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Indonesian President Joko Widodo at Admiralty House, Sydney Tuesday, July 4, 2023
Indonesians force government to shelve election law overhaul
The government is now promising there will be no changes to election laws before the November polls. Conceding likely saved them from having to deal with more protests planned for Friday, but it also cleared the way for Anies to stand for governor of Jakarta, an influential post that would position him to grapple with his political rivals.
That — and the fact that the protests triggered a sharp drop in the rupiah and Indonesian stocks — could cause headaches for the incoming Prabowo administration. It will be under pressure to match Joko’s economic achievements, which were accompanied by significant democratic backsliding.
We’re also keenly watching the effort to move Indonesia’s capital from Jakarta – Anies’ base of power – to Nusantara, a new city being built in the pristine (and thus politically untainted) jungles of Borneo where Subianto might operate without as much flak.
University students gesture as they shout slogans during a protest against planned controversial revisions to election law outside the Indonesian Parliament building in Jakarta, Indonesia, on Aug. 22, 2024.
Hard Numbers: Indonesian protesters attempt to storm Parliament, PwC expects China ban, Revenge of the non-competes, Golden era, How many Indians are there?
1,000s: Thousands of Indonesians attempted to storm the Parliament building in Jakarta on Thursday, clashing with police, tearing down fences, and ultimately forcing legislators to delay a vote that would overhaul election laws. The proposed changes would enable current President Joko Widodo’s son to take a regional governorship despite being too young and make it easier for Widodo to influence politics through his political party. Protests were also reported in other major cities across the vast archipelago.
6: Consulting powerhouse PwC’s Chinese branch told its clients it expects to be hit with a six-month ban on doing business in China as punishment for auditing the collapsed property developer Evergrande. PwC said in March that Evergrand had inflated its assets in China by $80 billion before defaulting on debts in 2021.
30 million: Bad news for the roughly 30 million American workers who thought their binding noncompetes had been rendered void by the Federal Trade Commission: A court has overturned the FTC’s regulation. District Judge Ada Brown of Texas wrote the ban was “arbitrary and capricious because it is unreasonably overbroad without a reasonable explanation.” The FTC says it may appeal.
2,531: The price of gold reached $2,531 per troy ounce on Tuesday, a record high, as the continuing bull market in the metal has begun to attract investors in Western economies. Chinese consumers have been driving the price up by investing in gold as a stable alternative to their topsy-turvy property and securities markets, but with the US Federal Reserve eyeing a rate cut in September, prices may be buoyed further as money flows out of US bonds seeking higher returns.
15: Indian officials plan to conduct a long-postponed census next month and aim to publish the results in 2026, resulting in a 15-year gap between polls rather than the customary 10. The census – likely the world’s largest ever – was meant to be done in 2021 but was delayed by the pandemic. New Delhi has faced ardent criticism from the civil sector for the delay, as the country’s rapidly growing population and economy need to be accurately accounted for to ensure the government’s programs are fit to task.
British Prime Minister Rishi Sunak speaks during a Conservative general election campaign event, in London, Britain June 24, 2024.
Hard Numbers: Sunak shows up, Indonesia busts cyber racket, US sentences drug-trafficking ally, West Africa puts a price on security
50-50: British PM Rishi Sunak may be on the ropes these days — his polling numbers are in the gutter, his party is engulfed in a betting scandal, and he even got roasted by Menswear guy. But in his debate against Labour leader Keir Starmer this week, he managed to perform well enough (hammering Starmer for having no real plan for “change”) that straw polls showed a 50-50 tie. Still, with Labour ahead by double digits going into the July 4 election, Sunak’s days are numbered.
103: Indonesian authorities arrested 103 foreign nationals suspected of being part of a cybercrime syndicate on the island of Bali. The suspects – who included citizens of Taiwan, China, and Malaysia – had reportedly been abusing their residence permits as well. Indonesia’s rapidly growing e-commerce and tech scene has made the nation particularly vulnerable to cybercrime: It ranks eighth among Asia-Pacific nations when it comes to cyber security.
45: A US judge has sentenced the former president of Honduras, Juan Orlando Hernández, to a whopping 45 years in jail on drug trafficking charges. Hernández, 55, was convicted of accepting millions in bribes to conceal cocaine shipments to the US during his time as president from 2014 to 2022. The irony? He was publicly working with Washington in the War on Drugs.
