Time to rethink economic policies in Indonesia

An Indonesian employee fills a car with subsidised fuel at a petrol station in Jakarta, Indonesia, 24 November 2014. Incoming President Joko Widodo has lowered fuel subsidies but, like Susilo Bambang Yudhoyono, has not removed them altogether or linked to global prices. (Photo: AAP).

Author: Ross McLeod, ANU

Economic performance in post-Suharto Indonesia has been inferior to that achieved during the previous three decades, with economic growth slower and income inequality increasing. With the recent election of a new president, now is a good time to focus on improving the quality of economic policymaking.

To begin, how should Indonesia make use of its rich natural resources? Read more…

Good cop, bad cop: can responsible opposition save Indonesia from itself?

The de facto leader of the Red and White coalition, Prabowo Subianto, arrives at the inauguration of President Joko Widodo, 20 October 2014. (Photo: AAP).

Author: Yohanes Sulaiman, Indonesian National Defense University

There is good news and bad news about the recent string of victories of the ‘Red and White’ coalition in the Indonesian parliament. The good news is that unlike previous Indonesian presidents, President Joko Widodo — popularly known as Jokowi — will have to face a critical and probably hostile parliament. This is also the bad news. Read more…

Jokowi’s cabinet a mixed bag

Indonesia's new Cabinet is sworn in. (Photo: AAP).

Authors: Hal Hill and Budy Resosudarmo, ANU

Indonesia’s recently inaugurated president, Joko Widodo (Jokowi), announced his cabinet this week. Jokowi’s policy platform espoused broad philosophies but was short on detail. His cabinet appointments provide the clearest indication to date of his policies and priorities in what in all likelihood will be a decade in power. Read more…

Close enough not good enough for Jokowi’s cabinet picks

New President Joko Widodo shakes hands with Minister of trade Rahmat Gobel during the Working Cabinet's official inauguration at the presidential palace in Jakarta on October 27, 2014. (Photo: AAP)

Author: Edward Aspinall, ANU

Indonesia’s new president, Joko Widodo (Jokowi) promised to bring a new spirit of reform to Indonesia. Indeed, he has offered nothing less than a ‘mental revolution’. In his first real test, the formation of cabinet, Jokowi seems to have gone for realpolitik over reform. Read more…

Balancing the short and long term in Indonesia fuel subsidy debate

Indonesian motorists wait for their turn to fill up their motorbikes with subsidised fuel at a gas station in Yogyakarta, Indonesia, 27 August 2014. (Photo: AAP).

Author: Keoni Indrabayu Marzuki, RSIS

Despite having won the president and vice-president posts respectively, Joko Widodo and Jusuf Kalla will possess little control, if at all, on the formulation of the next Indonesian budget for fiscal year 2015–16. One particular issue that concerns the new administration is the large portion of funds for energy subsidies, particularly fuel subsidies. Read more…

Red and White coalition spells trouble for Jokowi

Indonesian activists and students chant during a protest against a new bill on local elections outside the parliament building in Jakarta on 25 September 2014. (Photo: AAP).

Author: Adelle Neary, CSIS

Many commentators assumed following Indonesia’s 9 July presidential election that members of defeated candidate Prabowo Subianto’s six-party ‘Red and White’ coalition would not want to be locked out of government and would seek to realign themselves with president-elect Joko Widodo (‘Jokowi’). Read more…

Why abolishing direct local elections undermines Indonesia’s democracy

Members of Indonesian parliament speak to Priyo Budi Santoso, the head of the assembly meeting on the local elections bill during a vote in Jakarta on 26 September 2014. (Photo: AAP).

Authors: Jonathan Chen and Adhi Priamarizki, RSIS

A bill that will transfer the election of local leaders in Indonesia from the people to the Regional Legislative Councils is currently being contested. The Indonesian parliament passed the bill to end direct local elections on 26 September. But outgoing President Susilo Bambang Yudhoyono announced on 30 September that he is preparing an emergency presidential decree to overturn the decision and restore elections. Direct elections at the local level — or Pilkada — have been in place since June 2005. Read more…

Indonesia and Malaysia need to focus on a ‘soft’ approach to tackle IS support on social media

