Jokowi and the New Developmentalism

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1 Bulletin of Indonesian Economic Studies ISSN: (Print) (Online) Journal homepage: Jokowi and the New Developmentalism Eve Warburton To cite this article: Eve Warburton (2016) Jokowi and the New Developmentalism, Bulletin of Indonesian Economic Studies, 52:3, , DOI: / To link to this article: Published online: 15 Feb Submit your article to this journal Article views: 6590 View related articles View Crossmark data Citing articles: 1 View citing articles Full Terms & Conditions of access and use can be found at Download by: [ ] Date: 27 November 2017, At: 01:23

2 Bulletin of Indonesian Economic Studies, Vol. 52, No. 3, 2016: Indonesian Politics in 2016 JOKOWI AND THE NEW DEVELOPMENTALISM Eve Warburton* The Australian National University Indonesia s president, Joko Widodo (Jokowi), made a remarkable political recovery in During his first year in office, Jokowi had been overwhelmed by a combative and divided parliament, disunity in cabinet, tensions with his own party, and declining approval ratings. In 2016, however, Jokowi expanded his ruling coalition and consolidated his power, and his approval rating rose to almost 70%. By mid-2016, the president had achieved stable government for the first time since winning office. Political stability gave us greater clarity on Jokowi s agenda and the kind of Indonesia he wants to shape. I suggest that in 2016 a Jokowi-styled new developmentalism began to emerge. Jokowi s administration focused narrowly on infrastructure and deregulation; other problems of government were subordinated to these developmentalist goals. There are uncanny echoes of the past in the new developmentalism, and its conservative and nationalist features reflect political trends that pre-date Jokowi s presidency. Indeed, Jokowi s developmental strategy is neither unique nor coherent; his decision-making is defined by ad hocery. Instead, I argue, deeper structural features of Indonesia s socio-political landscape are making their mark on the president and returning Indonesia to its developmentalist moorings. Keywords: politics, developmentalism, political parties, cabinet, presidency JEL classification: D72, D73, O20 INTRODUCTION In 2016, President Joko Widodo (Jokowi) made a remarkable political recovery. During his first year in office, from October 2014, he faced multiple crises: a series of political missteps, conflict within his cabinet, a disruptive opposition coalition in parliament, and troubled relations with his own party. These misfortunes left the president looking weak and out of his depth. His administration also appeared ill-equipped to deal with Indonesia s economic slowdown and rising inflation. By June 2015, Jokowi s public approval rating had sunk to just 41% (Indikator 2016), * I wish to thank Edward Aspinall for his invaluable guidance and feedback in preparing this article. Thanks also to reviewers at BIES, to Marcus Mietzner for comments on an earlier draft, and to Greg Fealy, Thomas Power, Liam Gammon, Burhanuddin Muhtadi, Colum Graham, Ahmad Muhajir, Danang Widoyoko, and Thushara Dibley for their feedback on the presentation of this article at the Indonesia Update in September ISSN print/issn online/16/ ANU Indonesia Project

3 298 Eve Warburton his lowest since coming to office. As a result, some analysts characterised Jokowi as the weakest of Indonesia s presidents (Muhtadi 2015; Wall Street Journal, 23 July 2015). Over the course of 2016, however, Jokowi managed to consolidate his political power. By year s end, he had transformed his governing coalition from a minority, with just 37% of seats in parliament, to a strong 69% majority (table 1). As a result, the opposition Red-and-White Coalition was no longer a serious threat. After a second cabinet reshuffle, in July 2016, analysts concluded that Jokowi was now the undisputed boss of this administration (Jakarta Post, 28 July 2016). Inflation also cooled, the rupiah gained ground, and Indonesia s annual rate of GDP growth was predicted to increase from 4.8% in 2015 to 5.1% in 2016 (World Bank 2016). In response, the president s approval rating improved steadily from October 2015, and surveys in August 2016 reported public satisfaction with Jokowi to be as high as 68% (Indikator 2016). Jokowi s political recovery is the focus of this article. The analysis is structured around three driving questions: How did Jokowi consolidate his power and reshape the political map over the course of 2016? In the process, did Jokowi break with established patterns of post-soeharto politics or simply perpetuate them? And now that he has achieved stability, what is Jokowi s agenda and what kind of Indonesia is he shaping? In response to the first question, I offer a narrative account of three strategies the president used to consolidate his political position. First, Jokowi intervened in the internal affairs of opposition parties and took an assertive approach to coalition-building. Second, he asserted his authority over friends and foes alike in a ruthless cabinet reshuffle. And, finally, he cultivated strategic alliances outside of political parties to shore up his political position. Jokowi s forceful tactics and shrewd political manoeuvrings revealed a hard-headed dimension to his leadership style that was absent during his first 12 months in office. In answer to question two, I suggest that Jokowi s hard-nosed style constitutes a departure from the more conciliatory methods of his predecessor, Susilo Bambang Yudhoyono. Ultimately, however, Jokowi applied the tried-and-true strategy of accommodation that is the hallmark of post New Order politics. To consolidate power, the president had to expand his governing coalition, accommodate vested interests, strike deals with oligarchs, and engage in patronage distribution. The imperatives of achieving stable government thus compelled Jokowi to embrace, rather than challenge, the usual patterns of politics in Indonesia s patronage-driven democracy. Question three addresses the implications of Jokowi s political consolidation. Once he achieved stability, Jokowi provided greater clarity on his agenda and on the kind of Indonesia he wants to shape. I argue that in 2016 a Jokowi-styled new developmentalism began to emerge. Jokowi is almost exclusively focused on a narrow set of pragmatic economic programs specifically, infrastructure, deregulation, and de-bureaucratisation. In its design and implementation, Jokowi s developmentalism exhibits a renewed commitment to a state-centred nationalism that has deep roots in Indonesian history. For Jokowi, the state functions to provide economic services and nurture local industry, and the state sector is the locomotive for his infrastructure boom. The new developmentalism is not accompanied by a substantive program for building transparent and clean government. Jokowi calculated that anti-corruption

