You’d have to have been living under a rock somewhere not to be aware that Indonesia is scheduled to hold general elections on 14th February.
But what might not be so clear is that a President, Vice President, the People’s Consultative Assembly (MPR), the House of Representatives (DPR), and the Senate (DPD) as well as provincial, regional, and city legislative bodies will all be elected. The Brookings Institute claims this will cover some 245,000 candidates running for 20,000 positions, and as such is “the world’s largest and most complex single-day election in the democratic world.” That’s impressive.
In the past, elections in Indonesia have been seen as times of instability. A time to wait and see, especially for business investors, just in case things go pear-shaped and the country descends into chaos. But this year is different. Antara News and Invest Indonesia have been reporting on comments made by Susiwijono Moegiarso, Indonesia’s Secretary of the Coordinating Ministry for Economic Affairs, who said recently that the 2024 elections will act as a positive impetus for Indonesia’s economic progress, which has managed to record eight consecutive quarters of growth resulting in inflation far lower than the average in developing countries.
But why, especially if you look at what’s happening in the USA in the run-up to its general elections in November, where division and personality politics seem to have taken centre stage and if the baton changes hands, a shift in policy is very likely to happen and result in confusion both at home and abroad. One step forward, two steps back.
To provide some insights into this, it’s worth looking at a recent SpeakUp Monday podcast published on YouTube and organised by Robert Ian Bonnik, a leading growth strategist and founder of RiB Associates who was speaking with Terje H. Nilsen, CEO of Seven Stones Indonesia, discussing how important it is to have an awareness of Indonesian history and the country’s geopolitical viewpoint to plan your growth and empower your business, because a little understanding can go an awfully long way.
From Colony to Pancasila
There’s no question that Indonesia’s journey to independence shaped its geopolitical stance and continues to do so to this day. The government of the Netherlands ruled the colony from 1816 to 1941, followed by a Japanese occupation that lasted until 1945. But it was the Dutch colonial legacy that instilled a deep yearning for self-determination, and that’s reflected in the nation’s first recognised president, Soekarno’s, pursuit of a neutral “independent and active” foreign policy.
Pancasila, Indonesia’s founding ideology, reflects this and emphasises social justice and anti-colonialism, to build a just and prosperous society for all Indonesians, further reinforcing the desire for autonomy and balance. This historical context is crucial to understanding Indonesia’s continued emphasis on non-alignment and peace-making in today’s uncertain world, as well as aspects of the country’s constitution and legal framework, particularly those laws around land and property ownership.
Leadership Shifts and Economic Reforms
A 1965 coup ousted Soekarno and replaced him with the more Western-oriented Suharto. Some argue the CIA was very much involved in the event as Indonesia’s growing dominance in the region, particularly with so-called Non-Aligned nations, was perceived as a threat to the unipolar view of the world, but conspiracies aside, the change did usher in a period of economic growth. It also brought with it heavy-handed authoritarian rule; “democratic dictatorship” was a phrase often bandied about in those days. Suharto’s pro-Western approach indeed attracted foreign investment, laying the groundwork for Indonesia’s economic emergence, however, the “Berkeley Mafia” as it was commonly referred to – Indonesian economists educated in the US – faced increasing discontent amidst rising inequality and political repression. These factors eventually culminated in the Reformasi movement of 1998, leading to Suharto’s demise and a new era of democratic reforms.
Moving towards a Golden Indonesia
Four presidents followed; B.J. Habibe, who was the sitting Vice President when Suharto stepped down; Abdurrahman Wahid, informally referred to as Gus Dur, who was a long-time leader within the Muslim Nahdlatul Ulama (NU) organisation and nominated by the MPR to become president; Megawati Soekarnoputri, the daughter of Soekarno and vice president under Gus Dur; and Susilo Bambang Yudhoyono(SBY) a high-ranking military commander under Suharto and the first leader to be democratically elected.
Then came Joko Widodo, commonly referred to as Jokowi, who was the first president not to have come from Indonesia’s political or military elite. He was a carpenter and furniture exporter before becoming mayor of Surakarta and then served as governor of Jakarta before being elected president. In power since 2014, he has championed the vision of a “Golden Indonesia,” aiming for enhanced economic prosperity for all Indonesians and global competitiveness.
This vision has translated into significant infrastructural progress and legal reforms, including the recently passed Omnibus Law, designed to simplify bureaucracy and attract more foreign investment. There have been challenges, however, in effectively communicating and implementing these changes, especially in the provinces, emphasising the need for careful navigation of an evolving legal landscape. But without a doubt, the path forward has been set.
Beyond Bureaucracy – Understanding Cultural Nuances
While legal frameworks are important, finding your way around Indonesia’s business landscape requires cultural understanding, where harmony, compromise, and consensus are paramount. The concepts of “Bhinneka Tunggal Ika” (Unity in Diversity) and “Gotong Royong” (Mutual Cooperation) highlight the importance of respecting differences and collaborative problem-solving. Understanding these values will allow you to engage constructively with your Indonesian counterparts, building trust and long-term partnerships.
Indonesia has an inherent tendency towards pragmatism and avoiding conflict, suggesting a continued focus on stability and continued economic growth, regardless of who wins in February. It wouldn’t be a surprise, for example, to find the winning team appointing members of the opposition to important cabinet positions to maintain this balance. The new capital city of Nusantara (IKN) is a good example of this and a symbol of the Indonesian approach. Jokowi kick-started it, but he won’t be in power when it’s completed. But he’s sown the seeds for future generations to enjoy the fruits of progress and prosperity.
And when you consider that the 2024 elections will involve more than 200 million eligible voters, over half of whom are either millennials or Gen Z, you can begin to understand how relevant those historical roots of harmony, unity, community, and independence really are for the country’s youth.
Yes, it’s different from where you’re from, but being aware of these nuances is important if you want to be successful here. As the world’s fourth most populous nation with around 280 million people, Indonesia is home to a vibrant tapestry of cultures and languages and as such, presents a unique landscape for foreign entrepreneurs. By respecting Indonesia’s desire for non-alignment, understanding its diverse cultural values, and adapting to its evolving political and economic landscape, foreign entrepreneurs can forge positive partnerships and contribute to the nation’s vision of a “Golden Indonesia” which will continue through many elections cycles, regardless of who “wins” or “loses”.
If you’d like more insights about Indonesia and how to make your business grow, get in touch with Seven Stones Indonesia via [email protected].