Golden Indonesia 2045 Vision - a Generation of Stars

Written by Mark Daniel Worang (MSc ISPP Development)

Throughout the 2024 period about 74 election cycles were held globally signifying major policy changes worldwide. Among the shifting pendulum of the political spectrum swinging left and right, excluding—authoritarian, monarchy or oligarchic states—Indonesia have experienced a genuinely peaceful government transition as the world's third largest democracy. With the son of the 7th President Joko Widodo joining the 8th President Prabowo Subianto as his deputy, Indonesia has symbolized continuity with its overall development strategy in particular. Jokowi has been regarded as the nation's infrastructure czar, with the help of his prime minister, Luhut Binsar Pandjaitan, whom have pioneered breakthroughs—namely Whoosh; the Southeast Asian region's and nation's first high speed railway, public toll roads and strategic bridges—across rural Indonesia to level the playing field after years of heavily centralised development in the Java island. Marking a regime change in late 2024, Prabowo have pledged to align some of the country's visions with his predecessor's, one of the telltale signs of this commitment have been to accommodate 17 of Jokowi's cabinet ministers as part of his office. This was done to reciprocate an array of operations months prior to Jokowi’s term end, whereby Prabowo’s nephew joined the Finance ministry interning along with other partisan cadres in secondment, as part of a cabinet reshuffle. Considering these manoeuvres, upward social mobility is viewed as the next step of Indonesia's development aspirations after establishing strong foundations in infrastructure. One of the ways Prabowo claims to manifest higher quality in human capital is to secure free school meals for children under 5 and pregnant women. This analysis will highlight the ways that Indonesia articulates its path towards development in 2045. Starting with multilateral engagements, it begins examining some of the opportunities the recent BRICS membership appointment Indonesia possess, as well as its accession into the OECD.

Between & Bretwixt: BRICS or OECD

During the first 100 days of Prabowo's tenure, Indonesia's appointment as a BRICS member can be considered as one of the quick wins of the new administration. This has significantly uplifted the country's standing in the global stage and its approach to foreign policy. Juxtaposing Jokowi's previous stance to Prabowo's current presence in the international level may offer insights to this dynamic change. Although Jokowi began as a carpenter doing business in Europe, his English capabilities were critiqued by neighbouring countries such as Singapore. The inadequacy was reflected through his absence from United Nations General Assemblies spanning 10 years. Attendance have only been salvaged by hosting his own annual events in Indonesia including G20 and ASEAN summits. On the other hand, Prabowo provides an upgrade, coming from a technocratic family background from prominent economists to bankers. Afforded with military experience with multiple secondments in crisis and faced with exile has equipped him with resilience gleaning polyglot capabilities mirroring the founding President of Indonesia Soekarno. Leading the country forward with boldness, Prabowo offers the country an optimistic business model forgetting its past shortcomings, emancipating itself from international isolation and self-ostracism. As a case in point, his global tour started in Peru attending the APEC meeting, nurturing relationships with regional partners, joining the G-20 hosted by Brazil which allowed re-kindling of past commitments and being a debutante invite to the G7 summit opening new doors to the concentration of world superpowers. Initiating strong positions from his tour ending in Egypt with the D8-summit, Prabowo convicted Muslim leaders of competing with each other, making false promises towards cooperation while tensions in the MENA region boils. Setting precedents for diplomacy, he returned with positive optics garnering investment and attaining an 81% approval rating from the public. Additionally, positing this Realpolitik approach appearing in conferences and boosting the nation's profile have offered flexibility among international critics whom label third way countries as deviant such as former definitions of second world communist states.

Paradoxically, joining BRICS can be misaligned with the more common Eurocentric narratives of development. The ideological underpinnings of the intergovernmental organization focus on the provision of alternative financial institutions and actors from the global hegemony—World Bank, International Monetary Fund and World Trade Organization—to alleviate the reliance on former colonial powers. A primary emphasis of the bloc is to delink and dethrone the dollar as the currency of exchange. In comparison, BRICS represents 35% of the world’s GDP (PPP) to the G7’s 30% who are considered as global superpowers. Having been promoted from partner country to a full member, Indonesia provides anecdotal lessons to its regional counterparts such as Vietnam, Malaysia and Thailand as a first mover. Historically, the Bandung conference in 1955 spearheaded by one of Indonesia’s founding father Soekarno was a notable aspect of the Non-Aligned Movement (NAM). Continuing this thread of neutrality and consolidating the nation’s historical connection with NAM is a crucial dimension of Prabowo’s ‘good neighbour’ policy. A big part of Indonesia’s unique worldview is its ability to trade with any nation, including Israel, despite any political differences. Then again, BRICS have not had significant strides in their primary objective to create alternative forms of exchanges to SWIFT payments. The recent membership may only be a move by Indonesia to appease trading partners within the bloc such as China and potentially Russia with its marginally better oil price. Risk management is a top priority for many countries and Prabowo have demonstrated this as the trajectory of a multipolar world is clearly apparent. With this in mind, joining the bloc can be seen as a balancing act to receive the mutual benefits of collective collaboration in both Eastern and Western hemispheres.