2.6 billion: What’s it gonna cost to protect West Africa from terrorism and coups? $2.6 billion a year, according to ECOWAS, a regional bloc. Meeting in the Nigerian capital of Abuja, the organization said it would need a 5,000-strong force to help keep order in a part of Africa that is suffering rising jihadist violence which has contributed to a rash of coups.
Indonesian Defense Minister and presidential candidate Prabowo Subianto salutes supporters after delivering a speech at the Jakarta Convention Center during a campaign rally in Jakarta, Indonesia, on Feb. 2, 2024.
Prabowo Subianto set to win Indonesian election
Indonesians voted in the world’s biggest single-day election yesterday, where 259,000 candidates vied for 20,600 posts across the archipelago of 17,000 islands.
It may take up to a month for all the votes to be counted in the world’s fourth most populous country. But early results show the skull cracker-general-turned-teddy-bear Prabowo Subianto leading the presidential candidates with 58% of the vote.
Prabowo is the former son-in-law of Suharto, a dictator toppled in 1998, and has a troubling human rights record from his time as special forces commander. Ahead of the race, he recast himself as a loveable grandfather figure, aided by an unofficial endorsement of the popular president Joko Widodo, aka Jokowi, and the president’s eldest son, Gibran Rakabuming, who is running as Prabowo’s vice president.
Prabowo's campaign focused on continuing Jokowi's legacy and was fueled by a strong youth vote. In Indonesia, the majority of the electorate is under 40 years old, good news for Prabowo, who is more popular among younger voters than those who have lived through his controversial political career.
He is 25 points ahead of the next two candidates and will be tasked with sustaining Jokowi’s strong economy and combating high youth unemployment when he wins.
Indonesia's Defence Minister and presidential candidate Prabowo Subianto is gesturing to his supporters during an election campaign rally at the Gelora Delta Stadium in Sidoarjo, East Java, Indonesia, on Feb. 9, 2024.
Will Indonesia choose a military officer-turned-cuddly grandpa for president?
Voters in the world’s third-largest democracy will go to the polls on Wednesday to choose their next president. The popular incumbent Joko Widodo, aka Jokowi, is barred from running for reelection by term limits and has thrown his support behind three-time presidential candidate Prabowo Subianto, a former military officer and the current defense minister. Thanks to this support, in addition to generous campaign promises and a slick image makeover, Prabowo, 72, appears well-positioned to join the club of septuagenarian world leaders. We asked Eurasia Group expert Peter Mumford how this came about.
What are the main issues in the election?
Cost-of-living concerns and inequality are key themes, which Prabowo in particular is seeking to tap into with generous — but costly — spending promises such as free lunches for students. In previous contests, divisive identity politics have shaped voter preferences, but there has been less of that in this election.
Both Prabowo and former Central Java governor Ganjar Pranowo offer continuity from Jokowi’s administration albeit with some differences — Prabowo would be more nationalist and populist, Ganjar likely more business-friendly. Former Jakarta Gov. Anies Baswedan is running as the “change” or “anti-Jokowi” candidate.
That said, personalities, rather than issues or policies, tend to drive elections in Indonesia.
Is personality the reason for Prabowo’s popularity? Isn’t he a controversial former military officer?
Yes, he is. Prabowo has been accused of committing human rights abuses during his time as a special forces commander under the Suharto “New Order” dictatorship that lasted from 1967 to 1998; he was dismissed from the military but was never charged with any crimes. Prabowo was close to the former dictator and even (for a time) married to his daughter.
In the past, Prabowo has referred in broad terms to “reducing the cost of democracy” — seen by some as a euphemism for reversing the move to direct presidential elections in Indonesia or other steps in a more authoritarian direction. Prabowo’s most ardent critics fear he will return to the Suharto era with a “New Order 2.0,” but this seems unlikely and would trigger strong public pushback. The defense minister has long had a “strongman” persona that appeals to a segment of the population.
But he has taken steps to broaden his appeal, right?
Yes, he has deployed social media effectively to rebrand himself and broaden his appeal. The cat-loving, cuddly grandpa cartoons and avatar appearing on billboards and social media output are intended to moderate his previously stern and out-of-touch image. Meanwhile, social media clips of him dancing seek to dispel any concerns about his age and rumors surrounding his health.
And how significant is Jokowi’s support?
