A Rather Difficult Situation.
The Indonesian Economy and the Upcoming General Elections
Lennart Ezra for LC Society (edited by Rizky Bayuputra)
LE CITOYEN–With internal political tension heightening in Indonesia due to the upcoming 2019 president election, the citizens have two rather big-wigged muppets to choose from: Ir. H. Joko Widodo (Jokowi) and Prabowo Subianto (Prabowo). The same candidates have fought in the 2014 Election resulting in the former’s presidency.
The easiest way of seeing things is through their candidates for vice president. Ma’Ruf Amin (Amin), who’s also the chairman of Majelis Ulama Indonesia (MUI) has been selected to be the vice president candidate as Jokowi declared per 9 August. On the other side, Sandiaga Salahuddin Uno (Sandiaga), who’s also the former of Vice Governor in Jakarta, has been chosen as the vice president candidate as Prabowo declared. Both of these candidates has it’s own power to strive for the battleround in the upcoming election.
According to the history of their competition, there are plenty of media/press agencies had published exposé’s regarding the showdown between the two. For the common reader, however, we can see it from more a simpleton point of view–like the candidates for the vice presidency. Ma’Ruf Amin (Amin), who’s also the chairman of Majelis Ulama Indonesia (MUI) has been chosen to be Jokowi’s VP as declared on 9 August this year. On the other side, Sandiaga Salahuddin Uno (Sandi), incumbent Lieutenant-Governor of Jakarta Capital District, has been chosen as the vice president candidate during Prabowo’s declaration. Both of these candidate have their qualities (and with virtue, surely comes vice), which would be used to, and perhaps against, their advantage in the most daring and dangerous–and humorous, to some extent–competition in the country in 2019.
Candidates One: Jokowi-Amin
Candidates One would be the pairing of Jokowi–Amin. Here, Jokowi is trying to bring massive amount of support by choosing Amin as his partner in this election, where his position as chairman of MUI might garner the religious Muslim vote (in contrast to the secular Muslim vote), a demographic that Jokowi is not known to be very popular in. The coalition between Jokowi and Amin involved nine political parties in it such as PDIP, PPP, PKB, Golkar, Nasdem, PSI, Perindo, PKPI, and Hanura.
Economically, the election will certainly have some impact on the economy of Indonesia due to political statements that will appear later on, which would hamper not only the value of the Rupiah towards US Dollars, but also effect the amount of capital investors are pouring into the country.
A quick overveiw of Jokowi’s Economic Policies
As we have seen, Jokowi has driven the national economic growth within the number of 5.27% by the second quarter of 2018 according to the data of Statistic Center Bureau of Indonesia.[1] However, this does not make Jokowi a saviour from heaven for the Indonesian economy: currency rates between Rupiah and United States Dollars have reached unprecedented lows post-1998 Reformation. This decline is assumed as an impact of the massive expenses undertook in 2018 for national projects alongside the strengthening economy of United States. The bright side of it, is that Jokowi managed to initiate plenty of infrastructure projects all over the country and is considered to raise the welfare level of marginal citizens, especially in basic infrastructure such as roads and electricity. Jokowi prioritises the infrastructure sector in order to improve national competitiveness and equitable development outcomes, reducing disparity between regions.[2]
Candidates Two: Prabowo-Sandi
On the other hand, Candidates Two, Prabowo and Sandiaga are attempting to bring an ‘economic reformation’ in Indonesia as they criticise the current state-of-affairs. Looking from the background, the mightiest weapon that Prabowo has is his very own VP. Why so? As we can see, Sandi is in every way an educated gentleman, earning his Bachelor of Bussiness Administration (BBA) from Wichita State University and an MBA from George Washington University; paired with shrewd business-senses, he has carved himself into the financial elite in Indonesia via mega-ventures such as Saratoga Investama Tbk (a public company, investment bank). Surely, he has a lot of stake in major Indonesian companies, one of them being Mandala Airlines. Perceiving his expertise in economics, Sandiaga has promising criteria to bring a vision of economic reformation.
Like all political contests, campaign promises would always be the same: infrastructure, education, and maritime policy would be the middle ground for these two opposing candidates… So what makes the difference? Perhaps it would be as simple as the question of growth versus development, whereas the former has been a predominant pitchfork of national economic policy since the time of the previous president (Susilo Bambang Yudhoyono) to attract foreign capital, and whether foreign capital as priority in comparison to the independency of local kingpins, remain a question to be answered.
How will the elections effect the Economy? Let’s see what the Experts have to say
Seeing the arsenal being brought forth for the upcoming General Elections, it has a really big chance that this will affect the Indonesian economy deeply. So, what’s the impact?
Misbah Hasan as Deputy of the National Secretariat of the Indonesian Forum for Budget Transparency stated that in 2019, the Indonesian economy will be easily influenced by the dynamic of the politics. Bureaucratic affairs will also be interrupted, seeing that Jokowi is declaring himself as presidential candidate for the second time in a row.[3]
On this opinion, we would like to suggest that surely, the amount of visits to megaprojects around the archipelago would lower–though, citing Mr. Hasan’s opinion, we shouldn’t be worried of the continuation of such programs, as the impresence of the president should not hinder these projects in any major way.
Dr. Perry Warjiyo the governor of Bank Indonesia (BI) has a different sight due to the political showdown between Jokowi and Prabowo. He stated that the most highlighted economic blur in regards to the election is from global economic growth. Seeing the U.S. Federal Reserve Bank, who rose the interest rate in America, the increase in such rates gave massive impact to the Rupiah value against the US Dollar. He assumed that national expenditure will increase substantially in response.[4] On the other hand, Perry also mentioned that the positive impact of the election is assumed to be the escalation of Indonesian’s consumption.
