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View all search resultsRestoring technocratic rationality and rule-based governance
We have entered an era of rhetorical abundance but institutional scarcity.
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A general view at the nickel smelter of PT Vale Indonesia in Sorowako, South Sulawesi, on Aug. 2, 2024. (AFP/Muchtamir Zaide)
W
e live in an era when crises no longer come and go in predictable cycles but arrive in overlapping waves, pandemics, wars, inflation, food and energy shocks, climate disasters and technological disruption. Former United Kingdom prime minister Gordon Brown, former top IMF executive and CEO of PIMCO Mohamed A. El-Erian and Economic Nobel Laureate Michael Spence, in Permacrisis: A Plan to Fix a Fractured World, describe this condition as the defining feature of our time: a world of permanent turbulence where volatility has become the new normal.
Yet, the book is not only about instability, it is about the erosion of rational governance. The authors argue that modern societies suffer from three interlinked failures. Growth that is neither inclusive nor sustainable, weak institutional and supply-side resilience and the collapse of credible governance at both national and global levels.
Nowhere is this global diagnosis more relevant than in Indonesia. The country has navigated one crisis after another with remarkable recovery each time. Yet beneath the resilience lies a deeper vulnerability. Each crisis leaves behind lessons unlearned and reforms half-finished. Indonesia’s version of a "permacrisis" is a state of chronic fragility where progress feels real but remains reversible, and policymaking is shaped more by slogans than by substance.
Yanuar Nugroho, in a series of Kompas essays, and my essay together with Monica Wihardja and Vivi Alatas in Bulletin Indonesian Economic Studies in August, have called this condition a “crisis of technocracy.” Policy debates, Yanuar argues, are now dominated by narratives rather than analysis, and decisions are guided more by political visibility than by institutional viability. Evidence has been displaced by rhetoric. The rational, data-driven policy culture that once defined Indonesia’s early technocratic generation has eroded.
Economic policymaking in Indonesia has become increasingly performative. It speaks in the language of ambition, industrial downstreaming, food sovereignty and green transformation, but often lacks analytical depth, institutional coordination and credible evaluation. In effect, we have entered an era of rhetorical abundance but institutional scarcity.
This matters because the erosion of technocratic reasoning weakens our capacity to manage complexity. Indonesia’s steady 5 percent growth hides persistent structural weaknesses. More than half of workers remain in informal, low-productivity jobs, rural incomes stagnate and interprovincial inequality persists despite decades of decentralization. Large firms and politically connected sectors capture most of the benefits of growth, while small and medium enterprises struggle to access finance, technology and skilled labor.
Economic expansion without inclusiveness breeds political resentment. Weak institutions invite populism, populism undermines credibility, and once credibility erodes, investment turns speculative. The result is a vicious cycle of short-termism, a domestic version of "permacrisis".