4 Jokowi and the New Developmentalism 299 TABLE 1 Proportion of Seats Held in Parliament (%) Government Opposition July September July Source: Data from Katadata.co.id. reforms risk disturbing his hard-won political equilibrium and might hold back the government s ambitious infrastructure programs. Nor is Jokowi s administration interested in pursuing a progressive approach to human rights and justice. During 2016, Jokowi paid attention to what counted politically, and it became apparent that neither human rights nor historical justice was a source of political capital for him. As he lays the groundwork for a re-election bid in 2019, his strategy is to maintain authority over parliament and cabinet and to deliver a handful of tangible economic outcomes to the electorate. Everything else falls outside of his tunnelled vision. There are strong echoes of the past in this new developmentalism. It recalls the New Order s inwardly focused, technocratic agenda, and its conservative and nationalist features reflect trends that pre-date Jokowi s presidency. Yet we should not see this new developmentalism as the product of some novel or even coherent economic strategy. Indeed, the president himself is defined by ad hocery; Jokowi has no deeply held ideological convictions, and he is fickle in his approach to political and economic problems. Instead, I suggest that deeper structural features of Indonesia s socio-political landscape are making their mark on the president, and returning Indonesia to its developmentalist moorings. JOKOWI CONSOLIDATES HIS POWER In 2016, the president proved his credentials as a sharp political operator, enticing and punishing parties and politicians in order to establish control. He took what Mietzner (2016) has described as a coercive approach to expanding his coalition: intervening in the internal affairs of opposition parties and ensuring pro-jokowi factions took control. The president also asserted his authority by way of a cabinet reshuffle in July. He removed ministers he deemed obstructive or overly ambitious and protected his personal partisans, keeping them in strategic positions where they can command state resources and direct policy (Power 2016). Jokowi emerged from the year looking more authoritative, but he also made several blunders and revealed some shortcomings in his leadership style. An Assertive Approach to Coalition-Building After the 2014 elections, Jokowi managed to form a government with minority support in the national parliament, with just 37% of the seats. According to Mietzner (2016, 215), the president was initially unperturbed and felt he could leverage his popular mandate against a hostile opposition. Prabowo Subianto s Red-and-White Coalition took over key positions in parliament and obstructed the president at every turn (Muhtadi 2015). Tensions with Megawati Sukarnoputri, the chair of the

5 300 Eve Warburton Indonesian Democratic Party of Struggle (PDI P), also meant Jokowi could not even rely on the support of the political party of which he was a member. By the end of 2014, it was clear that the president needed to expand his governing coalition. Jokowi had hoped to avoid using the approach of his predecessor, who pursued broad-based coalitions. Yudhoyono welcomed parties with open arms, offering them patronage in return for loyalty. According to Mietzner (2016, 214), Yudhoyono secured political stability... by allowing parties to extract and exploit state resources under their control. Critics argued that these rainbow coalitions hamstrung the president and left him beholden to the interests of a party cartel (Slater and Simmons 2012). Rather than focusing on hard reforms, Yudhoyono was compelled to satisfy and accommodate the range of interests in his coalition (Fealy 2011). Jokowi, in contrast, took a hard-nosed approach to coalition-building, even as he began to realise that he needed broader support. Instead of promising patronage in the same vein as Yudhoyono, Jokowi opted for a more interventionist approach that ensured he was less indebted to (and hence less constrained by) his coalition partners. Mietzner offers unique insight into the president s coalition-building tactics, and his recent study demonstrates that Jokowi intervened in the affairs of opposition parties in order to support pro-government factions (Mietzner 2016). In the wake of their loss in the 2014 presidential election, when their candidate, Prabowo, failed in his bid to become president, PAN (National Mandate Party), Golkar, and PPP (United Development Party) held leadership ballots in which pro-government and pro-opposition factions were pitted against one another. PAN s leadership ballot was relatively straightforward. In the party congress held in March 2015, a pro-jokowi faction led by Zulkifli Hasan narrowly defeated Hatta Rajasa, the incumbent chair and Prabowo s running mate. By September 2015, PAN had joined the governing coalition. The leadership ballots of Golkar and PPP, held in late 2014, were more complicated. In both cases, pro-government and pro-opposition parties claimed victory, triggering months of legal battles. In Golkar, Agung Laksono headed a pro-jokowi faction that challenged long-time party chair Aburizal Bakrie, a prominent political oligarch who had led Golkar into opposition. In PPP, the incumbent, Suryadharma Ali, faced off against a pro-government faction led by Muhammad Romahurmuziy. In both parties, the ballots caused deep divisions, which the president was able to manipulate for his own purposes. As Mietzner (2016, 217) explains, internal ruptures allowed Jokowi to activate a rarely used presidential tool: the authority to recognize a specific faction as the legal representative of the party. This authority comes in the form of a letter of decision from the Ministry of Law and Human Rights. The minister, Yasonna Laoly, issued such letters recognising the pro-government factions as the legal representatives of both Golkar (in March 2015) and PPP (in October 2014). Formal government recognition gives a party s leadership the legal status to make strategic decisions, including nominating candidates for district elections. Eventually, government pressure compelled both political parties to hold a fresh ballot. In both Golkar and PPP, pro-government factions took control of the party and entered Jokowi s coalition. The level of government intervention in Golkar s internal affairs was particularly unusual. Once the Ministry of Law and Human Rights had issued a letter of