The popular president’s clear but unofficial support is probably the key factor in Prabowo’s surge in the polls. Jokowi defeated Prabowo in the presidential races of 2014 and 2019 and then made the former military officer defense minister in his second administration. Jokowi’s son, Gibran Rakabuming Raka, is Prabowo’s running mate in the current election.
Prabowo is now polling very close to the 50% support threshold needed to win the presidency in the first round of the election, but turnout will be a key watchpoint. He is popular with younger voters, who tend to turn out in smaller proportions. Anies and Ganjar trail far behind, locked in an intense battle for runner-up and a place in the potential second round. If there is a runoff, Prabowo will still be the clear favorite, regardless of whether his opponent is Ganjar or Anies.
Why is Jokowi so popular and what is his legacy?
Jokowi is unusually popular for a president who has been in power for nearly ten years. Much of this is down to his “man of the people” personality, despite concerns among his more pluralistic backers about his weakening support for democracy and good governance in recent years. He somehow retains an “outsider” appeal despite being in power for so long and in recent years joining the establishment tradition of dynasty building (as shown by the presence of his son on Prabowo’s electoral ticket).
Jokowi has failed to achieve his promised 7% economic growth rate, but Indonesia has outpaced most other emerging market countries. Jokowi has also led significant progress on infrastructure development — most notably the launch of the Jakarta-Bandung High Speed Train (though not without controversy), Jakarta subway, and new tolls roads, especially on Java island — and improving the business environment (though many challenges remain). Poverty and unemployment are decreasing as well, though youth jobless rates are concerning, and inequality remains high.
What challenges will the next president face?
The next president will inherit a relatively strong economy; the priority will be sustaining the positive momentum and further boosting growth while also addressing youth unemployment and inequality. Delivering on populist campaign promises could be a challenge, especially for Prabowo, who has offered more giveaways. Any weakening of democratic institutions — should it occur — would likely trigger social protests. Backward steps on reform or governance could weaken the country’s appeal for foreign investors and its growth trajectory. Meanwhile, balancing relations with the US and China will take careful handling, though the elections are unlikely to result in a shift away from Indonesia’s longstanding “non-aligned” foreign policy.
Edited by Jonathan House, senior editor at Eurasia Group.
Indonesia's Defence Minister and presidential candidate Prabowo Subianto during an election campaign rally ain Sidoarjo, East Java, Indonesia, on February 9, 2024.
The big election you haven’t heard about
It won’t be closely covered by Western media, but on Wednesday, the world’s fourth most populous country and third-largest democracy will stage a historic election. More than 200 million voters will elect a new president, vice president, and about 20,000 state and local officials.
This vote comes at a crossroad moment in the country’s quarter-century history as a democracy.
A little background. Indonesia’s democracy isn’t old enough for voters to take for granted. Its government remained a dictatorship from the time Suharto, a military man, used a purge of communists to seize power in 1965 until a financial crisis catalyzed 33 years of public frustration to force the strongman from power in 1998 and to usher in change a year later.
The next 15 years featured hotly contested elections, but only among candidates representing the country’s most powerful families, who manipulated Indonesia’s political system to keep power for themselves while keeping political outsiders outside.
That ended in 2014 with the election of Joko Widodo (known widely as Jokowi). It was Jokowi’s outsider status as a former furniture salesman who became the sincere, middle-class, can-do mayor of a small Javanese city, and then of Jakarta, the nation’s capital, that lifted him onto his country’s largest political stage.
In 2014, Jokowi easily defeated Prabowo Subianto, Suharto’s son-in-law and a former special forces commander with an ugly human rights record, to become president.
But once in power, Jokowi discovered the political clans of an older generation still held leverage, and the only reliable tool to advance much-needed reform was his own personal popularity bolstered by a few political insiders who helped him build a strong parliamentary majority.
In 2019, a newly confident Jokowi beat Subianto again, but this time the president agreed to make Subianto his defense minister, bringing his opposition party into alliance with his government and taking control of parliament.
His government made substantial progress in, for example, improving access to health care, education, and other public services for the poor, developing more affordable housing, and democratizing land policy. He has also helped keep the country’s economy steady and opened a project to build Indonesia a modern new capital city.
Jokowi, who failed in a controversial bid to strike down presidential term limits, now hopes to play political kingmaker. To accomplish this, he’s made a choice that critics say compromises his integrity by promoting the presidential candidacy of Subianto, his morally compromised former rival.
