If administration can't keep a lid on inflation, president's impressive poll lead could easily be whittled away
Indonesian President Joko Widodo looks on during the ASEAN Canada 40th Anniversary Commemorative Summit in Manila on Nov.14. (Photo by Ezra Acayan/AFP)
Just six months ago, there were fears that President Joko Widodo could face an avalanche of black propaganda as he sought a second term, just as his former colleague in the Jakarta administration, Basuki Tjahaja Purnama, had been attacked over a statement deemed blasphemous.
A tide of Islamist outrage saw crowds of up to 200,000 turn out against Purnama, who lost his bid for re-election as governor of Jakarta and ended up serving a two-year jail term for blasphemy.
Widodo, however, has been cautious not to side too closely with his former deputy and close associate, and has gone out of his way to demonstrate that he is a good Muslim.
The man who started out as a furniture maker and then became mayor of the Central Java city of Solo vaulted into the Jakarta governorship in 2012 and just two years later into the presidency, after wowing the public with his common touch.
To the critics who said he was out of his depth — a view at first confirmed by wooden performances at international forums — he has transformed himself into a wily political operator, with some even saying he has the same touch for politics as a Central Javanese predecessor: the dictator Suharto.
Widodo has hounded the bureaucracy, demanding it cut red tape and boost efficiency, taking the country from 114th rank in the World Bank's Ease of Doing Business (EODB) index when he took office in 2014 to 72nd position last year. He has poured money into infrastructure projects and now, demonstrating his flexibility as a politician ahead of an election in April next year, is switching spending to programs to help the poor.
He has forged close relationships with the police and the armed forces and largely forgotten his promises on human rights. To establish his credentials as a good Muslim, he dons traditional sarong and peci — the flat black hat of the archipelago — and regularly turns up at religious celebrations. On a recent trip to Afghanistan he led prayers twice in just seven hours.
He has closely aligned himself with Nahdlatul Ulama, the traditional Muslim group which boasts at least 30 million members and is acknowledged as the primary representative of traditional Indonesian Islam. Together with Muhammadiyah, a more modernist group with another 20 million adherents, it recognizes the state ideology of Pancasila and the unitary state of the republic, which Widodo champions as a counter to more austere forms of Islam favored by hardliners.
He has retained his talent for identifying with the people, whether on his 'chopper' motorcycle on trips to the provinces or befriending a cute toddler during a visit to Papua's Asmat.
Opinion polls show Widodo leading his most likely contender for the 2019 presidential poll, controversial former general Prabowo Subianto, by as much as 20 points, with Subianto — who lost to Widodo in 2014 — reported to be wondering whether it's even worth mounting a challenge. Opposition political parties have until August to decide on a candidate, although few are apparent at the moment.
Widodo's opponent at the moment is not another politician, but the ill winds of economic fortune. The rising price of oil is a major problem for the government. Feted by international organizations after his election for scrapping the country's expensive subsidies of fuel and electricity, they are back again. Widodo knows that the inflationary spiral that would follow rises in basic utilities would sour the electorate for a second term.
The cost of the new subsidies is being left for state-owned energy giant Pertamina and power utility PLN to cover, under what the government likes to call a "public service obligation." Pertamina lost nearly Rp19 trillion ($1.4 billion) on fuel subsidies in just nine months last year. The government has even suggested that private fuel retailers like Shell and Total should accept government direction about any fuel price rise for what are supposed to be unsubsidized fuels.
Finance Minister Sri Mulyani Indrawati was on the defensive at a recent lunch hosted by the Jakarta Foreign Correspondents Club (JFCC), denying that the aim was to keep the electorate happy and insisting this wasn't a return to a subsidy regime. What mattered, she said, was maintaining consumer purchasing power so that the economy would keep growing.
"What I'm saying today, this is not a setback. This is just to show that the government is really concerned and cares because these are commodities that are important for households," she said. "We are not going back to what you call the practice of subsidizing everything or in this case, curtailing market mechanisms."
More recently, Indonesia's stock market has gone into reverse and the rupiah currency has lost ground as foreign investors have pulled their cash out in favor of U.S. Treasuries, creating new headaches for the government.
Worst of all, questions are being asked about the number of Chinese workers in the country, amid accusations that Widodo would be happy to sell the country to the East Asian giant. With relations with the communist giant a traditional source of sensitivity, the government is on the back foot over accusations that unskilled Chinese laborers are flooding into the country.
Presidential chief of staff and retired former armed forces commander Moeldoko initially dismissed the charges as disinformation, but on April 27 the Ombudsman came out with the results of its own study which found that many unskilled Chinese workers were active at a number of centers across the country.
Ombudsman commissioner Laode Ida told reporters that several major infrastructure projects being carried out in partnership with Chinese firms not only employed Chinese experts but were employing them as drivers of heavy vehicles and in other tasks that Indonesians could easily handle.
The report cited the example of a project in Morowali regency, Central Sulawesi, where around 200 foreigners were employed as drivers and claimed they were being paid a third more than locals in similar semi-skilled jobs.
An excess of Chinese workers makes a potent weapon for any electoral opponent, and if the Widodo administration can't keep the lid on inflation due to the rapidly rising cost of oil, the incumbent's impressive lead in the polls could easily be whittled away over the coming year.
Keith Loveard is the senior analyst and editor for the Jakarta-based risk consultants Concord Consulting. He is a regular contributor to ucanews.com.
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