A government worker removes ISIS (Islamic State of Iraq and Syria) flags painted on to walls near Veteran Street in Surakarta City, Indonesia, in an attempt to discourage the promotion of the jihadist group in the region, 5 August 2014. (Photo: AAP)

Authors: Stefanie Kam and Robi Sugara, RSIS

In response to the rise in Indonesian and Malaysian fighters joining the extremist Islamic State (IS) group, Jakarta and Kuala Lumpur have taken action to criminalise membership. The Indonesian Ulema Council (MUI), the nation’s top Muslim clerical body, also released a statement that it was haram, or forbidden, for Muslims to participate in IS activities. Malaysian Prime Minister Najib Razak has also issued a strongly worded statement condemning IS for its actions, which ‘run counter to Islamic faith, culture and to common humanity’. Read more…

Why is Indonesia terminating its bilateral investment treaties?

Authors: Leon E. Trakman and Kunal Sharma, UNSW

The value of investor-state dispute settlement (ISDS) procedures has been questioned by Australia and, more recently, Indonesia. The Australian government’s controversial 2011 Trade Policy Statement — stating that Australia would not agree to ISDS in its treaties — caused significant debate. In part, Australia’s policy was motivated by Philip Morris’ legal action against the government over legislation requiring the plain packaging of cigarettes. Read more…

Refining the role of government in the Australia–Indonesia live cattle trade

Indonesian workers unload Australian cattle from a ship in Jakarta, Indonesia. (Photo: AAP).

Author: Ray Trewin, ANU

The governments of Australia and Indonesia have become heavily involved in the live cattle trade. The 2011 Australian ban on live cattle exports to Indonesia, after some animal cruelty was drawn attention to, may have been the blackest day for Australian agricultural politics. And the issues continue, as governments inappropriately use trade policy to address sensitive domestic non-trade issues (like Australian animal welfare and Indonesian self-sufficiency). But government involvement, rather than disadvantaging trade and livelihoods by raising uncertainty and lowering prices as is the case now, could help solve these issues. Read more…

Indonesia’s manufacturing sector needs a new industrial policy

An Indonesian worker makes incense in Malang, East Java, 19 March 2014. (Photo: AAP)

Author: Mohammad Zulfan Tadjoeddin, UWS

The World Bank and Asian Development Bank have recently advocated the importance of Indonesia’s manufacturing sector. Manufacturing is considered a key sector for the advancement of the country’s overall economy and as an important source of formal employment. The reality on the ground since the 1997–98 economic crisis, though, reveals a troubling picture about the sector. Read more…

Indonesia’s cash for health program

A woman cleans outside an informal dentist shop in Jakarta, Indonesia, 18 October 2013. (Photo: AAP)

Author: Margaret Triyana, Stanford University

Indonesia’s conditional cash transfer program, Program Keluarga Harapan (PKH), provides cash to poor households in exchange for meeting specified health targets. It aims to reduce poverty and improve maternal and child health. But does it work? Read more…

The promise of a Jokowi presidency in Indonesia

Indonesian presidential candidate Joko Widodo gestures after delivering his victory address in Jakarta on 22 July 2014 as the General Elections Commission declared Widodo the winner. (Photo: AAP).

Author: Peter Drysdale, Editor, East Asia Forum

Most would concede that the contest that saw the election of Joko Widodo (Jokowi) as Indonesia’s next president was a tough test for democratic transition in Indonesia. The election campaign was certainly one with an edge to it — ‘one of the dirtiest election campaigns in Indonesian history’, as Marcus Mietzner has called it. There are still legal appeals to be heard, but the size of Jokowi’s victory and the very public evidence on the count, make anything but confirmation of the result a most unlikely outcome. Read more…

Can Jokowi transform Indonesia’s economy?

Jokowi inspects an urban development project of his administration in Jakarta shortly before the General Elections Commission declared him of winner of the presidential race. He now faces the daunting task of taking the third-biggest democracy forward as resistance to reform lingers. (Photo: AAP).

Author: Shiro Armstrong, ANU

Indonesia’s president-elect Joko Widodo (Jokowi), who takes up the position in October, has declared he aims to push the growth rate of the economy above 7 per cent a year. The growth rate has been running below 6 per cent a year, and the World Bank and IMF predict that it will continue at 5.6 per cent and 5.8 per cent, respectively, in 2015. Read more…