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Indonesia's New President Faces Obstructionist Opposition To Economic Reform

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President elect Joko Widodo is a breath of fresh air in Indonesian politics. When inaugurated on October 20, Jokowi, as Widodo is nationally known, will be Indonesia’s first freely chosen leader drawn from outside the power brokers that rose to prominence during the 40 year rule of military strongman Suharto.

As mayor of Solo and then governor of capital city Jakarta, Jokowi was known for blusukan, unannounced visits to markets and other public places to get outside the bubble, hear the unfiltered concerns of constituents and respond to them. “He’s the first leader to get his hands dirty,” Al Jazeera Indonesia correspondent Step Vaessen says, and she’s not talking about looting the treasury or human rights violations more common in Indonesian political annals.

Jokowi’s performance at the local level created a public groundswell of public support that led him to his nomination for president. “What’s remarkable about the last election was the involvement of ordinary people in shaping the future of the nation, despite political corruption,” award winning journalist Goenawan Mohamad said. “Food stall owners, tukang becak [bicycle taxi drivers] formed networks to support Jokowi. It was beautiful. And like many beautiful things, it didn’t last.”

Mohamad and other sharp observers of the world’s third largest democracy and Southeast Asia’s largest economy gave their views on Indonesia at this month’s Ubud Writers and Readers Festival in Bali, Indonesia’s renowned resort island.

The qualities that make Jokowi popular at the grassroots make him despised among Indonesia’s entrenched elite. The Red and White Coalition of establishment parties that supported losing presidential candidate Prabowo Subianto, a former general with a checkered human fights record and a billionaire brother, threaten to derail Jokowi’s agenda. “It will become a political dogfight,” top Greenpeace campaigner for preserving Indonesia’s forests Bustar Maitar said. “It doesn’t reflect the people’s aspirations at the national level.

“If you’re from the US, it sounds very familiar: a popular reformer president facing obstructionist legislators,” Elizabeth Pisani, author of Indonesia, Etc, said. “The old crocodiles in Jakarta won’t lie down and die.”

Since the election, Jokowi’s opponents in the national legislature have changed the rules to keep his party from choosing the House of Representatives’ speaker. They also repealed the local election law that paved the path of power for Jokowi outside the grip of local power brokers and, more importantly, allow residents to directly elect their leaders in more than 500 local jurisdictions of this highly decentralized archipelago. “It’s the world’s greatest laboratory for democracy,” Pisani said. “The system has delivered a handful of truly transformational figures.”

The decision has evoked a sense of shock and disbelief across Indonesia. “Because people’s lives are impacted at the district level, there’s a complete disconnect with politics at the national level,” Pisani said. “Everyone knows who their bupati [district leader] is, no one know who their DPR [House] representative is.”

The reason given for the change is that direct elections promote what’s known as “money politics” – bribery and graft – that forces district heads to spend money to get elected then use the state budget to help their benefactors and themselves. “Directly elected district heads give budget money to supporters to build roads, but the roads get built,” Pisani, a doctor of epidemiology as well as a journalist whose work within the Indonesian bureaucracy on AIDS is chronicled in her book, The Wisdom of Whores, said. “But the biggest expense is the ‘dowry’ paid to the political party” to secure a place on the ballot. An Indonesian friend tells of a candidate’s aide carrying a bag with $3 million dollars in cash to pay party officials for a nomination.

Scrapping district elections law will slow down local economic growth. “Local investors have confidence. You’re seeing development in places where there was none before,” Vaessen, who has covered the country for 17 years, said. Without local elections as a check on party oligarchs, she expects a return of the “old system of guys doing business with each other and wealth in the hands of a few people.”

Economic impact of the deadlock is likely to be more pronounced at the national level. Markets cheered the election of Jokowi and running mate Jusuf Kalla, both businessmen before they entered politics. Their platform includes plans to cut fuel subsidies that cost the country $20 billion a year, nearly 20% of the national budget, and invest heavily in infrastructure to better connect this archipelago that stretches the distance from London to Tehran. Kalla hails from Makassar, largest city in eastern Indonesia, and is expected to spearhead efforts to diversify the economy away from the main island of Java, which accounted for 58.7% of GDP in the first half of this year.

But now markets and Indonesia’s currency, the rupiah, have fallen in expectation of a protracted political impasse the economy can ill afford. Economic growth has tumbled from 6.5% in 2011 to 5.17% in the first half of this year. “The economy needs massive structural reform,” University of Wollongong Indonesia expert Jacqui Baker said, not deadlock. “Markets were hoping for a PDI -P [Jokowi’s party] dominated parliament and presidency. What we’ve got is not what the stock market and business wanted.”

Baker also warned that the opposition is pushing a protectionist agenda that could sideline foreign companies and investors. “During the campaign, Jokowi seemed willing to play that game.”

One thing not to worry about is the rise of radical Islam in the country with the world’s most Muslims, even though Islamic parties have mainly joined the opposition. “Islamic parties aligned with Prabowo because of the dowry,” Azyumardi Azra, director of the graduate school at the State Islamic University in Jakarta, said.

According to the latest census, Muslims account for 207 million out of a total population of 238 million, “Muslims are the largest voting bloc but Islamic parties are not important,” Azra, who's written extensively on Indonesian Islam, said. “Islam is not part of identity politics in Indonesia. Muslims have self-confidence due to demography.”

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