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Jokowi forms broad Indonesia coalition, bringing in rival Prabowo

Nikkei Asian Review - October 23, 2019

Shotaro Tani, Jakarta – Indonesian President Joko "Jokowi" Widodo brought key opposition leaders into his new look cabinet on Wednesday, as he seeks political stability to push through difficult reforms and relocate the capital.

In his biggest move, Widodo named Prabowo Subianto, leader of the opposition Gerindra Party and his rival in April's bitterly fought presidential election, as defense minister. The former general initially said the election result was fraudulent and filed a last-minute appeal with the Constitutional Court. Protests by his supporters in Jakarta turned violent and led to several deaths.

Peter Mumford, director of Asia at Eurasia Group, wrote before the announcement that while many observers may see Subianto joining Widodo's cabinet as odd, the two rivals can both benefit from the move.

"Both sides have an incentive to bury the hatchet," Mumford said. "Jokowi hopes to build the largest coalition possible, and Gerindra wants to be in power, which could make it easier to rebuild the party's depleted coffers and position it for the 2024 presidential contest."

Widodo hopes that political stability will help him achieve his second term target of creating a skilled workforce and deregulating the country's economy to bolster Indonesia's flagging growth. The archipelago has maintained an expansion of around 5% since he took office in 2014, falling well short of the 7% target he outlined in the early days of his first term.

The president said the cabinet in "the next five years will focus on developing human resources, creating jobs, and empowering micro, small and medium enterprises."

The 38 ministers named Wednesday consisted of politicians from six parties, accounting for 74%, or 427 seats of the 575 seats in parliament, as well as professionals from outside politics. Notable appointments included:

  • Gojek founder Nadiem Makarim as education and culture minister. The tech entrepreneur will spearhead Widodo's push to create more skilled workers. "Gojek thrives on talent and if Indonesia is to produce more high quality talent, the country's educational system is going to have to undergo a transformation," Makarim said in an internal email to company employees.
  • Sri Mulyani Indrawati and Retno Marsudi will stay on as finance and foreign ministers, respectively.
  • Mohammad Mahfud, commonly known as Mahfud MD, who was once under consideration by Widodo as a running mate, took the security chief post from Wiranto, who was recently hospitalized after an attack by Islamic State sympathizers.
  • Luhut Panjaitan will stay on as the coordinating minister for maritime affairs, but will also be in charge of overseeing all things related to investment.
  • Erick Thohir, former chairman of the 2018 Asian Games Organizing Committee and the president's presidential campaign team leader, will be the minister for state-owned enterprises.

"Political stability is the most important and I believe that's what [Widodo's] after, especially with [Subianto's] Gerindra joining the coalition," said Hasanuddin Ali, CEO of Alvara Strategic Research.

The coalition is "basically to weaken critics of the government. But this is unfortunate because good democracy requires strong opposition as a check and balance."

Helmi Arman, an economist at Citi Indonesia, said the coalition could mean that unpopular legislative reforms such as revision of labor laws would have a much higher chance of passing.

"Risks to social stability could also be kept in check in the near term," he said. "That said, the implication toward governance and regulatory certainty – which is important for FDI – is less clear. This is in light of possibly a higher number of interest groups in the cabinet."

However, the coalition could also prove to be a hindrance for Widodo before the next presidential election in 2024, warned Ali of Alvara Strategic Research.

"There will be challenge toward 2024 where the parties in coalition will have interest to campaign for their own [interests]," he said. "I predict the effective work period of the government will only be around 3 years; the last 2 years there will be frictions among the cabinet or coalition parties. Jokowi must have strong leadership to assure the working phase [of the government] can remain effective until 2024."

Ubaidilah Badrun, a political professor at the State University of Jakarta, also warned that having Subianto – who has been accused of human rights violations by groups in the West – could also be a problem.

"Surely [foreign countries will have concern]" over Subianto's appointment, he said. "Jokowi is being counterproductive by wanting to have good relationship with other countries and invite more investment, but on the other hand democracy is being repressed and has chosen another human rights violator on the cabinet."

"Hiring a high level human rights violator will give the international community more doubts about Indonesia."

[Additional reporting by Ismi Damayanti in Jakarta.]

Source: https://asia.nikkei.com/Politics/Jokowi-forms-broad-Indonesia-coalition-bringing-in-rival-Prabowo