Eight years ago, on exactly October 20th, 2014, one of the most ambitious men in Indonesia would rise to the national stage and spark revolutionary changes to the entire archipelago country, which would be referred to as ‘Indonesia’s Jokowi Economy’. This is referenced after Joko Widodo, the man who became the country’s most famous president ever.
Sometimes known as Jokowi, he was a politician hailing from Jakarta, the country’s capital city, yet his ambition wasn’t just in his homeland, but rather all across the world. Global leaders recognize him for taking steps that no other Indonesian leader did. He was consistently awarded throughout his life, before and after he became president, for his political approach. At one point in 2020, Sheik Muhammed Bin Zayed even renamed a street in Abu Dhabi, United Arab Emirates after him, which goes to show how widely popular his name has become throughout the world.
So, how did Joko Widodo become so popular and what led him to become a national phenomenon? Well, one of Jokowi’s most renowned accomplishments is his economic agenda.
The Widodo Economic, as it’s more commonly known, has been declaring large and ambitious plans for the entire country, they’re so huge that people even doubted whether or not they would happen, yet they did. Jokowi, at one point, set a huge goal for Indonesia that by 2045, it will be the fourth largest economy in the entire world. To understand just how well this entire Widodo Economic is, let us go back to the very day he was sworn into office.
When Jokowi stepped into office, on his first day of inauguration, he sought to reform many of Indonesia’s various industries, in his first 100 days, he and his administration hit a historic milestone after reforming fuel subsidies, social assistance to the poor, streamlined investment licensing, and achieved virtually no new restrictive regulations on foreign trade.
These impactful government policies led Indonesia’s economy to stride into new territories. But it also helped Jokowi’s own popularity to skyrocket, since his consistent agendas were initiatives that no previous administration had done. The Jokowi administration was also applauded as he pushed for the inclusiveness of women in the rankings. One of the most important aspects of this was a reshuffle of the entire cabinet and ministries, where he removed some people and added new ones.
The Jokowi administration also inaugurated two new ministries by merging former ones, namely the Ministry of Public Works and Housing and the Ministry of Environment and Forestry. The reason why government changes are so important is they help a country remove unproductive offices. If a country were to face a challenge that can’t be fixed, it only means that the challenge is either too large or the ones working on it are not doing it right. Therefore, consistent government reshuffling is necessary.
Going back to Jokowi, the major part of his economic reform in his first term was that he announced a concept known as the “ Indonesiaentries”, a concept that aimed to promote equitable development across the country. This simply means that Jokowi wanted to remove the idea that Indonesia’s economy is solely pointing towards the islands of Java. The Java-centric model, after all, meant that all the investments, government funding, and foreign establishments would only land on that island and would not be experienced anywhere else. But the changes made by Jokowi has opened up many opportunities for the rest of Indonesia’s society.
It introduced the new capital city of Indonesia, removing the former one which was known as Jakarta. His infrastructure drive was also sought after by the citizens; it was loved and applauded as it finally addressed the need for change in the country. His biggest agenda was when he announced his five-year infrastructure plan that cost over 150 billion USD. Which included his entire 327 billion-dollar pipeline of projects. So far, we have seen vast amounts of this entire infrastructure completed. Some have been constructed and some are still under construction. The biggest known projects around the country were related to railways, specifically, the high-speed railway that is known as ‘Jakarta to Bandung High-Speed Railway’.
The economic growth of Indonesia on a year-to-year basis from 2014 to 2019, has seen an average of about four to six percent every year, and what arguably resulted in Jokowi’s first tenure as president, saw this consistent economic growth, reduced inequality, and infrastructure reforms. But that was the first term of Jokowi, as five years later, his next terms would arrive.
On his re-election day, he again won the hearts of Indonesians. Possibly due to his very unique approach to managing the Indonesian economy. From here on out, however, new challenges would appear. The Covid-19 pandemic would start months after his tenure began, and a few years later the world would see huge increases in inflation rates, shortages of everything, and an inconsistent commodity market, which resulted in many basic goods prices skyrocketing.
