Indonesia’s Joko Takes Center Stage

Indonesian President-elect Joko Widodo was inaugurated into office Monday morning in Jakarta after a hectic interregnum in which it appeared that his opponent in the July 9 national elections, Prabowo Subianto, might seek to steal the office from him.

The 53-year-old president, known universally as Jokowi, still faces heavy going from a political elite so immersed in the spoils system that major special interests are expected to oppose his reform efforts at every turn. It remains to be seen if he and his band of crusaders can turn around one of Asia’s most corrupt countries.

The 62-year-old Prabowo, a onetime Special Forces general and former son-in-law of the late strongman Suharto, was rumored to be cooking up an audacious brew of unsubstantiated charges against the new president, then pushing them through the House of Representatives to impeach Jokowi, to be followed by a move to eliminate direct presidential elections and the appointment of Prabowo as president.

The Prabowo forces, who nominally control 60 percent of the legislature, already pushed through a last-minute measure in the waning hours of the current session to eliminate direct local elections and make the positions appointive, which they were until direct polls were put in place during outgoing President Susilo Bambang Yudhoyono’s period in office. Yudhoyono, under huge pressure from outraged citizens, has sought to short-stop that move, using his presidential power to set aside the bill and demand a revote, which must happen within a year of his decree.

Jokowi himself, in what many thought was a show of uncharacteristic toughness, appears to have cracked the whip, derailing Prabowo’s machinations over the inauguration. He met with Prabowo himself and Prabowo’s unofficial Sancho Panza, industrialist Aburizal Bakrie, to lay down the law. The Bakrie forces, who have stiffed the government for decades on taxes, reportedly were told that stringent tax investigations might commence immediately after the inauguration.

Prabowo, who had refused to concede defeat after the election, surprisingly attended the inauguration, as did Bakrie. When Jokowi greeted Prabowo as a "friend" from the lectern during his brief inauguration remarks, the former general snapped to attention and saluted the new commander in chief. The move seemed to put Prabowo, at least for now, in his place.

The main streets of central Jakarta were closed to traffic and lined with crowds for the inauguration and in anticipation of a day-long "People's Festival" to celebrate the event. Such a seemingly spontaneous outpouring of public support was unprecedented to mark a presidential inauguration here and carried echoes of Jokowi's populist presidential campaign. The gathering was also a show of force encouraged by Jokowi's supporters to forestall any attempt by Prabowo or his allies to deny their man his office.

Behind the scenes in recent weeks the new sheriff has been talking tough to his opponents. "They have been told that their tax and corruption problems could get much worse if they don’t get right with the Lord,” said an expatriate political analyst. “Basically, the message is ''We are in power, we know what you have done.’"

Although nothing is certain in Indonesian politics, the coalition that supported Prabowo and gave him a big majority in the legislature appears to be fraying, with two minor parties – the United Development Party, or PPP, an umbrella Islamic party, and the National Mandate Party, or PAN, reportedly splitting away from the coalition. Yudhoyono’s Democrats, who originated the bill to eliminate direct elections, are an unknown force, as is Golkar, headed by Bakrie although Jusuf Kalla, Jokowi’s elected vice president, also hails from Golkar. It is believed Golkar may be neutralized.

Prabowo, at least publicly, has pulled in his horns. He met with Jokowi on Friday for the first time to throw his tacit support to the new president. The two appeared together at a press conference in which they smiled and embraced each other.

“I conveyed to the party that I lead, my friends and supporters, to back Jokowi and his government,” he said. However he added: “If there’s some things which are not for the benefit of our nation and people, we will not hesitate to criticize.” It is highly unlikely, however, that he intends to give up completely. Political analysts estimate his 10-year campaign to claim the presidency cost as much as US$400 million and he is unable to accept the fact that he lost to a former furniture salesman.

As his first order of business, Jokowi is expected to cut Indonesia’s fuel and gas subsidy by about 50 percent The subsidy is costing the exchequer US$23 billion annually and amounts to 17 percent of the fiscal budget. It is bound to be a hugely unpopular move that the administration wants to get out of the way as soon as possible, since it raises the price of gasoline by 46 percent, and diesel by 55 percent. The cuts are expected to save the government US$13 billion in 2015. Jokowi had asked Yudhoyono to make part of the cut before he left office to save him some of his hard-won political capital, but Yudhoyono refused to do so, earning him considerable anger from Jokowi’s incoming administration.

The president-elect is expected to counter the expected political fallout by creating the same kind of “smart card” program for free health care that he put in place as governor of Jakarta, and to provide financial support for basic education for tens of millions of poor. In an interview with the New York Times, he said the first cards would be mailed by Nov. 1, the same date the fuel subsidy cuts are to go into effect.

Regarded as perhaps the most corruption-free outsider in Southeast Asian politics, Jokowi came from nowhere, first as mayor of the Java city of Solo and then as Jakarta governor, where he proved to be an uncommonly decisive public figure, forcing civil servants to come to work on time, overseeing cleaning of the streets, getting rapid transit moving and cleaning up some of the city’s foul waterways.

But immediately after his election, it became clear that he would have to make compromises, for example being forced to take onto his transition team at least two officials expected to play an influential role. They are AR Hendropriyono, appointed as an adviser, and Sutiyoso, a possible candidate for coordinating minister for political, legal and security affairs. Both hail from the Suharto era and were involved in human rights violations. He has faced pressure from within his own Indonesian Democratic Party of Struggle, or PDI-P, headed by Megawati Sukarnoputri, and officials who both want political patronage and do not want anything to do with the cleanup of corruption although he has insisted on refusing to horse-trade for cabinet positions, a longstanding Indonesian fact of life.

Jokowi is expected to have as an ally the fearsome Corruption Eradication Commission, which has jailed about 100 corrupt public officials since its inception and has in particular nailed some of Yudhoyono’s most trusted lieutenants, former party chairman Anas Urbaningrum and cabinet minister Andi Malarangeng. Numerous others are awaiting their time in the dock.

The economy faces cyclical headwinds although the administration’s moves to cut the fuel subsidy are expected to result in a significant bounce for the rupiah, which has been lackluster for months. While inflation is easing and forex reserves are beginning to turn around, economic activity has been slowing since 2011, moderating to 5.1 percent GDP annually as consumption spending has flagged.

Jokowi also faces troubles with growing economic nationalism, with several measures put in place by Yudhoyono’s economics czar, Hatta Rajasa, to discourage foreign investment in an attempt to foster local ownership. A long-standing ban on the export of raw minerals to force exporters to build domestic smelting plants, which finally went into effect at the beginning of this year, caused chaos in China when raw materials for auto production and steel were cut off. Although he has publicly extended an olive branch to the multinationals, it remains to be seen how far he will go. He is regarded in the final analysis as somewhat of an economic nationalist himself.