Indonesia in 2015

For Indonesia, 2015 has been a year of tremendous fluctuations on the political front as President Joko Widodo (Jokowi) has been seeking to find his political feet, as well as on the economic front, as the country experienced the worst currency devaluation since 1998, and a dramatic turnaround in economic policy in the second half of the year. Foreign policy was not without its own drama, featuring among other things the drawn out and sensationalized execution of eight foreign drug offenders, and a U.S. state visit. Finally, in 2015 Indonesia was responsible for the worst “haze” in eighteen years, choking the region for several months and causing approximately US$34 billion in damage.

This chapter will review the highlights of the year in Indonesia, focusing on four areas — political highlights, institutional reform, the economy, and foreign policy. It will conclude with a brief section on Jokowi’s leadership style and the country’s future outlook.

Political Highlights: Jokowi’s First-Year Performance

The biggest political story of the year by far is the story of Joko Widodo’s first year as President of Indonesia. Elected in October 2014, he came into the presidency riding a tide of euphoria and expectation for reform somewhat reminiscent of the delirium that greeted President Obama in the United States in 2009. And, also similarly, these high expectations were quickly dashed, as political manoeuvres in the first months of his presidency meant that he faced an opposition-controlled House of Representatives (DPR) and a Cabinet reflecting the political strength of his “patron”, PDI-P head Megawati Soekarnoputri, his Vice President Jusuf Kalla, and National Democrats (NasDem) party chair Surya Paloh. During the past year Jokowi has had to manoeuvre politically between the interests of these party allies (who did not always act like allies) and multiple teams of advisors who had been with him since his gubernatorial days.

In early January 2015, only three months after becoming President, Jokowi took the bold move of abolishing fuel subsidies — an act which no president before him had been able to do. This gave the administration an additional 200 trillion rupiah (roughly US$16 billion) to spend on infrastructure and service delivery. Effective socialization of his plans to use these funds to support health and education programmes for the poor (credible claims given his track record of launching the Smart Jakarta Card and Healthy Jakarta Card programmes for the poor while governor of Jakarta) plus a lucky break in the fact that world oil prices were at a deep low at the time, meant that this act, which could have been political suicide, ended up (barely) on the positive side of the balance sheet for Jokowi.

However, rather than moving decisively forward with a reform agenda, Jokowi found himself ensconced in a deep political battle between the national police and the Corruption Eradication Commission (KPK). In early January Jokowi nominated Comr. Gen. Budi Gunawan, known to be a close friend of Megawati, as the national police chief. Two days later the KPK announced that Gunawan was a prime suspect in a graft case. The DPR confirmed his nomination and, shortly after, the police arrested vice-chair of the KPK, Bambang Widjojanto, on a charge of tampering with a local election. After a few more twists and turns and weeks of building public protest against Gunawan’s nomination, Jokowi finally announced in February that he would drop his nomination of Gunawan, naming instead Comr. Gen. Badrodin Haiti as Chief of Police. What some characterize as a “proxy war” between forces for and against reform had been at best a stalemate, with the KPK weakened and the police force divided.

This dramatic tug of war characterized much of the political scene throughout 2015. Golkar, one of the nation’s oldest and most established political parties, was riven by internal conflict throughout most of the year, with Abu Rizal Bakrie vying with Agung Laksono for the chairmanship — a conflict that only began to reach resolution towards the end of 2015 with a Supreme Court decision that recognized Bakrie’s leadership. The two leaders then called a truce, though getting the party...