With a second term in the bag, what will Jokowi's priorities be?

Joko Widodo’s electoral victory in the recent Indonesian presidential election faces a legal challenge by his defeated opponent, but the incumbent is not expected to be troubled by that, going by the 2014 precedent when the court ruled a similar challenge in Mr Widodo’s favour.

With his expected inauguration not until October, Mr Widodo’s first task will be to seek some sort of resolution of the deep and extremely bitter gulf that emerged between his supporters and the fanatical backers of challenger Prabowo Subianto.

It is an unenviable chore and one that is probably impossible to achieve in full, such is the degree of poisonous bile that continues to be spewed out in the public space. Some will never be convinced that Mr Widodo is anything less than a cheat and a fraud.

The president will need to weigh carefully how tough he should be on those who have transgressed against the law. To be too tough will cause further resentment, but to be too lenient will lead them to believe he is weak.

He might also care to indulge in some introspection over why he has attracted such venom and lawlessness, while Islamist elements piggy-backed on Mr Subianto, even though he is visibly less religious than the incumbent.

Sheer convenience does not quite explain why key figures such as Amien Rais and Kivlan Zen became so diametrically opposed to a second term for Mr Widodo.

On issues of policy, President Jokowi — as the world knows him so well as — will strive to maintain Indonesia’s development curve and improve it above the current level of 5 per cent growth. First of all, he needs to find ways to cut the nation’s dire trade deficit, which hit a new record of US$2.5 billion in April.  

One policy aims to replace imported fuels with home-grown oil and gas and biofuels. That makes sense. After all, Brazil for many years has been using an ethanol mixture derived from its sugar production to fuel its vehicles.

But President Jokowi also needs to look again at his policy of subsidising fuel and electricity.

He received wide-ranging applause early in his first term when he cut back subsidies, but a promise to review prices every six months and raise them in line with global prices was quickly forgotten and subsidies were handed out again to an Indonesian populace that seems to believe it has a right to cheap fuel.

The president has let Pertamina and state utility PLN pick up the tab, weighing heavily on the bottom lines of these two important companies.

In the end the Indonesian government has to foot the bill since dividends from the two state-owned enterprises have naturally shrunk, but the subsidy figure hasn’t looked so bad on the annual budget. Pertamina said last year that it incurred Rp5.5 trillion (S$529 million) in losses from selling fuel below market value.

Now, with the elections out of the way, the president could raise prices slowly without the fear of a backlash. This will, however, automatically cause a spike in inflation and reduce purchasing power, impacting on growth. This is exactly the opposite of what President Jokowi wants.

To help him decide how to act on this and so many other economic issues, he needs some fresh talent in the economic ministries.

Sri Mulyana Indrawati is a safe hand at Finance and Bambang Brojonegoro appears to have found favour as the ideas man at the National Planning Agency (Bappenas).

Tom Lembong has played a useful role in questioning policy from his post at Investment Coordinating Agency BKPM but President Jokowi may not appreciate his frankness. The other ministers are infinitely expendable.

Much positive work has been done on social services but the president has given too little attention to two major issues: the severe nutritional shortfalls for about 30 per cent of the population that leads to stunting and limits the potential of individuals, and the abysmal educational standards in so many areas that produce second-class citizens.

There has been lots of talk about the latter, but little sign of any real change.

President Jokowi also needs to come clean on his climate change commitments. If he is serious about meeting the pledge to reduce emissions by 29 per cent in 2030, he will need to shake up the Energy and Natural Resources Ministry and PLN, both of which seem addicted to coal.

Meanwhile talk about turning Indonesia’s wealth of nickel resources into an electric vehicle industry is not realistic, leaving the country struggling to look for ways to boost manufacturing.

On foreign affairs, there are no overriding concerns. The country will continue to rely on its “thousand friends and no enemies” approach, which has served it well.

The biggest challenge is to continue to pacify China and steer a careful course between demands from the emerging superpower and the United States for Indonesia to commit to a closer alliance.  

Mr Widodo has shown no great interest in human rights during his first term and that is not likely to change.

This, perhaps, is what concerns the likes of Amien Rais and Kivlan Zen. The relaxation of controls on personal freedoms at the end of the Suharto regime allowed not only liberal groups but also the Islamist fringe to adopt a stronger public profile.

Groups such as the Islamic People’s Forum and the Islamic Defenders Front successfully grabbed centre stage.

Now, a more intolerant administration that went so far as to ban Hizbut Tahir Indonesia threatens to reverse some of those freedoms, with the apparent aim of creating a more orderly and restrained Indonesian society lined up firmly behind the Pancasila ideology.  

Mr Widodo needs good fortune and plenty of help to achieve his goal of turning his country into a top-10 global economy.

Given the difficulties imposed by its archipelagic geography and his often fractious people, the next five years will be critical.

ABOUT THE AUTHOR:

Keith Loveard is a senior analyst at Concord Consulting, a Jakarta-based business risk consultancy. He has lived and worked in Indonesia for almost 30 years.