6 Jokowi and the New Developmentalism 301 decision recognising Agung Laksono s leadership of the party, Luhut Panjaitan, Jokowi s close ally and the then coordinating minister for political, legal, and security affairs, used his personal networks within Golkar to bolster the progovernment faction and pressure Bakrie to step aside. In what Mietzner (2016, 220) describes as a remarkable intervention by the government in party management, the president compelled Bakrie to hold an extraordinary leadership ballot in which he would not compete. Luhut reportedly advised Bakrie to take a break from his political career and focus on rebuilding his corporate empire, which had suffered from spiralling debt for years (219). Insiders suggested that as long as Bakrie remained chair of Golkar, the government would deny him and his companies access to lucrative contracts and licences (219). Rather than offering patronage or political posts to lure Golkar into the coalition, Jokowi and Luhut withheld legal recognition and threatened to exclude Bakrie, a once powerful oligarch, from the material rewards of government. The strategy worked and Bakrie stepped down. Golkar held an extraordinary leadership ballot in June 2016 with eight competing candidates, all of whom professed support for the Jokowi administration (220). Luhut went even further, however, and backed a particular candidate for the Golkar chair. Luhut continued to exploit his networks within Golkar to ensure victory for the controversial Golkar operator Setya Novanto, who had allegedly been involved in numerous corruption cases. The media followed the Golkar ballot closely, and on several occasions the government was forced to deny that Luhut s support for Setya amounted to an official endorsement (Kompas, 11 May 2016). But many analysts believe the president agreed to the plan (Detik.com, 16 May 2016). Indeed, as Mietzner (2016) argues, Setya was an attractive option for Jokowi on two counts: first, while parliamentary Speaker ( ), Setya had assured clear passage of the government s budget and other key legislation at a time when Jokowi faced pressure from the opposition Red-and-White Coalition and his own party, PDI P. Second, Setya is a highly compromised figure and is unpopular with the public, owing to his alleged involvement in a string of highprofile corruption scandals (Budiartie and Warburton 2015; Jakarta Post, 23 May 2016; Tempo, 17 Nov. 2015). Setya understands his political limitations and has no presidential ambitions. The other prominent candidate for the Golkar leadership was Ade Komaruddin, a charismatic and ambitious figure who, had he risen to the head of the party, would have been more difficult to control and could potentially even run for president in 2019 (Mietzner 2016, 220). In a shrewd move, Jokowi and Luhut ensured the victory of a controversial but useful ally. So not only does the president now have a safe majority in parliament, with PAN, Golkar, and PPP inside government; he also has a partisan supporter atop Golkar, the second-largest party in parliament, with 91 seats. The Cabinet Reshuffle Having tamed parliament, the president then turned to his cabinet. In July 2016, Jokowi conducted a ruthless reshuffle in which he not only rewarded his coalition partners as is the convention in Indonesian politics but also removed obstructive or overly ambitious ministers. Jokowi dismissed five ministers, transferred five others into new positions, and made nine new appointments. A consensus formed quickly among commentators that Jokowi had finally flexed his political muscles. Yet while commentators welcomed Jokowi s assertive approach,

7 302 Eve Warburton the process itself revealed high levels of dysfunction and the cabinet lost several reform-minded ministers. Some of the president s decisions were also made with a striking lack of forethought or consultation, revealing an autocratic impulse in Jokowi s management style. Jokowi s reshuffle was driven by political expediency, and his principal goal was to secure support for the 2019 elections. To this end, Jokowi rewarded his new coalition members with cabinet posts. He put PAN s Asman Abnur in charge of the Ministry of Administrative and Bureaucratic Reform, a position formerly held by Yuddy Chrisnandi of Hanura, and gave Golkar s Airlangga Hartarto the Ministry of Industry, replacing Saleh Husin (also of Hanura). These appointments gave the new cabinet the feel of a Yudhoyono-style rainbow cabinet. There are important differences, however. Jokowi was far less willing than Yudhoyono to bend to the wishes of his new coalition partners. For example, even though Golkar is the second-largest party in parliament, it was offered only one ministry. PPP, meanwhile, received no extra cabinet posts after joining the coalition. This stands in contrast to Yudhoyono s approach, in which he distributed posts in loose proportion to each party s seats in parliament. Jokowi also pushed back against the demands of his original coalition partners. For example, journalists and political analysts reported that Surya Paloh, chair of the National Democrats (NasDem), had asked that his close ally, realestate businessman and fellow NasDem politician Enggartiasto Lukita (Enggar), be given the Ministry of Land and Spatial Planning (pers. comm. 13 and 16 Aug. 2016); instead, Jokowi gave Enggar the Ministry of Trade. Meanwhile, Megawati Sukarnoputri, the chair of PDI P, had pressured Jokowi consistently for two years to appoint her former adjutant General Budi Gunawan as chief of Indonesia s National Police. Jokowi initially agreed, but controversy erupted in 2014 when the Corruption Eradication Commission (KPK) named Gunawan as a corruption suspect (Muhtadi 2015). The president subsequently resisted Megawati s demands and, in August 2016, appointed a younger, reform-minded officer, Tito Karnavian, to this powerful position. Jokowi made Gunawan the head of Indonesia s National Intelligence Agency (BIN) a senior but in fact less prestigious and less powerful role within Indonesia s security architecture. The president was thus managing to both accommodate and control the parties in his coalition. What emerged was a very different picture from the one analysts painted a year earlier, of a president overwhelmed and trapped by Indonesia s oligarchic political system (Muhtadi 2015). Yet the reshuffle also revealed the president s shortcomings. Several controversies indicated poor judgement on Jokowi s part or an unwillingness to consult with his advisors. For example, Jokowi appointed Wiranto, a New Order general and the chair of Hanura, to the prestigious position of coordinating minister for political, legal, and security affairs. Clearly, Jokowi did not seek wide counsel before making this appointment. In 2003, Wiranto was indicted for crimes against humanity by the United Nations for his role in the military-backed massacres of East Timorese in Jokowi was either not aware of Wiranto s criminal past or did not believe the appointment would tarnish Indonesia s international image. In any case, the decision illustrates a striking lack of attention to political optics and little sensitivity to problems of security reform and historical justice in Indonesia.

