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Thursday, September 26, 2013

Jokowi a wild card for Indonesia

Jakarta's governor Joko Widodo holding a maroon bass guitar 
given to him by Robert Trujillo of US band Metallica.
 Picture: AFP Source: AFP

IF Jakarta's reformist governor Joko "Jokowi" Widodo emerges next year as Indonesia's new president it will not necessarily weaken the protectionist push in Indonesia, says Jakarta-based economist Moekti Soejachmoen.
Economic nationalism in mining and banking, for example, has troubled investors at a time when Indonesia faces political uncertainty and economic challenges, such as rising inflation, pressure on the currency, and deterioriation in the balance of payments.
At a Lowy Institute briefing in Sydney yesterday, Dr Soejachmoen pointed out that Jokowi, the most popular albeit undeclared candidate for next year's poll, comes from a political party background that supports economic self-sufficiency and support for small traders.
"So, how can he adopt a less nationalistic (economic) policy?," she said.
Dr Soejachmoen, who took her PhD at the Australian National University, which co-hosted yesterday's forum, said the drive for self-sufficiency imposed costs.
Lowy scholar Dave McRae said the possibility of Jokowi running for president had lifted once gloomy attitudes about next year's elections. A Suharto-era soldier and businessman Prabowo, accused of human rights abuses, had been shaping as a strong contender.
But Dr McRae said it was not certain that Jokowi would emerge as a candidate to replace the incumbent Susilo Bambang Yudhoyono.
And if he were elected Jokowi, still an unknown quantity when it came to national policy, might disappoint Indonesians who had projected on to him so much hope for change and reform, Dr McRae said.
Meanwhile, Dr Soejachmoen said Indonesia's recent economic challenges had not led to serious reform because conditions were not bad enough to galvanise action and the political class was too busy gearing up for next year's elections.
Senior federal Treasury official Jason Allford told the Lowy forum these challenges were taking place "against the background of a pretty solid economy". However, long-term reforms were needed to underpin growth and lift incomes.
Asked about the view of Indonesia's peak business lobby, Kadin, that most Australian business had ignored the opportunities in Indonesia, Mr Allford said he was no expert but our level of investment there did seem "quite low".
"I would have thought that when you have a country (such as Indonesia) on your doorstep that is growing six or seven per cent per annum there should be a lot of business opportunities," he said.
"A quick look at the numbers" suggested Australia was not doing justice to these.


 
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