lock on many politicians. This stifles efforts by the international community to help buy out and close coal production. Policies to expand renewables are also constrained by vested interests wedded to fossil fuels, including in the expanded state-owned enterprise sector.

Comparing the rise of Prabowo, former son-in law of Suharto and President Marco Jr, son of the former Philippines dictator makes one wonder about whether dynastic politics can send either country down the right path. The victory of Marcos was mainly the result of his popular predecessor’s daughter running as VP running mate. Prabowo finally won the third time round by this time having his popular predecessor’s son as VP on the winning ticket. Like Marcos, Prabowo may wish to prove his critics wrong. What does that say about democracy in Southeast Asia? Perhaps there is no true universal democracy model but rather many variants affected by culture, history, elites and how equal the society is. The people have spoken. Can the new President choose the right direction for this remarkable country? 277 million Indonesians are watching in great anticipation.

This blog is Part 3 in a three part series by Peter MacArthur. Read Part 1 here and Part 2 here.

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