8 Jokowi and the New Developmentalism 303 The ruckus surrounding the new minister for energy and mineral resources was particularly embarrassing for the president and his advisors. Jokowi removed Sudirman Said, who was widely regarded to have been the country s first reformist energy minister in more than a decade, and replaced him with Arcandra Tahar, a little-known engineer. (Sudirman had fallen out of favour with Jokowi after having several public spats with other cabinet ministers.) Arcandra, however, was a naturalised American citizen, which proved a serious problem because Indonesia does not allow dual citizenship. Once the press got wind of Arcandra s American citizenship, a media firestorm raged and Jokowi was forced to remove him from his post after just 20 days (Kompas, 15 Aug. 2016). Despite the embarrassment of this bungled appointment, the president was reportedly adamant that Arcandra be reinstated. The pair had built up a rapport, and so Jokowi ordered his government to do everything it could to resolve the legal issues surrounding Arcandra s citizenship. Two months later, in a surprise move that few observers could explain, the president appointed Ignasius Jonan as the new energy minister, with Arcandra as his deputy. Jokowi had fired Jonan from the transport ministry in the July reshuffle, ostensibly for his lack of commitment to Jokowi s policy agenda. Jonan had no experience in the extractives sector and was told of his new role only two hours before his inauguration. Neither the vice-president, Jusuf Kalla, nor the coordinating minister for maritime affairs and natural resources, Luhut Panjaitan, attended the ceremony, because they too were informed of the decision only at the last minute (Jakarta Post, 15 Oct. 2016). This kind of erratic decision-making has, for Jokowi, become something of a pattern. Several reformist ministers were removed as well. These changes illustrate the president s pivot away from reform and towards political expediency. For example, Anies Baswedan, a former rector of Paramadina University, was removed from the Ministry of Education and Culture to make room for a Muhummadiyah representative, Muhadjir Effendy. 1 The palace reported that Jokowi was disappointed with Baswedan s handling of the Smart Indonesia Card, which is one of the president s signature programs and provides poor Indonesians with subsidised education (Merdeka.com, 27 July 2016). Yet the consensus among insiders is that Jokowi also harboured concerns about the charismatic minister s political aspirations and feared Anies might make a bid for the presidency in Since leaving cabinet, Anies has indeed pursued a political career and he will compete in Jakarta s gubernatorial elections in In appointing NasDem s Enggar as the new minister for trade, Jokowi made the outgoing Thomas Lembong the head of the Investment Coordinating Board (BKPM) a demotion for a reform-minded minister who many felt had the potential to invigorate Indonesia s trade relations and roll back protectionist policies. Lembong s liberal approach to trade policy had irked the more nationalist politicians in Jokowi s cabinet, and the president himself became uncomfortable with Lembong s market-oriented position on food imports. The president decided instead to hand the reins of trade policy to one of his coalition partners. Enggar, 1. Muhummadiyah is one of Indonesia s largest Islamic organisations. It is not a political party, but it received representation in Yudhoyono s cabinet in return for political backing.

