Indeed, what is the future of Indonesia under Prabowo Subianto and Jokowi Jr, especially as Prabowo's leanings are more toward "nationalism" and a pushback against "democracy"? Just what kind of nationalism will it be? Answer that question and you may just get a whiff of a hint on whether international capital will come knocking on Prabowo's door.
There has been quite a bit of foreign investment under Jokowi but nowhere near where Indonesia needs to rock back from the possibility of Prabowo practicing economic protection or economic nationalism of key sectors, such as mining. Reminds me of China under Xi Jinping, who has continued to wrap in cottonwool what he calls China's strategic economic sectors, dominated by state-owned companies, much like Malaysia's government-linked corporations -- ones these so-called governments are afraid to open up to global market competition.
Prabowo will probably preside over an economy that remains by and large closeted to produce for the domestic market rather than international markets, thus incapable of moving up or unable to move up the changing product cycles hut remain stagnant sectors if new investments aren't forthcoming from international capital. As we've seen in Malaysia -- as distinct from its neighbor Singapore -- state capital injection into these sectors, which are for the most part import substitution industries of old -- cannot modernize because of heavy state protection. Meanwhile they will continue to breed and nurture renter-seekers or rentier capitalists.
The boost to the rupiah and the Jakarta stock market is merely kneejerk euphoria at the election result. Give it a few weeks and it'll go back to what it has been -- not one that sees a beeline of institutional investors making real investments but institutional investors making short-term portfolio capital gains. There still remains the problem of sticky inflation and high interest rate at 6% -- not exactly one that is likely to lick high inflation and provide a kickstart to the economy in real terms. If anything, inflation, I think, will stay high to make a sufficient fraction of the Indonesian population question not just Jokowi's policies but what Prabowo will bring to the table to ease their pain. Probably very little, my guess.
As for Probowo "drubbing" his election contenders, please, let's be real: they never stood a chance when survey after survey pointed to a Probowo victory by a huge margin. On that note, I am disappointed with Jokowi, who over his term as president, has blow more hot air than a steel plant at full capacity. The idea of building a new capital in Nusantara is a joke -- another area in which Indonesia is headed that it shouldn't if lessons from neighbors aren't learnt -- megaprojects, which tend to breed great degrees of inefficiencies and, just as worrisome, more corruption (as if the level of corruption in Indonesia isn't worrying already).
In fact there has been, under Jokowi, little structural and institutional reforms. Many of the structures and institutions are carry-overs from the corrupt Soeharto era, with amny of his cronies -- and new ones, all renkers -- still going gangbusters in the economy.
Indeed, what is the future of Indonesia under Prabowo Subianto and Jokowi Jr, especially as Prabowo's leanings are more toward "nationalism" and a pushback against "democracy"? Just what kind of nationalism will it be? Answer that question and you may just get a whiff of a hint on whether international capital will come knocking on Prabowo's door.
There has been quite a bit of foreign investment under Jokowi but nowhere near where Indonesia needs to rock back from the possibility of Prabowo practicing economic protection or economic nationalism of key sectors, such as mining. Reminds me of China under Xi Jinping, who has continued to wrap in cottonwool what he calls China's strategic economic sectors, dominated by state-owned companies, much like Malaysia's government-linked corporations -- ones these so-called governments are afraid to open up to global market competition.
Prabowo will probably preside over an economy that remains by and large closeted to produce for the domestic market rather than international markets, thus incapable of moving up or unable to move up the changing product cycles hut remain stagnant sectors if new investments aren't forthcoming from international capital. As we've seen in Malaysia -- as distinct from its neighbor Singapore -- state capital injection into these sectors, which are for the most part import substitution industries of old -- cannot modernize because of heavy state protection. Meanwhile they will continue to breed and nurture renter-seekers or rentier capitalists.
The boost to the rupiah and the Jakarta stock market is merely kneejerk euphoria at the election result. Give it a few weeks and it'll go back to what it has been -- not one that sees a beeline of institutional investors making real investments but institutional investors making short-term portfolio capital gains. There still remains the problem of sticky inflation and high interest rate at 6% -- not exactly one that is likely to lick high inflation and provide a kickstart to the economy in real terms. If anything, inflation, I think, will stay high to make a sufficient fraction of the Indonesian population question not just Jokowi's policies but what Prabowo will bring to the table to ease their pain. Probably very little, my guess.
As for Probowo "drubbing" his election contenders, please, let's be real: they never stood a chance when survey after survey pointed to a Probowo victory by a huge margin. On that note, I am disappointed with Jokowi, who over his term as president, has blow more hot air than a steel plant at full capacity. The idea of building a new capital in Nusantara is a joke -- another area in which Indonesia is headed that it shouldn't if lessons from neighbors aren't learnt -- megaprojects, which tend to breed great degrees of inefficiencies and, just as worrisome, more corruption (as if the level of corruption in Indonesia isn't worrying already).
In fact there has been, under Jokowi, little structural and institutional reforms. Many of the structures and institutions are carry-overs from the corrupt Soeharto era, with amny of his cronies -- and new ones, all renkers -- still going gangbusters in the economy.