Thu, 25 Jun 2015

The urgent, as they say, is too often the enemy of the important. We are rightly concerned with a bevy of foreign issues, many of them genuine crises — terrorism in the Middle East and at home, China’s territorial assertiveness in the South China Sea, Barack Obama’s likely sellout to Iran in a weak nuclear deal.

But one crisis is starting to gather near to us, which we haven’t really noticed. That is the astonishingly rapid unravelling of the presidency of Joko Widodo in Indonesia.

The election of Jokowi, as he is widely known, was hailed internationally. Here was a modern Indonesian liberal from a new generation. He was famous for having a Chinese running mate as mayor of Solo and seemed to do a credible job in his short half term as governor of Jakarta. He was against corruption and a hero to civil society.

He won narrowly against the Suharto-era general Prabowo Subianto, and we all breathed a sigh of relief.

Alas, we sighed too early.

Jokowi’s presidency is already a desperate mess. The Indonesian economy is stagnating. First-quarter growth was down at 4.7 per cent. Many international agencies are predicting total growth this year of well under 5 per cent. The economy often grew at 6 per cent under Jokowi’s predecessor, Susilo Bambang Yudhoyono, and before that at 8 per cent under ­Suharto.

Anything less than 6 per cent and Indonesia cannot absorb the new entrants to its labour market each year. Many economists think it really needs 8 per cent to do that. Because Indonesia had been so stable under SBY and was growing relatively fast, the accepted narrative became Indonesia Rising.

These narrative stereotypes are always a year or so out of date. If economic growth stays under 5 per cent for a few more quarters, the new narrative will be Indonesia stagnant.

Jokowi’s economic nationalism has become protectionism and is seriously damaging economic growth. He preaches all kinds of food self-sufficiency but the main effect of this is to raise prices and that pushes millions of people back into poverty. Jokowi promised to revive the economy through action on bureaucratic reform, infrastructure and creating a maritime transport network. Despite a lot of money being allocated for infrastructure, almost nothing is happening on these fronts.

Jokowi cannot get much through parliament where he controls few numbers. His cabinet was foisted on him by Megawati Sukarnoputri, who leads the party Jokowi notionally represents, and other traditional powerbrokers. It is a disappointing cabinet. A reshuffle is said to be in the winds but the worst performers are the political party appointees and they will be very hard to shift.

Indonesia’s economy is hurt by falling commodity prices and if growth falls below 4.5 per cent for a prolonged period, Jokowi will be in desperate trouble.

But even the economy is not the worst of it. Jokowi has shown himself unequal to the task of political management. Almost no one of consequence owes him anything. His one political asset, his popularity, is waning.

Since the downfall of Suharto and the emergence of democracy in Indonesia two institutions have stood out and gained credibility. The first is the media, because it is so active in exposing corruption. And the second is the Anti-Corruption Commission, the KPK. It has brought stunning prosecutions based on brilliant wire-tap evidence. It has prosecuted powerful people and made powerful enemies. It has especially upset the parliament, the police and the political parties, all of which have been ravaged by it.

SBY had to make the normal compromises of government but he always protected the KPK. He did this out of conviction but also because of the KPK’s enormous public standing. Under Jokowi, the police, who are very close to Megawati, have virtually gone to war with the KPK. Senior KPK figures are in jail or facing charges, which many Indonesians believe to be spurious. There is legislation before the parliament to severely curtail the KPK’s powers. Jokowi, unlike SBY, cannot protect the KPK.

Jokowi, under Mega’s urgings, nominated as head of police a man under active KPK investigation for massive corruption. Because of public outrage his nomination was eventually withdrawn. But he was then appointed deputy head of the police without Jokowi even being told, and this figure now calls the shots in the police.

The civil society figures who backed Jokowi so strongly are now demoralised and paralysed and a number of them are in jail too. All this does not look promising for the future and could lead to all sorts of new instability. The army and the police have trad­itionally been at loggerheads. The police are now asserting themselves, with Mega’s backing. By some recent appointments, Jokowi seems to be leaning towards the army for political support. The prospect of army versus police infighting in the future is all too real.

Jokowi has become isolated. One part of his government solicits foreign investment but many parts of his government make ­foreign investment harder and harder.

Jokowi has almost no interest in foreign policy beyond pretty crude nationalist rhetoric. His Foreign Minister, Retno Marsudi, has no cut-through with him and is ineffective. She was a Mega appointment. Mega is famous for appointing two types of people — old, long established utter loyalists completely devoted to Mega herself, or very junior people who are so astonished by their appointment that they will be forever grateful to Mega and loyal as a consequence. Marsudi is in the second category.

A lot of the Jakarta elite already wonders whether Jokowi can survive as President beyond another six months. It is harder now to impeach a president and Jokowi’s enemies have to consider that if he goes he will be replaced by his Vice-President, Jusuf Kalla, who is a much stronger character.

Canberra’s troubles with the Jokowi administration reflect difficulties other regional powers are having engaging with Indonesia under Jokowi. A weak and failing Indonesian President is one of several nightmare scenarios our northern neighbour can offer.