9 304 Eve Warburton like Jonan, brought no specific experience to this new role, and in fact this was the first time since 1999 that an active party politician had held the trade portfolio (Jakarta Post, 4 Aug. 2016). The reshuffle demonstrated that Jokowi s priorities in 2016 were politics over good governance, and stability over reform. Throughout the year, we gained fresh insight into the president s leadership style as well. Jokowi is calculating and often hard-nosed in his approach to ministers, advisors, and even his closest confidantes. His bringing back Sri Mulyani Indrawati as finance minister, a role in which she gained wide respect during Yudhoyono s presidency, showed foresight and a commitment to sound financial management during a time when the budget was under significant pressure. Yet, in other instances, Jokowi s decisionmaking was inept, and the president displayed strikingly poor judgement when it came to several strategic appointments. The overall picture is one of inconsistency. Jokowi manages government in an unsystematic way, giving the impression of a president defined largely by ad hocery. The President s Enablers Jokowi could not have consolidated power without a small group of loyal enablers wealthy politico-business elites and former generals with the financial resources and political networks that the president needs in lieu of a party machine. Power (2016), in his post-reshuffle analysis, made the compelling argument that Jokowi protects these personal partisans and keeps them in positions known to be rich in rent and patronage resources, in large part because they are crucial for his re-election in Among Jokowi s inner circle, Rini Soemarno is arguably his closest ally. Rini is the minister for state-owned enterprises (SOEs), and she shapes the president s thinking on policy areas from infrastructure to energy. Rini played a key role in Jokowi s rise to the presidency, having helped to finance and organise his bid for office (Power 2016). After the election, in mid-2014 Jokowi made Rini head of the transition team that would help him design his first cabinet and lay out a strategic plan for his government s policy agenda. Rini quickly fell out of favour with PDI P over the distribution of cabinet positions, and, in 2016, Jokowi s closeness to Rini remained a sore point in the president s relations with his party and its matriarch, Megawati. For almost two years, PDI P privately and publicly attacked Rini s credentials and integrity, and Megawati consistently demanded Rini be removed from cabinet (Tempo, 10 Jan. 2016). But Jokowi refused, instead keeping Rini in a strategic post where she could command state resources and direct key government policies. Another of the president s close allies is Amran Sulaiman (Power 2016), a prominent businessman (with interests primarily in agribusiness) who helped finance and organise Jokowi s presidential campaign. Jokowi gave Amran the Ministry of Agriculture another portfolio known to be rich in patronage opportunities with the authority to distribute agricultural concessions and import licences. Jokowi is reportedly fond of Amran, and has allowed him to drive the government s policy on food security and agricultural self-sufficiency. Despite fluctuating food prices, which can be linked directly to Amran s policies, his position as minister remained safe (Jakarta Post, 4 Aug. 2016; Power 2016). Luhut Panjaitan has been another key enabler since the early days of Jokowi s presidential campaign. Jokowi has relied on Luhut for both financial resources

10 Jokowi and the New Developmentalism 305 and political strategy. On coming to power, Jokowi initially made Luhut his chief of staff at the palace, and then, in 2015, appointed him coordinating minister for political, legal, and security affairs. From this post, Luhut used his personal networks and political acumen to help the president pacify the opposition and establish majority government. Yet the president gradually became uncomfortable with Luhut s high public profile. Luhut interpreted his brief broadly, and took the lead on everything from internal and international security issues to natural-resource contracts, trade, and even problems of poverty reduction. Jokowi reportedly disliked the outward perception of the former general s influence over the palace, so in the July 2016 reshuffle Jokowi moved Luhut to the less prestigious position of coordinating minister for maritime affairs and natural resources (Jakarta Post, 28 July 2016). As Power (2016) points out, though, Luhut is now overseeing energy and resources, sectors in which his company PT Toba Sejahtra has significant holdings, and which remain particularly ripe for rent-seeking. In other words, the president placed one of his key enablers and political financiers at the apex of the country s most important and lucrative sectors. In summary, since his campaign in 2014, Jokowi has not been able to rely on his party for consistent support and so has cultivated personal alliances with powerful and wealthy individuals outside political parties. According to Power (2016), Jokowi will keep these individuals in strategic ministries as a strategy to resource and manage a re-election bid that limits his indebtedness to parties. JUST A NORMAL POLITICIAN? This brings us to the second driving question of the analysis: in the process of consolidating power and achieving stability, has Jokowi broken with established patterns of post New Order politics or simply perpetuated the conventions of Indonesia s patronage-driven democracy? I argue that Jokowi s interventionist tactics mark a departure from the more conciliatory methods of his predecessor. Yudhoyono secured stable government by welcoming parties inside the governing coalition, promising them patronage, and providing them with cabinet positions. Yudhoyono saw himself as a moderator, and his role was to mediate competing interests within Indonesia s fragmented democratic polity (Aspinall, Mietzner, and Tomsa 2015). For this reason, he sought large, inclusive political coalitions and avoided any actions or policy decisions that might alienate coalition members. Yudhoyono also accommodated competing interest groups and rarely disciplined recalcitrant ministers or coalition partners (Aspinall, Mietzner, and Tomsa 2015). As a result, he earned a reputation for equivocation and for avoiding tough decisions. Jokowi, in contrast, has proved to be more hard-nosed in his approach to coalition-building. As we have seen, during 2015 and 2016 he intervened in opposition party affairs to support pro-government factions, and offered these parties fewer rewards in the way of ministerial posts and patronage resources. Jokowi s decision to back Setya Novanto for the Golkar chair was a particularly potent demonstration of the president s embrace of realpolitik and, according to Mietzner (2016), of his willingness to engage in a level of intervention in party affairs that was unprecedented in the democratic era. When it came to the reshuffle, Jokowi asserted his authority, removing obstructive ministers some of them

