For the next 5 years, the number 1 priority for Jokowi administration will be in building a different type of infrastructure – laying the foundation to ensure PDI-P and its allies’ continual dominance in the years post-Jokowi.

Even then, that is not necessarily an economically detrimental move as we have learnt in many far more developed countries that economic power and political power are often not “either-or” exclusive spheres of influence. Continual political stability is highly positive for economic development.

While US and some major economies yielded to populist pressures and adopted protectionist stance in global trade, we have China on the other end of the spectrum, embracing globalization and opening up its markets. But we have to recognise that Indonesia is on a different landscape and therefore framing its policies as populist or protectionist or business-friendly would be inadequate.  

Now, the question then is what would be the guiding principle for Jokowi’s next 5 year economic plan? 5ish% GDP growth has probably been inadequate and partially been voiced by large opposition voters. Therefore, tweaks and an updated Jokonomics 2.0 are needed. Here are my 5 proposed tweaks (or maybe as some may call it Indonesian People First policy) –

In the 1st term, President Jokowi’s team focused on major infrastructure and fiscal stimulus to drive economic activities. Anyone in the infrastructure sector would know that these “PPPPPPPPPP” projects required the mobilization of huge political capital involving far too many stakeholders. But Jokowi’s team has shown they can get the job done and are able to get them going. Therefore the 1st action point would be to accelerate the closing of these infrastructure deals.   

2nd action point which I consider the most important of my proposed 5 pillars – while infrastructure projects grab frontpage headlines, policies that facilitate trickled-down economics need to be put in place. As we have seen, infrastructure projects have long gestation period and their benefits are not fully realised or felt until long after Jokowi’s term end. But the average Indonesian cannot wait till then, the people need food and jobs today and the country’s growth needs to be felt evenly distributed to the masses. Moreover, in the last term, as it pushed through the Tax Amnesty Bill hurriedly, its blanked approach can only be best described as opportunistic. Therefore, tweaks are needed and policies that favour local SMEs growth and entrepreneurship, such as tax cuts and deregulation targeting SMEs and key technological start-ups should be adopted.

3rd and 4th action point – In trade war environment, Indonesia needs maintain its relevance to on the global stage by boosting its export competitiveness. That can be done by increasing productivity through 3. pro-technologies adoption policies such as Industry 4.0. Smart automated manufacturing does not necessarily mean massive job losses. As long as technologies can give “Made-in-Indonesia” products an edge (whether in terms of costs or quality), they should be welcomed. And then the focus is on getting the Indonesian worker trained on operating such technologies and the Indonesian worker will be producing for not just a 260 million market but 7 billion people.

This then brings us to my 4th proposed point – An effective manpower policy. At present, foreign workers with specialised technical skills are welcomed. However, that alone will not solve the crux of Indoneisa’s productivity problem. To increase productivity, foreign managers are needed to drive higher work ethics. Further, a complete overhaul of the training and education system is needed.  

Lastly, my 5th proposed point would be for Indonesia to have less reliance on oil & gas imports for energy needs. This will reduce its trade deficit and in turn shore up the Rupiah. Given that renewables are fast catching up with oil & gas in terms of energy efficiency and costs, it is clear Indonesia should adopt renewables at a much faster pace.