So far, however, what he has done in his second tenure has been a continuation of what he did in his first. He had pledged more infrastructure investments and aimed to make Indonesia an economic powerhouse by 2045. Amongst the most significant measurement that we can attribute to the Jokowi administration so far, is his dedication to the entire manufacturing landscape of Indonesia. Where one of the key barriers to Indonesia’s manufacturing capabilities was human capital development.
The labour workforce of the country is lagging when compared to its neighbors, however, Jokowi had signaled that this would change. The reform needed to become the manufacturing hub of Southeast Asia was implementing the right education for the right people. Hence, the first step is to become established and the second step of his manufacturing plan is the overall promotion of foreign investments. In the last few years, alone, Indonesia has received tens of billions of dollars worth of investment toward manufacturing. Much of these investments were directed toward the country’s abundance of nickel.
Nickel has become a very crucial component in driving the entire electric vehicle sector since nickel is important in the creation of batteries. Furthermore when nickel-led investments were expected, due to the country’s natural abundance, what really set Jokowi’s administration above all others was when he declared a ban on raw nickel exports. This meant that if a foreign vehicle manufacturer wanted to buy nickel, they would need to open up a factory in Indonesia and build it out there, rather than import it at a low-value cost. This aggressive behavior in upholding Indonesia’s values was not limited to this government policy.
The other big factor was when they implemented the Indonesia Investment Authority in 2021, which become the country’s first-ever sovereign wealth fund. Its economic impact so far has been marvelous despite its minimal time in office.
His infrastructure agenda likewise had not been stopped, it had continued. His foreign policy which made the country closer to China has also spurred numerous agendas to be put in place. The belt and road initiative in Indonesia has been strong and progressing at a steady pace. In 2019 the China Gezhouba Group led a 1.6 billion USD, 1.200-megawatt project, known as the Data Dian Hydropower Station, followed by the construction of 30.000 affordable housing units in west Java province, and further hydropower known as the Kayang A, which cost 1.2 billion dollars.
Now of course, from here on out, many things could still happen to the entire Jokowi economy. However, from what we have seen so far, much of his policies are directed toward the long-term growth aspect of Indonesia and not toward short-term expectations led by a hunger for popularity.
After all when, when the government (Joko Widodo’s) implements strategies to improve manufacturing, the timespan needed to get there is much greater. It needs to cultivate an environment that favours education and it needs to seek untouched industries that it can compete with globally, such as its abundance in raw nickel materials and important infrastructure program.
Infrastructure programs are widely known, not for their short-term economic benefits, but for a longer-term investment. The upcoming high-speed railway of Jakarta and Bandung, for example, would cost billions of dollars straight out of the government’s pockets and place a huge debt burden on the entire country. But within the next 10 to 20, or even 30 years, the economic benefits of it will be extraordinarily huge. It will bring an unprecedented amount of productivity and trade, and more importantly, it will reduce the overall vehicle congestion that many of the cities of Indonesia face.
Finally, while we have thus so far mentioned his strong views on prosperity, we have yet to mention the things he had failed to do. This is probably the most important since an individual in any society must understand that the government makes mistakes and in many cases, they are not perfect. However, while they may not have it all, the most important thing to note is that their underlying agenda to uphold the entire society is utmost for the good.
Now one of the most perplexing situations surrounding Joko Widodo’s administration is democracy. According to many reports, what Joko Widodo has done is impacting independent journalism. When the administration revised the Corruption Eradication Commission in 2019, it sparked mass protests due to a detachment from democracy.
Furthermore, In the latest democratic leaning changes, according to the Alliance of Independent Journalists, 19 articles were identified in the draft Criminal Code of Indonesia that could criminalize the work of journalists. Some examples of these are the likes of a five-year sentence for insulting the president or the vice president, one and a half years for insulting the government, and several more.
Without free speech for criticism, journalists would not be able to deliver the right messages, messages that society needs to hear about, especially on the fallacies and mistakes of the government. Therefore raising the question to the government, “is saying the truth bad?”. Free speech, after all, is not only crucial for society to know and understand what is happening in their own country, but rather, it is crucial to know whether a government is performing properly and honestly. Of course, many controversies are going to indeed surround the government. These are just among the many examples there are.
Article source: Behind Asia – Indonesia’s Jokowi Economy, Explained