Indonesia’s reformist president

Reformist Joko Widodo won the Indonesian presidential election last week, defeating former Gen. Prabowo Subianto, a member of the country’s traditional power establishment. Joko’s victory is expected to help consolidate the democratization process that has continued since Suharto resigned as president in 1998 after holding office for 31 years. But he is likely to face tough resistance as he pushes forward with his reform agenda. Perseverance and the formation of a strong Cabinet with the ability to get things done will be key to his success.

A former furniture maker, Joko was born to a poor family in the city of Solo in central Java. Known as a clean politician, he fought for democratization and the eradication of corruption as mayor of Solo and governor of Jakarta. During the campaign, Joko said that corruption, greed and a tendency to make light of laws, which originated in the Suharto years, remain problems and in some cases have grown worse. In contrast, Prabowo, a son of an economist who served as a Cabinet minister under Suharto, studied in the United States as a military officer and was married to Suharto’s younger daughter. He was forced to resign from the military over his suspected involvement in the kidnapping of a pro-democracy activist.

Although Joko won 53.15 percent of the vote, he encountered into his first post-election difficulty when Prabowo filed a legal challenge with the Constitutional Court, alleging misconduct in the vote count. While the results are not likely to be overturned, the court won’t reach a conclusion until late August and Joko is expected to be sworn in on Oct. 20.

Joko’s presidency is not expected to be an easy one, with Prabowo’s camp controlling Parliament. He will become the leader of a country with a population of 250 million and an economy that has been growing about 6 percent annually in recent years. Rich in natural resources and accounting for about 40 percent of the total production among the members of the Association of Southeast Asian Nations, Indonesia is an important economic engine in Asia. Studies by the Japan Bank for International Cooperation have declared Indonesia the No. 1 country for setting up business operations in the medium term, ahead of India and China. Some 1,800 Japanese companies have established operations there.

About 12 percent of Indonesia’s population still live below the poverty line. While trying to develop domestic industries to help lift people out of poverty, Joko may be influenced by popular sentiment that ordinary people do not adequately share benefit from the profits from Indonesia’s rich natural resources and lean toward protectionism, including setting up barriers to foreign companies’ entry into domestic industries. In fact, he has already expressed support for continuing the current policy of banning the export of unrefined ore. Joko should realize that protectionist policies could make Indonesia less attractive as an investment destination and lead to economic stagnation.

Japanese businesses and politicians may have preferred Prabowo, with his strong establishment connections, but Japan must make serious efforts to develop relations with the new president. Japanese political and business interests will benefit in the long run from helping Joko achieve sustained economic growth, improve the lives of the poor and bring transparency to government, which will make Indonesia and ASEAN more prosperous and stable.