- On July 9 Indonesians will decide if the country will turn inward or continues to liberalize.
- Regardless of who wins the election, liberal states should make a bold bid for deeper ties with Jakarta.
- Given its size and potential, Indonesia is one of the handful of states that can help determine the future of Asia.
Indonesians on July 9 will vote in the third presidential election since the collapse of former President Suharto's regime in 1998. After a decade of rule by current President and former General Susilo Bambang Yudhoyono, Indonesians will choose between two very different candidates. Their choice may determine whether Indonesia turns inward or continues to liberalize at home and abroad.
The incumbent president is to be credited with bringing much-needed stability to Indonesia following the ouster of the authoritarian Suharto in 1998 and the contentious development of a democratic electoral system. Under Yudhoyono's stewardship, it has become a middle-income country, despite its massive size and diversity. He also raised Indonesia's international profile, successfully navigating the expansion of ties with the U.S., for example, while maintaining Jakarta's leading role in the Association of Southeast Asian Nations.
Yet the latter years of Yudhoyono's rule have been disappointing, in many respects. Economic growth clocked in at an estimated annual 5.8% in 2013, a five-year low, while employment has not kept pace with population growth -- a particularly important issue in a nation of 240 million people. Similarly, ambitious infrastructure modernization plans have failed to meet their goals, despite the urgent need for better roads, railways, ports and public services. Yudhoyono's government has also been accused of corruption, and he has been criticized for not suppressing radical Islamist groups more forcefully.
Indonesians now will choose between Joko Widowo, the populist-leaning former mayor of Jakarta known as "Jokowi," and former special forces General Prabowo Subianto. What once seemed like a certain victory for Jokowi has become a statistical dead heat, with some analysts now predicting a Prabowo win.
Other than promising economic growth and infrastructure modernization, the two rivals have very different views on where Indonesia's economy should go. Prabowo has called for nationalization of natural resources and protectionist measures to support Indonesian businesses. Jokowi, on the other hand, has stressed decentralization and economic reform, along with educational modernization, seeking to give localities a larger say in promoting growth. Surveys indicate that foreign businesses would look to sell assets if Prabowo is elected, but invest more under a Jokowi administration.
Disappointingly, neither has shown much support for free trade agreements such as the proposed Trans-Pacific Partnership. That may hurt Indonesia's economic influence in an Asia moving toward trade liberalization. Under Yudhoyono, economic nationalism has grown in Indonesia, and foreign businesses complain about the lack of opportunities for investment. Neither candidate generates much confidence that he would change this state of affairs.
One of Prabowo's most effective electoral strategies has been to question Jokowi's experience and ability. Yet Prabowo brings significant baggage in this realm, having been accused of human rights abuses domestically as well as in East Timor during his past career as a commander in Indonesia's special forces, known as Kopassus. Rumors that he plotted a coup against former leader B.J. Habibie, who succeeded Suharto, have further raised concerns about his commitment to democracy. The U.S. has placed travel restrictions on Prabowo, and the Obama administration would undoubtedly prefer a Jokowi presidency.
Regionally, there are concerns about Prabowo's views on China, stemming from comments he made about Indonesia's ethnic Chinese minority during the country's 1998 financial and political crisis. Moreover, during a recent presidential debate, Prabowo said that an "unnamed country," obviously referring to China, was the greatest threat to Indonesian territory in the South China Sea, a statement quickly repudiated by Indonesia's current foreign minister.
Jokowi has called for his country to take the lead in finding diplomatic solutions to the region's territorial disputes, or to sit out negotiations in cases where its role is irrelevant. The former approach risks creating new tensions with Beijing, while the latter could reduce Jakarta's influence in a region already worried about the perceived unwillingness of large players like the U.S. to take a firm line with China.
Regardless of who wins the election, liberal states should seize the opportunity to make a bold bid for deeper ties with Jakarta. Working together, for example, Washington, Canberra and Tokyo could propose a series of high-level meetings to discuss economic reform, civil rights, and security issues. Helping Indonesia's military to modernize -- something both candidates agree on -- could provide a new market for American and Japanese defense manufacturers, boost Jakarta's ability to patrol its thousands of islands, and eventually help the country play a larger role in regional stability cooperation.
The greatest need is to open Indonesia's economy to more foreign investment and competition, which would boost competitiveness and encourage entrepreneurship. This is a difficult policy to follow for a developing country in which tens of millions still live in poverty. There has already been major dislocation to domestic industry from the Asean free-trade agreement with China. Yet, in the long run, Indonesia's economy can only truly develop if it is engaged with the rest of world.
Given its size and potential, Indonesia remains the most important country in Southeast Asia as well as the world's third-largest democracy, and one of the handful of states that can help determine the future of Asia. Remaining firmly committed to democracy, promoting religious tolerance and fully embracing economic liberalization will almost certainly increase Indonesia's strength and boost Jakarta's influence in Asia. On July 9, Indonesians will send a signal whether Asia may turn away from greater liberalization or recommit to the path that already has brought so many benefits.