Jokowi 2.0: Policy, Politics, and Prospects for Reform

On October 20, Indonesian president Joko Widodo, universally known as Jokowi, will be sworn in for a second and final five-year term. Elected with over 55 percent of the vote in a rematch of the 2014 presidential election against retired general Prabowo Subianto, Jokowi initially appeared poised to move boldly into his second term with a focus on enacting key economic reforms to boost stagnant growth. But Jokowi is already facing headwinds with massive street protests against a recently passed law that will diminish the highly-respected Corruption Eradication Commission and a proposed bill to reform the penal code, which would have deleterious impacts on personal freedoms. An upsurge in tensions in perennially restive Papua is also drawing attention. As a result, days ahead of the inauguration, Jokowi is seeking to calm the waters with outreach to a myriad of constituencies, including political rivals. Below are the critical questions for policymakers, businesses, and political observers to consider when trying to forecast what lies ahead for Jokowi 2.0.

Q1: What will be President Jokowi’s policy priorities?

A1: As in his first term, economic growth and reducing inequality will be President Jokowi’s top priorities. Infrastructure was a particular focus during his first term and will continue to be a key policy priority over the next five years. Jokowi has also signaled that “human capital development” will be a signature focus in his second term, which reflects a recognition that Indonesia’s workforce development is falling short and that Indonesia is failing to capture investment that is going to other Southeast Asian countries. Passing reforms to promote the manufacturing sector will be central to this effort, although the political hurdles to passing these badly needed reforms may prove insurmountable, for example tackling the rigid labor laws that have impeded investment but have strong political support from Jokowi’s Partai Demokrasi Indonesia Perjuangan (PDI-P) party. Jokowi has also signaled he would open new sectors for international investment, but details have been sparse. What does seem clear is that the foreign investment coordinating board will be upgraded to a full ministry, which may better highlight key reform issues for the cabinet.

Meanwhile, the idea of moving Indonesia’s capital from Jakarta to East Kalimantan, which has been mooted for decades, has taken on astonishing momentum in recent months. If plans move forward, which is increasingly likely, the move could easily suck up enormous time, attention, and resources in Jakarta, detracting from reform efforts.

Q2: Who’s in charge?

A2: Despite being only days away from the inauguration, the composition of the cabinet remains a matter of intense speculation and uncertainty. Most notably, negotiations are ongoing with his archrival Prabowo and his Gerindra Party that could lead to perhaps three seats for Gerindra in a cabinet of 34. Jokowi also recently met with former president Susilo Bambang Yudhoyono whose Democrat Party may also join the coalition and cabinet despite not formally supporting Jokowi’s candidacy. The appeal of a unity government is political stability and a halt to personal attacks on Jokowi from Prabowo’s conservative base (likely stoked quietly by Gerindra leaders). However, unity will also likely lead to inertia, with even fewer checks on the vested interests of the oligarchs who lead Indonesia’s major political parties.

Meanwhile, Jokowi’s coalition partners are also angling for cabinet posts, generally those that can direct resources according to their interests. Notably, Jokowi has pledged that 55 percent of the cabinet will be composed of “professionals” rather than political party leaders, with the core economic team expected to be filled by technocrats, including the current finance minister Sri Mulyani in some capacity. He has also said the cabinet will include millennials as well as at least one ethnic Papuan.

One final mystery is the role that Vice President Ma’ruf Amin will play. A Muslim cleric who has led the Ulema Council of Indonesia and Nadhlatul Ulama (NU), Indonesia’s largest socio-cultural organization, Jokowi chose Ma’ruf as his running mate to shore up his Islamic credentials, particularly in NU’s Javanese heartland. While outgoing Vice President Jusuf Kalla, a businessman and former political party leader, was able to stand in for Jokowi with investors and foreign governments, it is unclear what role Ma’ruf will play and how significantly his religious views will influence policy development across the board, from the criminal code to foreign policy.

Q3: What’s next for Indonesian foreign policy and U.S.-Indonesia relations?

A3: President Jokowi has not demonstrated a great deal of interest in Indonesia’s international relations and has tended to view foreign policy through a narrow lens of attracting investment to deliver on his infrastructure development goals. To this end, China and Japan emerged as key partners in his first term. Looking ahead, the creation of the new U.S. Development Financial Corporation, geared toward expanding infrastructure financing in the region, will make the United States a more appealing partner as well. Jokowi has also been eager to strike trade deals, concluding an agreement with Australia in 2019 and launching negotiations with the European Union. Jokowi is likely to continue to focus on foreign policy priorities that deliver tangible domestic economic benefits.

Closer to home, the Association of Southeast Asian Nations (ASEAN) will remain a key pillar of Indonesian foreign policy. Although Jokowi himself has not demonstrated the traditional level of interest in ASEAN as his predecessors have, it is notable that his Foreign Minister Retno Marsudi led the effort to develop ASEAN’s “Outlook on the Indo-Pacific” that has put ASEAN’s stamp of approval on the Indo-Pacific construct.

In terms of U.S.-Indonesia relations, the bilateral relationship continues to chronically underperform, yet ties are warm and most aspects of the relationship are growing incrementally closer. A particular bright spot is security cooperation, where a resumption of full ties with Kopassus, the Indonesian Army special forces, appears imminent, long an irritant to the relationship. On the economic side, U.S. companies will be looking closely at the new cabinet and other signals regarding economic reforms to see if they can do their part to develop the relationship further. Politically, the relationship could use a jolt of energy, something that a first Jokowi visit to Washington during the Trump administration could provide.

Q4: What about broader trends in Indonesian politics, such as the role of Islam?

A4: Persistent attacks on Jokowi’s Islamic credentials during the election and his choice of Ma’ruf as running mate tell a lot about the politics of religion in Indonesia, where Islam has become an increasingly central part of civic life and of many voters’ identities. While many have pointed to the Islamization of politics in Indonesia, perhaps the bigger story is a rift within the Islamic community in Indonesia, which pits adherents of a traditional, syncretic, and tolerant form of Indonesian Islam against more conservative forces. With Ma’ruf a leading figure in the former camp and Prabowo galvanizing the latter, this rift is set to color politics over the next five years. Meanwhile, public backlash by urban millennials against the proposed revisions to the penal code that would criminalize sex outside of wedlock, same-sex relations, and abortion—as well as enact stiff penalties for insulting the president—highlight the contentiousness of the role of Islam in the state. As candidates position themselves for the 2024 presidential election in coming years, they will no doubt be testing the political winds on these issues.

Amy Searight is senior adviser and director of the Southeast Asia Program at the Center for Strategic and International Studies in Washington, D.C. Brian Harding is a fellow and deputy director of the CSIS Southeast Asia Program.

Critical Questions is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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Brian Harding

Brian Harding

Deputy Director and Fellow, Southeast Asia Program

Amy Searight