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he world has yet to fully recover from the global financial crisis. Economic growth is still lackluster. Inequality continues to increase even in countries where poverty has gone down. These factors are widely seen as the main causes that have led to the rising anti-global sentiment around the globe, and prompted leaders to adopt populist and inward-looking policies. As a consequence, many elections and referendums have ended up with surprising results: Duterte, Brexit, Trump, and there may be more yet to come.

In Indonesia, such discontent has also manifested itself in rising nationalism, which in the economic sphere takes the form of (or is used as justification for) protectionism — the rejection of foreign interference and economic policies aiming for self-sufficiency in a wide range of commodities, including those of which Indonesia is a natural net importer. But economic protectionism in Indonesia has been going up and down; the recent wave in fact started to re-emerge in the early 2000s, and despite some reform initiatives, economic nationalism is in general amplified under the current administration and might continue to be so in the near future.

In the aftermath of Sukarno’s ultra-nationalistic era, Soeharto’s New Order started with a series of market-friendly reforms, supported by able technocrats under the leadership of Widjojo Nitisastro. This period of reforms included opening up the capital market, welcoming foreign investment and relaxing trade policies. But it did not last long.

The commodity boom in the early 1970s and the two oil booms in 1973-1974 and 1979-1980 brought a windfall that allowed the government to entertain the calls for protectionism in the form of import substitution, local content requirements, import licensing and export bans.

When the oil price plunged in the 1980s, gone were the bonanzas. The strained budget coupled with global recession forced the government to make a detour. From the mid-1980s to the mid-1990s, Indonesia experienced bold deregulation, export promotion and devaluation. However, business groups who had grown strong in the previous, protectionist era still had their way, now joined by emerging new cronies. Import monopolies and other facilities given to these groups, especially those closest to Soeharto, continued.

Then the Asian financial crisis hit the region in 1997, plunging the Indonesian economy into an abyss. Once again, hard times forced the government to adopt more liberal policies. Import restrictions were removed, tariffs were cut and Indonesia’s involvement in international trade agreements increased.

But the interest in free trade was again short-lived. Protectionism started to creep back again in the early 2000s, beginning with restrictive measures for food crops and followed by trade regulations and licensing requirements on textiles, steel, sugar and cloves. This continued during the second term of Susilo Bambang Yudhoyono, following the 2008-2009 global financial crisis.

The government passed new laws on mining, farming and horticulture, all of which had a serious impact on the openness to trade and investment. Furthermore, many import licenses were reinstated, the distribution of imported goods was tightened and exports of raw minerals were banned.

Under Joko “Jokowi” Widodo the trend toward greater nationalism is on the rise, too. Often times, however, his stance appears as a mix between pragmatism and ambivalence. Addressing the Indian Ocean Rim Association (IORA) Leaders Summit in March, Jokowi embraced both nationalism and internationalism. Quoting Sukarno, he reiterated that “internationalism cannot live without nationalism” and vice versa, nice-sounding rhetoric, but whose exact meaning is unclear. In other events Jokowi is always eager to extend his invitation to foreign investors to come to Indonesia.

In relation to economic policies, Jokowi’s stance leans more toward protectionism. Recalling the presidential campaign days, Jokowi’s promises contained a lower dose of nationalism compared to his rival Prabowo Subianto. Yet he started his presidency with a heavy use of protectionist measures, mostly via the Trade Ministry, Agriculture Ministry and Industry Ministry. It is true that tariffs are low already, but protectionism can continue in the form of non-tariff barriers; and this type of trade barrier indeed proliferated under Jokowi’s first Cabinet. Studies have shown that non-tariff barriers such as quota, import license or export ban are prone to corruption, and in democratic politics like Indonesia, they may lead to a “protection for sale” phenomenon, whereby protection is given to the highest bidders — or cronies.

Perhaps in response to criticism, Jokowi reshuffled his Cabinet. Within three years into his presidency, he had already had three trade ministers: Rachmat Gobel, Thomas Lembong and Enggartiasto Lukita. It seems like a swing from protectionist to market-friendly back to protectionist again — but it might as well be a reflection of the absence of a clear vision.

How to explain this rising economic populism and protectionism under Jokowi? In the beginning of Jokowi’s presidency, the rupiah appreciated, making exports more expensive. Around the same time, Indonesia’s competitiveness in general dropped as the commodity boom ended. Both these factors increased the demand for protection. Then there is a bandwagon effect.

Alas, despite the fact that protectionist measures often bring negative consequences, they seem to be taking the stage again almost everywhere, including in Jokowi’s Indonesia. The recent rice fracas is a case in point. Indonesia’s ambition for self-sufficiency in rice is built upon false assumptions: Self-sufficiency means food security (wrong - food security can be obtained without self-sufficiency); it will benefit the poor (wrong — most Indonesians, including poor farmers and landless people, are net consumers of rice); it is important to be self-sufficient as the world market is limited (wrong — the world rice market is now much larger and more stable than in the 1970s).

Some populist and protectionist fallacies can be debunked easily with data and economic reasoning. But it is perhaps far more complicated in the political sphere. This might be because economic nationalism pays politically, or the fact that the gains from globalization are diffuse and often take too long to materialize whereas the costs are concentrated and more quickly materialize.

As for the pragmatic Jokowi, he might rationally take the easy way, that is, to follow the bandwagon of populism. But he will be well advised not to, for the main beneficiaries are the rich; whereas the losers are poor consumers, mostly the wong cilik (working-class people) — the people he addressed the most in his campaign promises – who have to pay higher prices.
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The writer is one of the conveners of the “Indonesia Update 2017: Globalization, Nationalism, and Sovereignty – Indonesia in the New World,” at the Australian National University, Canberra, Sept. 15-16.