What comes next? Subianto is now trying his own version of the “embrace your former rivals” strategy by pledging to follow in Jokowi’s still-popular footsteps – and, for those who find that strategy too subtle, by making Jokowi’s son his vice-presidential running mate.
Anies Baswedan, Jokowi’s former speechwriter and then education and culture minister, has repeatedly antagonized his former boss and earned his political wrath.
There’s a third candidate, Ganjar Pranowo, a charismatic outsider in the Jokowi mold, and a member of Jokowi’s party, who now finds himself without the outgoing president’s support.
Recent polls give Prabowo nearly 50% of the vote with Baswedan and Ganjar at about 20% each. If no one wins a majority in Wednesday’s first round, a runoff will be held in June.
Indonesia's defence minister and presidential candidate, Prabowo Subianto, along with his running mate, Gibran Rakabuming Raka, who is the eldest son of Indonesian President Joko Widodo and Surakarta's Mayor, greet their supporters as they arrive at the election commission headquarters for registering themselves for next year's presidential election, in Jakarta, Indonesia, October 25, 2023
The race in Indonesia is on
Though Indonesia is the world’s fourth most populous country (pop. 276 million) and its largest majority Muslim state, it’s long been recognized more for its potential than its accomplishments. But as rivalries grow among the United States, China, and India, this archipelago nation stretching from the Indian Ocean to the Pacific is emerging as a more strategically important partner. It could also become one of the world’s 15 largest economies in the coming years.
Indonesia’s popular current president holds an approval rating of nearly 80% after nine years in power. Yet, Joko Widodo, widely known as Jokowi, is term-limited, and Indonesians will face elections next year to choose his successor. The first round of presidential voting will be held on Feb. 14, with a probable second-round runoff scheduled for June 26.
The deadline for registering presidential candidates for the election closed on Wednesday, and we now know the field. The bottom line: Next year’s election is very likely to produce political continuity.
Defense Minister and former Army General Prabowo Subianto is the favorite, in large part because he’s considered Jokowi’s anointed successor. (Prabowo’s vice presidential running mate is Jokowi’s son.) Prabowo’s strongest challenger, former Central Java Governor Ganjar Pranowo, is also considered close to Jokowi. The outsider candidate, former Jakarta Governor Anies Baswedan, is probably a long shot.
But Prabowo comes with baggage. As an army commander during the closing days of the three-decade Suharto dictatorship, which ended in 1998, he was accused of human rights abuses and banned for a period from entering the United States. He lost the 2014 and 2019 presidential elections to Jokowi. It appears, however, that the incumbent has calculated that Prabowo will allow him to retain political influence.
The greatest threat a Prabowo presidency appears to pose is to Indonesia’s economic policy. He’s viewed as a populist-nationalist, a leader more likely to govern Indonesia’s economy to sustain his popularity rather than to increase the country’s dynamism.
The campaign is now officially underway.
Persons transacting at the exchange office in Istanbul, Turkey
Hard Numbers: Turkey underwhelms investors, Kenya tackles hunger, EU jeopardizes journalists, Indonesians get a nice long weekend
15: Turkey’s central bank raised its key interest rate by 650 basis points to 15% on Thursday in a big bid to slow runaway inflation. But was it big enough? Markets aren't convinced. The Turkish Lira actually fell on the news, as markets had been hoping for a more decisive hike to as much as 40%. Although Erdogan promised during his recent presidential campaign to get tough on inflation, the mellower move suggests he’s still wedded to his wackier economic ideas after all.
400,000: Kenya is set to launch Africa’s largest school meals program, aiming to cook up 400,000 lunches daily for hundreds of primary schools. The program would not only take a bite out of child hunger in a country where more than a quarter of children suffer malnutrition, but it could also provide thousands of jobs in the kitchens.
300,000: An organization representing 300,000 European journalists says a new EU law could threaten their freedom. The proposed measure would permit governments to snoop on reporters suspected of having criminal sources – i.e., the most interesting kind! The confusing irony is that the law – titled the European Media Freedom Act – also seeks to protect journalists from politically motivated surveillance, a big issue in countries like Hungary and Poland where governments have cracked down on the media.
5: The majority of Indonesians will enjoy a special five-day weekend at the end of June, courtesy of President Joko Widodo. He ordered the one-off special holiday as a way to boost domestic travel and consumption, both of which are recovering sluggishly from the pandemic.