For a Better Indonesia?
Regardless of the election’s impact, now we’ll move to what the candidates have promise us (so far). What would happen if Jokowi wins the election? What would Prabowo do if he wins the election? Economist Bhima Yudhistira (Institute for Development of Economic and Finance, Indef), stated that the economic sector is the most challenging one for both candidates to figure out.[5] So, let’s break it down for each candidate.
As we can see, Jokowi’s track record of four years, on the economic sector, has been a real deal of fluctuation both on the micro and macro. He managed to conclude negotiations with Freeport McMoran to divest 51% of its share to Indonesian Government, represented by PT Indonesia Asahan Aluminium also known as PT Inalum.[6] Due to plenty of national affairs that include mega-events such as Asian Games 2018, Asian Para Games 2018, among others, national expenditure under Jokowi’s authority has increased drastically to 410 trillion rupiah just for infrastructure comparing to Year 2017 where national spending was 390,2 trillion rupiah.[7] By Jokowi’s track record, we can assume that he has made huge developments with many sectors such as infrastructure, employment, tourism, and import inside of it though there’s still many to overcome with.
On the other side, if Prabowo wins the election, he and Sandiaga has a vision to undergo economic reformation. This economic reformation refers to the welfare of the marginal citizens.[8] We must admit that the percentage of poverty in Indonesia under the Jokowi Administration is getting better[9] but Prabowo and Sandiaga promised a massive rise in jobs in the year 2019 if they win the election. This statement hooked plenty of media that at the time, Prabowo has a promising vision for a better Indonesia on the upcoming days. As he stated on his speech on September 22nd. The candidate’s vision is to be independent on the economic sector which means Indonesian Economic won’t have to depends on it’s debt to other nations like Jokowi did in the past few years.[10]
Conclusion
With the General Elections coming soon, it is wise for all Republican citizens to not only vote in the polls, but also have an informed decision on which candidate they would vote for. This has been a growing danger in recent years, with Indonesians being so easily swayed and convinced by even the slightest hints by both the press and social media broadcasts. It is the iron stock of democracy, for its citizens (of whom this country is to be decided by) to know what they are doing in such catalysts.
So, dearest readers, please do take the effort to confirm and re-affirm claims that are vague and absurd, and put rationale first before the heart, for Republics might be built by burning passion, but they are maintained by cold calculations!
[1] Nadia, Ambaranie. “Kuartal II 2018, Pertumbuhan Ekonomi 5,27 Persen” https://ekonomi.kompas.com/read/2018/08/06/125338926/kuartal-ii-2018-pertumbuhan-ekonomi-indonesia-527-persen Accessed October 14th
[2] Rizky, Maulandy. “Ini Deretan Infrastruktur Yang DIbangun Di Era Jokowi” https://www.liputan6.com/bisnis/read/3608553/ini-deretan-infrastruktur-yang-dibangun-di-era-jokowi Accesed October 14th
[3] Deny, Septian. “Ada Pilpres, Target Pertumbuhan Ekonomi di 2019 Sulit Tercapai” https://www.liputan6.com/bisnis/read/3622945/ada-pilpres-target-pertumbuhan-ekonomi-di-2019-sulit-tercapai Accessed on October 14th
[4] Sebayang, Rehia. “Ini Dampak Pemilu terhadap Pertumbuhan Ekonomi versi BI” https://www.cnbcindonesia.com/market/20180830150352-17-31012/ini-dampak-pemilu-terhadap-pertumbuhan-ekonomi-versi-bi Accessed on October 14th
[5] Nur, Mochamad. “Begini Tantangan Terbesar Sektor Ekonomi Capres-Cawapres Pilpres 2019” https://www.jawapos.com/ekonomi/finance/11/08/2018/begini-tantangan-terbesar-sektor-ekonomi-capres-cawapres-pilpres-2019 Accessed on October 14th
[6] Sulistiyono, Seno Tri. “Dana sudah di Inalum, Divestasi Saham Freeport Rampung Akhir September” http://www.tribunnews.com/bisnis/2018/09/04/dana-sudah-di-inalum-divestasi-saham-freeport-rampung-akhir-september Accessed on October 14th
[7] Prabowo, Dani. “Anggaran Infrastruktur 2018 Naik Jadi 410,4 Triliun” https://properti.kompas.com/read/2017/12/08/213705121/anggaran-infrastruktur-2018-naik-jadi-rp-4104-triliun Accessed on October 14th
[8] Praditya, Ilyas Istianur “Jokowi-Ma’ruf Amin Vs Prabowo-Sandi, Mana yang Paling Punya Kekuatan Ekonomi?” https://www.liputan6.com/bisnis/read/3615378/jokowi-maruf-amin-vs-prabowo-sandi-mana-yang-paling-punya-kekuatan-ekonomi Accessed on October 8th
[9] Bhayu, Akbar. “Infografik: Angka Kemiskinan Era Soeharto Hingga Jokowi” https://ekonomi.kompas.com/read/2018/08/02/112317326/infografik-angka-kemiskinan-era-soeharto-hingga-jokowi Accessed on October 14th
[10] Firdaus, Randy Ferdi. “Visi Misi Prabowo-Sandi menciptakan rakyat adil dan makmur” https://www.merdeka.com/politik/visi-misi-prabowo-sandi-menciptakan-rakyat-adil-dan-makmur.html Accessed on October 14th