Moving forward to the OECD, Indonesia have been recognized as a partner country of the organization since 2007. Plans of accession are in place to mark its 20 years of anniversary, including Indonesia as a member in two to three years just in time for 2027. Known as the rich countries club, the OECD will consider Indonesia as the first country from the SEA region for membership. Many experts have stated that conflicting values between BRICS and OECD would be problematic viewing two options as crossroad to choose from. As a middle power, Indonesia would have to make major policy decisions to be included, such as its stance on Israel and unpopular fiscal tax recommendation that may stir the populace. However, valuable opportunities would be accessible—being a bridging voice for developing countries, access to more competitive markets and policy prescriptions—outweighing some of the early hurdles entailed. Provided that Prabowo is targeting 8% annual economic growth by 2028, the short-term positive economic impact of the OECD brings an appealing prospect to this goal. While being a member of BRICS gives the vision of changing the status quo, conforming to OECD ideals potentially creates advances to technological transfers necessary for Indonesia’s resource-based industrialization.

Self-sufficiency pipelines or a pipe dream?

Natural resource independence is an axiom Indonesia and post-colonial states declare as a sustainable strategy to validate genuine win-win partnerships and mitigate neo-colonial influences. Unentangling the economic histories clouding the nation have assisted in identifying its full potential. Through iteration, the blueprint behind Prabowo’s current cabinet is partly genetically ingrained by his father Sumitro Djojohadikusumo. Amid Soekarno’s rise, forming geopolitical influence in the mid 1950s mentioned in the above section, a backdrop to his downfall was in the making. Known for leading the Berkeley Mafia, Sumitro influenced a clandestine operation that formed the bedrock of the Indonesian economy. Simultaneously, red scare tactics manufactured by the CIA led to an assemblage of issues including a massacre and economic downturn which ended Soekarno’s reign. Whilst the country navigates a coup to form the New Order in 1965 by successor, Suharto, Sumitro’s boys returned from California to enrol in military school, timely equipped with knowledge to shape the nation’s policies. An emphasis on—low inflation, deregulation and State- Owned Enterprises—guided the country towards a period of prosperity in the late 1960s. Dissimilar to Chile's prescribed neoliberal economic policies, but emblematic to the group is the Chicago Boys, a group of Chilean economists funded by the CIA that influenced the country’s destabilization during the Pinochet dictatorship. Drawing from development economics principles, Latin American Import Substitution Industrialization caused an unsustained surge in rapid growth that declined in the 1980s. Unlike the export led growth peaking until the 1990s of the East Asian Tigers—Taiwan, South Korea, Hong Kong and Singapore—deemed successful in their endeavours which Indonesia attempts to mirror as a late bloomer. Weaving into the tapestry of Indonesia's Prabowo is a talent for statecraft uniting a coalition of past voices. In the post-Suharto Reformasi era, he is aware that there are no permanent alliances only permanent interests to uphold and prevent division.

Final Recommendations

Despite a codified system in place to pursue development, some of Indonesia’s shortcomings are found in a lacuna of talent in key sectors. A shortage of doctors within the urban and rural areas have contributed to problems during public health crises, fuelled by brain drain policies preventing foreign medical graduates to practice in the country. Its lack of effective diaspora in contrast to countries like Philippines, Lebanon or Brazil have also affected social attitudes towards migration. The country has not had significant strides in creating a positive ecosystem for foreigners since launching its Golden Visa. Therefore, long-term social change would be necessary to improve cultural attitudes towards issues such as miscegenation to attract more diversity. With its young population growth slowing down by 2041, Indonesia is running out of time to capitalize on its demographic bonus to prevent its demise in the middle-income trap.