11 306 Eve Warburton reformists and those he felt displayed too much political ambition. In 2016, we saw a Machiavellian streak in Jokowi s leadership style that was not on display during his first 12 months in office. To be sure, the hostility that Jokowi faced in parliament, and the fractiousness within his own cabinet, necessitated a particularly assertive response. Nonetheless, the president s calculating and, at times, uncompromising nature surprised commentators and insiders alike. Some of Jokowi s tactics and his personal style might stand out as different, but the president ultimately stuck to a strategy of accommodation that has been the hallmark of post-soeharto politics. When Jokowi first took office he flirted with the idea of doing things differently. He thought he could rule with a minority in parliament and build a coalition tanpa syarat, or without conditions. Jokowi wanted his government to look different from Yudhoyono s and to avoid the rainbow coalitions for which his predecessor was famous. Jokowi s tumultuous first year in power proved that such a course of action brings too much political risk. And so, in pursuit of power and stability, the president embraced established patterns of post-soeharto politics. He expanded his coalition to form a large majority in parliament. In the process, the president created a broad-based coalition of the sort he had shunned before coming into office. Jokowi struck deals with oligarchs and placed wealthy, powerful partisans in strategic posts, giving them control over state resources and authority over lucrative industries. The president and his allies accommodated vested interests in order to overcome an aggressive opposition in parliament. Like his predecessor, Jokowi placed a premium on stability and pursued the kind of political alliances that would deliver a coherent political landscape. It appears, therefore, that over his first two years in office the imperatives of running a stable government in Indonesia s fractious, patronage-driven democracy left their mark on a president who had set out to do things differently. Reflecting on Jokowi s second year as president, one member of cabinet concluded: In 2016, it became clear to me and others in cabinet that in fact Jokowi was just a normal politician (pers. comm. 25 Aug. 2016). THE NEW DEVELOPMENTALISM Now that Jokowi has consolidated his power and achieved political stability, we have more insight into his agenda and what he wants for Indonesia. I suggest that in 2016 a Jokowi-styled new developmentalism began to emerge. It is pragmatic and nominally pro-poor in its policy agenda and demonstrates a renewed commitment to a statist nationalist ideology. This new developmentalism is rooted in the past. It bears uncanny parallels with the New Order s emphasis on technocratic development programs, and its statist and nationalist features have long loomed large in Indonesian economic planning. Yet the combination of Jokowi s personal agenda and leadership style means that a narrow and no-frills version of an old developmental model is taking shape in contemporary Indonesia. The term developmental state was originally used to capture the East Asian model of economic growth (Woo-Cumings 1999). After the Second World War, Japan, Taiwan, and South Korea adopted interventionist economic policies and established efficient bureaucracies, both of which drove fast-paced industrialisation. I do not use this term to evoke the characteristics of an ideal-type

12 Jokowi and the New Developmentalism 307 developmental state; indeed, Indonesia has never displayed the kind of bureaucratic efficiency that is characteristic of the East Asian developmentalist model. Nor do I use it in the same way as scholars of the New Order. Back then, Indonesia constituted what Feith (1981) called a repressive developmental state. Under Soeharto, all functions of government were geared towards creating amenable conditions for economic growth. The state justified its co-optation of societal groups and repression of political dissent in the name of accelerated economic development (Feith 1981, 502). In this context, policy was exclusively the task of bureaucratic elites, technocratic professionals, and the military, rather than that of political or legislative elites (Leftwich 1995). These institutions of repression no longer exist in contemporary Indonesia. Instead, I use developmentalism to describe how ideas and practices associated with the developmental paradigm have risen to prominence under the Jokowi administration. Developmentalism is driven by the idea that the task of the state is to achieve fast development to overcome... backwardness and catch up with advanced countries (Feith 1981, 502). Other political goals are subordinated to the overarching aim of achieving rapid economic growth. State intervention in economic life is a necessary ingredient for accelerating national development and achieving industrialisation (Leftwich 1995). I suggest that Jokowi and his administration are committed to this core developmental agenda and espouse a related set of narrow, pragmatic economic policy goals. (Though, as we shall see, their success is far from guaranteed.) The new developmentalism is in many ways conservative; it is characterised by an aversion to politically sensitive problems of law reform, corruption, and even good governance. Such institutional challenges are, in the eyes of the president, subordinate to the more urgent goal of fast-paced economic development. In addition, Jokowi apparently believes that pursuit of a reformist agenda may jeopardise his hard-won political stability. Nor is Jokowi interested in pursuing a progressive approach to problems of civil and political rights or historical justice. In fact, although the Jokowi administration is not resurrecting the repressive tools of the New Order model, we can observe in this new developmentalism a growing impatience with liberal reform and an indifference towards human rights. The rest of this section is dedicated to explaining the new developmentalism and its pragmatic policy focus, its statist nationalist orientation, and its conservative approach both to problems of law reform and good governance and to issues of rights and justice. Jokowi s Narrow Agenda Jokowi views the state s principal task as service delivery. His administration focuses almost exclusively on a restricted set of practical services and tangible economic outcomes. Famous initially for his free health and education programs for the poor, the president now pours much of his energy into promoting the government s agenda for an infrastructure boom. While the president still frames his infrastructure plans as a key component in addressing inequality and poverty, in 2016 there was a notable shift away from Jokowi s previous focus on pro-poor and populist policies and towards a growth-focused developmentalist agenda. In his state-of-the-nation address in August 2016, Jokowi proclaimed 2016 the year of accelerated national development. His speech was domestically oriented,

