Overview of political and governance issues Kevin Evans Indonesia Director, Australia Indonesia Centre IABC/AIBC Conference November 2017, Surabaya
At the time of the Presidential elections Pro Jokowi-JK Cross bench Anti Jokowi-JK 37% of seats 0% of seats 63% of seats Supporters of losing team remain solid
By August 2015 Pro Jokowi-JK Cross bench Anti Jokowi-JK 53% of seats 11% of seats 36% of seats PAN under new leadership quit the Red and White Coalition and go for Indonesia is Great Coalition
In 2017 Pro Jokowi-JK Cross bench Anti Jokowi-JK 69% of seats 11% of seats 20% of seats The President has a comfortable fat coalition
Presidential System: with friends like these! Pro Jokowi-JK Cross bench Anti Jokowi-JK 69% of seats 11% of seats 20% of seats The New Law-in- Lieu of Law on Mass Orgs saw PAN oppose and Demokrat support
Less corrupt More corrupt Indonesia is the red diamond. New global CPI methodology used As you see at the end of the 1990s Indonesia was at the bottom of the world. Progress was very patchy until 2004 when the KPK was established. Progress since has been steady. As the country goes forward there will be a need to reach beyond enforcement to make further progress on prevention (systems improvements) eg ease of doing business Source: Transparency International: Corruption Perception Index: Assorted findings 1998-2016
This chart shows how Indonesia compares with other countries in its near neighbourhood. Perceptions reports are useful as they can provide a guide to how people are seeing developments. However, perceptions are not always the same as reality. Source: Transparency International: Corruption Perception Index: Assorted findings 1998-2016
Ease of doing business The World Bank has established this measurement Progress is taking place bit it is still very low. No need for Australian complacency either Economy Yr 2010 Yr 2018 Change NZ 2 1 1 Singapore 1 2-1 Korea 10 4 6 Australia 11 14-3 Taiwan 22 15 7 Malaysia 21 24-3 Thailand 28 26 2 Japan 16 34-18 Vietnam 99 68 31 Indonesia 109 72 37 China 120 78 42 India 147 100 47 Philippines 126 113 13
A closer look at Indonesia Category of issue Indonesia Rank 2017 2018 Total Ease of Doing Business Rank 91 72 Getting Electricity 49 38 Resolving insolvency 76 38 Protecting minority investors 70 43 Getting Credit 62 55 Registering property 118 106 Deaking with construction permits 116 108 Trading across borders 108 112 Paying taxes 104 114 Starting a business 151 144 Enforcing contracts 166 145 (out of 190) Source: World Bank http://www.doingbusiness.org/rankings
Micro-reforms the President s core skill Clearly the President s focus on micro-reforms is spot-on after a generation of big visions Moving to include a focus on corruption prevention Dealing with complexities of doing business, recent tax development too Pushing through the spoilers to get infrastructure moving History may now be demanding more than improvements in microreforms
Macro challenges emerging Recent developments call for the President to be the ideologue-in-chief
Macro challenges emerging Recent developments call for the President to be the ideologue-in-chief The fight for the soul of Indonesia religious bullying in the private domain Moral panics The spectre of Indonesian nativism shadows of Malaysia? Dog whistles on equity and no slip of the tongue Re-energising Pancasila in a post-soeharto way Facing a resurgent China on many fronts Ahok was a lightning rod for all these issues Political masculism and the rise of national tough guy leaders In 2014 Indonesian rejected this leader but not the idea Economic nationalism alive and well
A closer look inside Indonesia City Overall average Starting a Business Dealing with Construction Permits Registering Property Yogyakarta, DI Yogyakarta 4 1 5 6 Palembang, South Sumatra 6 11 3 3 Balikpapan, East Kalimantan 7 7 1 12 Bandung, West Java 7 12 8 1 Banda Aceh, Aceh 7 5 4 12 Mataram, West Nusa Tenggara 9 10 12 4 Jambi, Jambi 9 18 2 7 Jakarta, DKI Jakarta 9 8 19 1 Pontianak, Wesrt Kalimantan 10 13 7 9 Semarang, Central Java 10 4 8 19 Gorontalo, Gorontalo 10 6 20 5 Palangka Raya, Central Kalimantan 11 2 14 16 Surakarta, Central Java 11 3 12 17 Medan, North Sumatra 11 19 6 7 Makassar, South Sulawesi 12 17 11 9 Denpasar, Bali 13 9 17 12 Surabaya, East Java 14 14 16 11 Batam, Riau Archipelago 15 15 10 20 Pekanbaru, Riau 16 16 15 18 Manado, North Sulawesi 18 20 18 15 Source: World Bank http://www.doingbusiness.org/rankings/indonesia