December 2022
AIIB ASEAN ASEAN (R) ASEAN-ISIS Asia Big Tech CH: Hong Kong Country (R): Indonesia Country (R): Malaysia Country (R): Myanmar Country (R): Singapore Country: ASEAN Country: Australia Country: Cambodia Country: China Country: Germany Country: India Country: Indonesia Country: Japan Country: Laos Country: Malaysia Country: Myanmar Country: North Korea Country: Philippines Country: Qatar Country: Russia Country: Singapore Country: South Korea Country: Taiwan Country: Thailand Country: UK Country: United States Country: US Country: USA Country: Vietnam covid-19 DE: 5G DE: Data privacy DE: Data security DE: Facebook Digitalisation Elections: Indonesia 2019 Elections: Thailand 2019 ESG: Climate Change ESG: Diversity ESG: Energy ESG: Green Finance ESG: Green Growth ESG: Haze ESG: Human Rights ESG: Modern Slavery ESG: Peatland ESG: Riau ESG: Smallholders ESG: Sustainability ESG: Sustainable/Green Infrastructure European Union Event: SDSWR Events: AAF Fukushima Global Citizens Singapore Google Indonesia: Jokowi Institute: ERIA Institute: SIIA JP: Abenomics Leaders: Kim Jong Un Leaders: Lee Hsien Loong Megatrends: Populism MM: Aung San Suu Kyi MM: NLD MM: Rakhine State MY: Anwar Ibrahim MY: GE14 MY: Mahathir Mohamad MY: Najib Razak New Horizons New Zealand Nicholas Fang Oh Ei Sun Recovery Region: Latin America Region: Middle East Reports Security: South China Sea Security: Terrorism SG: Lee Kuan Yew SG: SG Secure SG: Smart Nation SG: Society Simon Tay Sustainable infrastructure Topic (R): Belt and Road Topic (R): Business Topic (R): Digitisation Topic (R): Economy Topic (R): Green Finance Topic (R): Haze Topic (R): Infrastructure Topic (R): Palm Oil Topic (R): Peatland Topic (R): Smallholders Topic (R): Sustainability Topic: Anti-Globalisation Topic: Belt and Road Topic: Business Topic: Coronavirus Topic: COVID-19 Topic: Deforestation Topic: Development Topic: Digital Economy Topic: Digitisation Topic: E-Commerce Topic: Economics Topic: Economy Topic: Elections Topic: Environment Topic: ESG Topic: Finance Topic: Global Citizens Topic: Globalisation Topic: Human Trafficking Topic: Indo-Pacific Topic: Infrastructure Topic: Investment Topic: Labour Topic: Nuclear Topic: Palm Oil Topic: Race Topic: Regional Integration Topic: Religion Topic: Security Topic: Singapore-Malaysia Relations Topic: Small States Topic: Trade Trade: AEC Trade: CPTPP Trade: FTA Trade: Multilateralism Trade: RCEP Trade: TPP Trade: War Trends (Digital): Cybersecurity UK: Brexit United States US: Obama US: Trump US: Trump WEF youth

Derailed? COVID-19’s Implications for Jokowi’s Ambitions

04 Jun Derailed? COVID-19’s Implications for Jokowi’s Ambitions

Hopes were high for Indonesian President Joko Widodo “Jokowi” as he entered his second term in 2019. Jokowi aimed to make Indonesia more attractive to foreign investors through a series of “omnibus” bills, In addition, infrastructure drive and anti-corruption efforts from his first term were poised to be expanded upon. However, the COVID-19 outbreak put a damper on these initiatives, and it remains to be seen whether Jokowi will be able to fulfil them. The Singapore Institute of International Affairs (SIIA) held an online seminar on 28 May 2020 with Mr Helmi Arman, Director and Chief Economist for Indonesia at Citi, and Mr Achmad Sukarsono, Senior Analyst, Global Risks Analysis Asia-Pacific at Control Risks to discuss COVID-19’s implications for Indonesia’s economy and Jokowi’s policies.

The session was moderated by Associate Professor Simon Tay, Chairman of the SIIA. A recording of the session is available as a premium resource for our corporate partners, and a summary of the points discussed can be found below.


Derailed to a Large Extent

Indonesia’s opportunity to capture supply chains has not changed with the onset of COVID-19, as companies still seek to diversify away from China. What has changed, however, is the state of the Indonesian economy. With numerous sectors in distress, the government has launched five stimulus packages to reinforce social and financial sector stability, mindful that the collapse of either could deter foreign investors.

Nonetheless, COVID-19 has diminished the prospects for Jokowi’s three main ambitions. Unions gained political leverage as the economic fallout worsened, forcing Jokowi to shelve efforts to amend Indonesia’s labour laws, considered to be the “crown jewel” of the job creation omnibus bill. Key infrastructure projects such as the Jakarta-Bandung High Speed Rail and the new capital city were suspended or delayed, their financial future jeopardised as funds were reallocated to bail-out construction companies. Meanwhile governance reforms, already set back last year as Jokowi bowed to coalition members who sought to rein in the power of the Corruption Eradication Commission (KPK), appear unlikely in the near future.

Indonesia’s Political Future

Jokowi’s political position appears to be stable due to a lack of opposition, notwithstanding rising tensions between the central government and the provinces. The main conflict within his coalition is the question of when and how Indonesia should reopen, and Jokowi has had to strike a balance between the two. Ultimately, he is expected to adopt a more nationalistic approach to help local companies at the expense of foreign counterparts.

Is China the Answer?

The concerns of foreign investors would not be foremost in Jokowi’s mind in the coming months, but those that learn to align with his coalition’s objectives stand to benefit. One country that has learned to do this is China. Its investors have proved willing to invest in projects that western counterparts shun, and there are rumours of Chinese offers to invest in the new capital city. Such a scenario where China plays a larger role in the economic recoveries is expected to play out globally, not just in Indonesia.