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Jakarta Post

A political-economic view of a Jokowi-Kalla Candidacy

  • Fachry Ali

    The Jakarta Post

Jakarta   /   Mon, May 5, 2014   /  10:16 am

Although Joko '€œJokow'€œ Widodo generated a less spectacular effect for his Indonesian Democratic Party of Struggle (PDI-P) in the April 9 legislative election, he remains favorably positioned for the July 9 presidential election. We need just one word to explain this: '€œpopulism'€.

But it needs more than one word to explain why '€œpopulism'€ is so marketable today. This is related to the '€œcounter-elite'€ image projected by the Javanese traditional popular stories, especially in the wayang (shadow puppet) world, where the wong cilik (little people) also play a role.

Semar, for instance, is a respected person. Having three children (Petruk, Gareng and Bagong), Semar symbolizes not only the common people in the wayang social structure, but also a titisan (incarnation), an incarnation of a god.

In a normal political situation, Semar and his children often act as critics. But in a crisis, they take a leading role to bring the situation back to normality.

It is upon this publicly digested traditional cultural discourse where Jokowi'€™s meteoric political career resides, for his appearance hints at the elite'€™s failure to perform their duty. Jokowi'€™s populism therefore is the antithesis of the previous elitist tendency.

Rhetorically, his populism meets the partai wong cilik (the party of the little people), jargon of the PDI-P. Their symbiosis brings profound cultural and political effects that Jokowi'€™s political popularity is a pasemon (allusion) to the current Indonesia'€™s radical elitism.

However, this populism is problematic in terms of economic policies. His populism invariably leads him to pursue a people-based nationalistic economic policy. Though its details remain to be seen, it is quite likely that his aides will point to Keynesian economics as a basis of his economic policies, for it allows state intervention in the economy.

Will Jokowi be able to realize it? This is crucial, for what he will face will not only be the domestic capitalist oligarchs. He will also have to deal with the interlinked relationship between the global dynamic and domestic economic sustainability. A simple example is the unfavorable situation faced by Indonesian contractor companies in the 2015 ASEAN Economic Community (The Jakarta Post, March 17).

This ever-growing economic community will open huge opportunities in the construction sector for its Gross Domestic Product (GDP) is estimated to hit US$2.1 trillion. But, the domestic bank interest rate stands at 13.5 percent, Indonesia'€™s contractor companies cannot be optimistic. For this interest rate is too high compared with Malaysia, Thailand and Singapore, which range between 3 to 4 percent. This means Indonesia'€™s contractor companies would be less competitive.

Hypothetically, if this was faced during the Jokowi presidential period, his populist-nationalistic tendency would theoretically tend to lower the bank interest rate to strengthen national companies'€™ competitiveness.

However, this measure will strike unpredictable economic reality. In addition to the central bank'€™s independent status where its policies are free from any intervention, this tight monetary policy is driven by forces beyond political authority: Current account deficit, an unbalanced import-export ratio and capital outflows as the consequence of the tapering of the US Federal Reserve is quantitative easing policy since the end of 2013.

This leads to other negative results such as foreign reserve depletion, automatic domestic currency depreciation and a surge in inflation. This economic reality thus reduces the state autonomy in economic policy making. Both Jokowi'€™s populism and the PDI-P'€™s partai wong cilik jargon would be challenged by this structural condition.

It is in this context, if chosen as Jokowi'€™s vice-presidential candidate, Jusuf Kalla could be a valuable partner for him. Kalla is not only a seasoned vice-president (2004-2009), but it was he, during his vice-presidential tenure, who took brave crucial and strategic economic policies.

In the case of Keynesian economics, it was Kalla who introduced the direct cash assistance (BLT) program to soften the people'€™s negative impact from the government'€™s fuel subsidy cutback in 2009.

And it was Kalla also who directed state-owned banks to form a budget consortium to finance the Java-Bali toll roads. It must be kept in mind that Kalla'€™s measure was taken at the time amid the lowest point of bank intermediacy function.

Kalla is thus not only in line with Keynesian economics, but also possesses '€œvalor'€ in making use of state resources both for the sake of the people'€™s interest and the productive purposes.

It is still an enigma, surely, how Kalla will successfully deal with the House of Representatives (DPR) in launching economic reforms. For while notoriously known for being plagued by vested interest-based factionalism, the House has decisive power and the government invariably needs its approval of any economic policy.

I have no special answer to this intricate question. But referring back to what he did during his tenure, Kalla had not only repeatedly succeeded in taking sensitive economic decisions with less public uproar, but was agile enough in the diplomatic field.

It was Kalla who was able to end the 30-year-old Aceh conflict in 2005. Kalla perhaps is a prodigy of a talented public official for he has the ability to gear interchangeably between economic expertise and diplomatic skills.

 Isn'€™t facing the DPR substantially a diplomatic battlefield?

In conclusion, the Jokowi-Kalla duet will respectively strengthen each other. As the most popular presidential candidate, Jokowi has potential to win enough votes. But, once chosen, he will soon face domestic capitalist oligarchs and the global inter-linkage-induced ups and downs of the national economy. This would likely reduce his popular-based political legitimacy.

As a businessman, Kalla is not only rich with experience in handling the economy, but also possesses a special ability needed to ward off the domestic capitalist oligarchs'€™ intervention as well as the House'€™s pressures.

He is too old to be Jokowi'€™s next competitor for the 2019 presidential election. Kalla'€™s main function would thus be confined only as Jokowi'€™s guide in facing the oligarchs of domestic capitalists and the puzzle of the global economy '€” providing valuable capital for Jokowi.

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Kalla possesses '€˜valor'€™ in making use of state resources ...

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The author is the co-founder of the Institute for the Study and Advancement of Business Ethics.

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