13 308 Eve Warburton with little time spent on foreign policy and with no Yudhoyono-style platitudes about transparency, justice, or democracy. Instead, his speech concentrated on the government s program for reducing inequality and poverty, summed up in a three-word mantra infrastructure, deregulation, and de-bureaucratisation. For infrastructure, the government has set ambitious (and most would argue impossible) goals: to deliver 35,000 megawatts of electricity to the grid; to upgrade and develop five port hubs and 19 feeder ports; to build 3,650 kilometres of new roads; and to achieve 100% access to clean water nationwide. The program is set to cost over $411 billion, of which only half will come from the state budget (Bloomberg. com, 1 July 2016). Jokowi s deregulation policies are designed to cut red tape and attract infrastructure investment. De-bureaucratisation similarly aims to streamline and reduce government procedures in order to accelerate infrastructure projects. At public events around Indonesia, in front of business people, regional parliamentarians, and foreign investors, Jokowi speaks with a rare energy about his plans to cut red tape. On this topic, Jokowi is unusually engaging; he tends to read verbatim from prepared texts, and most of his speeches are wooden and colourless. But on his three favourite issues, the president can go off-script, speak energetically, and elicit cheers of approval. Indeed, since the early days of his political career, Jokowi has consistently expressed frustration with Indonesia s burdensome bureaucratic procedures (Mietzner 2015, 25). This is where the president s passions lie. Jokowi and his government market all of these policies as pro-poor. Jokowi maintains that an infrastructure boom will alleviate regional inequality, create economic opportunity in the outer islands, and jumpstart stagnating growth (Presidential Office, press release, 19 Nov. 2015). The government argues that food and services costs are higher in Indonesia s outer islands because of poor infrastructure, and that improvements in physical infrastructure will bring down costs and therefore prices. The government s 13 recent economic deregulation packages are designed to attract investment in these infrastructure projects. The goal is to revitalise Indonesia s investment regime, with the ultimate goal of modernising its physical infrastructure. 2 While nominally pro-poor, none of these policies is explicitly directed at Indonesia s poorest citizens unlike the subsidised health and education programs Jokowi introduced during his time as Jakarta governor. Arguably, Jokowi s pro-poor image has lost some of its shine over the past two years. 3 Jokowi s infrastructure drive is not particularly new. In fact, most of the infrastructure projects identified for investment under the Jokowi administration were part of Yudhoyono s Master Plan for the Acceleration and Expansion of Indonesian Economic Development (Davidson 2016). Jokowi, however, has signalled a more aggressive commitment than Yudhoyono to the developmentalist agenda. First, he has provided far more funding. After cutting fuel subsidies, Jokowi was able to allocate $23.9 billion (Rp 290 trillion) to the government s 2. Many economists are sceptical about the overall impact these packages will have on growth (see Hamilton-Hart and Schulze 2016, in this issue) 3. Of course, the president is likely to reinvigorate his pro-poor and populist credentials with new policies as he approaches the 2019 elections.

14 Jokowi and the New Developmentalism 309 infrastructure projects, an increase of 86% on the previous government s budget allocation (Davidson 2016). Second, the modernisation of Indonesia s infrastructure constitutes a more central component of Jokowi s political agenda. In 2016, the administration spent comparatively little energy on marketing education, health, or other social programs. Infrastructure development has become a hallmark of Jokowi s government in a way it never did for Yudhoyono s. Statist Nationalist Ideological Orientation The new developmentalism also exhibits a renewed commitment to a statist nationalist ideology that is typical of developmentalism and has deep roots in Indonesia. To be sure, the Jokowi government has selectively embraced liberal and market-oriented policies over the last two years. Its 13 economic deregulation packages are designed to encourage private-sector investment, and the 10th package also lifted caps on foreign investment for 35 industries. The president is acutely aware that his $411 billion infrastructure plans will require a significant contribution from the private sector (Bloomberg.com, 1 July 2016). But programs of liberalisation are highly circumscribed. The president sees liberalisation as the last resort for attracting capital under conditions of serious budget constraint. Indeed, the cabinet secretary, Pramono Anung, speaking on behalf of the government, was at pains to frame the deregulation packages as an effort to modernise, not liberalise Indonesia s investment regime (BBC Indonesia, 12 Feb. 2016). Throughout the Soeharto era, economic planning oscillated between market-oriented policies, on the one hand, and a statist nationalist ideology that favoured the expansion of SOEs, import substitution, subsidies, and state-funded industrial projects, on the other hand (Hill 1994). A similar pattern pertains to contemporary economic policy-making. Overall, however, the new developmentalism bears the hallmarks of a statist nationalist ideology. It is statist because the government views a strong and stable state as a necessary component in accelerating national development, with the state sector as a locomotive for economic growth; and it is nationalist because the government justifies state intervention in the name of building state strength and sovereignty and reducing dependence on foreign capital and international markets (Chalmers 1997, 27). The state sector has received a significant boost under the Jokowi government (Davidson 2016). The president and his minister for SOEs, Rini Soemarno, have distributed special privileges to state-owned companies, provided them with access to capital, and offered them strategic contracts (Ray and Ing 2016). The government allocated SOEs $3 billion in additional state funds in 2015 (Wall Street Journal, 20 Apr. 2015). And there are plans afoot to merge and streamline the SOE sector by establishing large holding companies in key industries (Jakarta Post, 1 Mar. 2016). The stated goal is to improve the efficiency of the sector, and thereby increase the capacity of SOEs to attract capital, so it can become a locomotive for Indonesia s development (AntaraNews.com, 29 Feb. 2016). Jokowi appears convinced that the state should control imports and exports and nurture local industry. His administration argues that reliance on foreign goods undermines domestic productivity and the prospects for long-term industrialisation. This mode of thinking has directed the government to limit imports for agricultural produce, food, livestock, and the components for manufacturing

