New Indonesia leader strikes harsher tone as he takes power

JAKARTA: Indonesia’s new leader Prabowo Subianto endeared himself to voters as a kindly grandfather vowing to give free meals to schoolchildren. Now to get things rolling in South-east Asia’s largest economy, the president is signaLling a strongman approach.

The former general used his maiden speech on Sunday (Oct 20) to rail against corruption and poverty, a stark departure from his soft-spoken predecessor Joko Widodo, popularly known as Jokowi. And as Prabowo led lawmakers in parliament to chant the Indonesian word for independence, he said: “Those who do not shout merdeka are not patriotic.”

This shows his style of leadership as an ex-special forces commando who is unafraid to call out allies and is likely to brook no dissent or criticism. Prabowo has set an ambitious 8% growth target for Indonesia in the next two to three years and that means turning around the manufacturing sector, fighting corruption and raising incomes in the world’s fourth most populous country.

“He is clearly learning from the early years of Jokowi’s first term when he did not get much done as he was a ‘minority’ president,” said Douglas Ramage, managing director at BowerGroupAsia Indonesia, a strategic advisory firm. “Prabowo’s focus is much more on political inclusivity at this stage.”

So far, markets are upbeat with the sense of continuity as Prabowo stacked his cabinet with several ministers from the previous administration. The Indonesian rupiah edged 0.2% higher to 15,435 per dollar in early trading on Monday, extending gains to a fourth day. The benchmark stock index rose a seventh day, the longest stretch in more than two years.

Here’s what to expect in Indonesia in the early days of Prabowo’s presidency:

Parliament Control

Prabowo is gunning for full control of parliament, a feat that hasn’t been achieved since the fall of his former father-in-law, the dictator Suharto. The missing piece is the largest party in parliament led by former president Megawati Soekarnoputri.

She didn’t attend Prabowo’s inauguration due to an illness and has yet to meet with the new president even though his allies have reelected her daughter Puan Maharani as the powerful parliament speaker.

Even without Megawati’s public backing, Prabowo has the majority support in parliament and can push through bills. The question is how Prabowo will react to any popular opposition to his policies given he has faced allegations of human rights abuses during his time as a military man in the dark days of the Suharto regime. He has repeatedly denied wrongdoing.

Corruption Fight

Prabowo acknowledged that graft was prevalent among businessmen and politicians and within local and central governments, saying it was keeping millions of Indonesians in poverty. About 9% of the over 280 million population still lives below the poverty line.

Indonesia’s track record for governance weakened during Widodo’s time. The nation was ranked 115th out of 180 countries in Transparency International’s corruption perceptions index last year, dropping several rungs since the former leader took power in 2014.

Critics say Indonesia’s slide is partly because Widodo brought the anti-corruption watchdog, known as the KPK, under his watch. They say Prabowo would need to make the KPK an independent agency if he is serious about combating graft.

Foreign Policy

Indonesia will continue to be “friends with all,” Prabowo said at his inauguration, which was attended by the US representative to the United Nations, Linda Thomas-Greenfield, and China’s Vice-President Han Zheng.

Prabowo, who speaks several languages including French and German and is more comfortable on the world stage than Widodo, will attend the Asia-Pacific Economic Cooperation forum in Peru next month and the Group of 20 summit in Brazil immediately after. He is likely to push for more investments from Beijing while keeping security ties with Washington.

He also reiterated that Indonesia backed Palestine’s fight for independence. “We are anti-oppression because we have been oppressed,” he said.

Food Security

The ex-special forces commander wants to reduce Indonesia’s reliance on food supplies from other countries amid heightened global tensions and weather uncertainties. A key reason: his free meals programme for school children will require billions of dollars of food when it kicks off next year and Indonesia remains a key importer of staples such as sugar, rice and beef.

Prabowo wants to see Indonesia achieve food self-sufficiency in four to five years. “We are even ready to become the world’s food barn,” he said.

Economists say it’s a far-fetched goal as farmlands shrink and even fewer Indonesians want to harvest crops. Next year, Prabowo has allocated a food security budget of around US$8 billion, which includes building storage facilities and carving out more rice fields. He also created a new coordinating ministry for food affairs, which will be helmed by Zulkifli Hasan, a former trade minister.

Downstreaming Push

Prabowo reiterated his plans to extend downstreaming – leveraging Indonesia’s mineral wealth to secure investment in industrial development – to cover more commodities beyond nickel. He said the policy will help achieve self-sufficiency and bring about more jobs.

The new leader wants to include other commodities such as sugar and palm oil, Bloomberg earlier reported, citing people familiar with the matter.

Former diplomat Rosan Perkasa Roeslani, newly appointed as investment and downstreaming minister, will lead Prabowo’s agenda. Speculation has also swirled that Prabowo’s brother and close adviser, Hashim Djojohadikusumo, could take a behind-the-scenes position to support the effort.

It will be tricky though for Indonesia to pursue a downstreaming campaign for all commodities, especially for those where the country is nowhere near as dominant as it is in nickel. – Bloomberg