15 310 Eve Warburton smartphones (Economist, 9 May 2015). The trade and agriculture ministries recently proposed that beef import licences be granted on the condition that companies demonstrate a commitment to cattle breeding, in order to boost the local cattle industry and reduce reliance on imports (Jakarta Globe, 26 Sept. 2016). In the mineral mining sector, meanwhile, Jokowi s government continues to force downstream industrialisation by dictating that companies may not export unprocessed mineral ores (Busch 2016b; Warburton 2015). Despite the pressures of the global commodity downturn, the government continues to maintain onerous conditions for foreign investment in mining (Straits Times, 10 May 2014; Warburton, forthcoming). The logic is that foreign companies have exploited Indonesia s resources for too long and it is now time to create more space for Indonesians to extract their country s riches. The aspirations underpinning these policies are selfsufficiency and economic sovereignty. The president himself has no deeply held commitment to any particular economic ideology (Mietzner 2015, 25). He takes a rather ad hoc approach to economic policy, trialling new ideas and listening to different sorts of economic thinkers. Many within Indonesia s private sector, and particularly the foreign business community, expected that Jokowi s experience as an entrepreneur would lead him to embrace a more market-oriented and open approach to investment and economic development (Wall Street Journal, 27 Aug. 2015). But Jokowi assumed the reins of power during a time when nationalist ideas had become a prominent feature of economic policy-making; indeed, Yudhoyono s second term was characterised by an increase in protectionism and by greater limitations on foreign companies (Warburton 2015; Patunru and Rahardja 2015). Jokowi is riding this wave of economic nationalism. He now leans towards the nationalist position, reflecting the ideological persuasion and interests of many Indonesian politicians and policymakers. The statist nationalist sensibilities of Indonesia s political class are leaving their mark on the president, and he is responding to the structural imperatives of economic policy-making in Indonesia. No Anti-corruption Agenda Jokowi s new developmentalism comes with no substantive plan for dealing with corruption or promoting clean government. Transparency and good governance were once at the forefront of Jokowi s political identity. He invested in this image because he believed it to be an important source of political capital. For example, as governor of Jakarta, Jokowi aligned himself with the anti-corruption movement and publicly asked the KPK to assist him in his fight against corruption (Kompas, 27 Nov. 2012). After his presidential victory, Jokowi also invited the KPK to help vet potential ministers for the new cabinet. Yet the president now eschews anything that resembles an anti-corruption crusade, and avoids the kinds of institutional changes that might confront or disrupt his hard-won political equilibrium and the strategic alliances he has built over the past two years. Jokowi now subscribes to the idea that anti-corruption reforms are disruptive and inefficient and hold back development a conventional position within Indonesia s political establishment (Gammon 2015). Jokowi s brief flirtation with an anti-corruption agenda has come to an end, and transparency is no longer a political priority for him. Arguably the most powerful illustration of Jokowi s retreat from reform involves the Ministry of Energy and Mineral Resources. In the early days of the

16 Jokowi and the New Developmentalism 311 Jokowi presidency, the ministry appeared to be on the brink of an institutional renaissance. The president and his minister, Sudirman Said, introduced several ground-breaking reforms: the government removed petroleum subsidies that had burdened the state budget for years; Jokowi and Sudirman established an ad hoc team to investigate the notoriously corrupt oil-importing sector something no previous president or minister had been brave enough to do and then disbanded Petral, the oil-trading arm of Pertamina, the state-owned oil and gas company; 4 the president appointed Amien Suryanadi, former deputy chair of the KPK, to the oil and gas regulator, SKK Migas, which had been plagued by bribery scandals and suffered from systemic corruption; and Sudirman shook up his ministry s bureaucracy, changing more than 1,000 positions and introducing ad hoc teams for innovative policy design. After six months, however, Jokowi s zeal for reform began to fade. Sudirman s emphasis on technocratic governance earned him many enemies, including Jokowi s loyal strategist Luhut Panjaitan. Sudirman and Luhut disagreed on the direction of Indonesia s most strategic energy and mining contracts, and Sudirman had regular public spats over these issues with Luhut s ally, Rizal Ramli, at the time the coordinating minister for maritime affairs and natural resources (Merdeka. com, 24 Mar. 2016). Sudirman also challenged another of Jokowi s trusted advisors, Rini, and criticised the state-owned electricity provider, PLN, for its handling of the government s electrification program. These conflicts disrupted the cabinet, irritating the president. Jokowi also became concerned about Sudirman s connections to the vice-president, Jusuf Kalla, whose networks in cabinet Jokowi had been working to undercut (Jakarta Post, 27 July 2016). The Freeport scandal that erupted in late December 2015 offers the most compelling illustration of Jokowi s abandonment both of Sudirman and of his own reformist agenda. Sudirman went public with a recording of a conversation in which Setya Novanto, then parliamentary Speaker, and disreputable oil trader Reza Chalid are heard trying to extort business opportunities and shares out of Freeport Indonesia, the largest foreign mining company in the country (Lubis 2015). They even name Luhut as the person able to secure presidential support for an early extension of Freeport s contract. The tape caused a media sensation and dominated headlines for weeks (Burdiartie and Warburton 2015). One observer even likened it to Indonesia s Watergate moment (New York Times, 17 Dec. 2015). 5 Sudirman led the charge against Setya, expecting the president s support. But it was not forthcoming. In fact, the only casualty of the Freeport scandal was Sudirman himself. Luhut and Setya had proven themselves politically valuable to Jokowi by helping to manage a hostile opposition in parliament. Sudirman s reformist crusade, on the other hand, was disruptive. As a result, while Setya was 4. For decades, an invincible set of disreputable rent-seekers monopolised Indonesia s oilimporting sector and used part of their profits to pay for political protection at the highest levels. Sudirman caused controversy when he stated publicly that all previous attempts to uncover the scheme had stopped at [Yudhoyono s] desk, implying that the president himself was protecting an alleged mafia (Kompas, 19 May 2015). 5. Almost a year later, in September 2016, Setya won his case in the Constitutional Court, where he had challenged the constitutionality of the tape recording (because it was conducted by a private citizen and not at the behest of law enforcement). Soon afterwards, the parliamentary ethics committee cleared him of any wrongdoing.