Indonesian businesses seek to ensure post-election continuity

Keen to ensure a degree of predictability, Indonesian Employers Association has devised its road map to serve as reference for the candidates to figure out what businesses believe furthers the country’s continued economic development.

Deni Ghifari

Deni Ghifari

The Jakarta Post


File photo of Jakarta, Indonesia. PHOTO: THE JAKARTA POST

October 27, 2023

JAKARTA – In a bid to prevent unpleasant surprises, business groups have proposed road maps to be adopted by all presidential candidates participating in next year’s general election.

Indonesian Employers Association (Apindo) chairwoman Shinta Kamdani claimed that all three candidate pairs pursued the same goal of elevating the country to the status of a developed economy by 2045.

“Whoever wins, that is [going to be] the direction,” Shinta told reporters on Tuesday at the 11th US-Indonesia Investment Summit in Jakarta, expressing confidence that any of the three presidential candidates would continue down the road paved by President Joko “Jokowi” Widodo.

Indonesia often draws flak for what investors see as a lack of regulatory consistency as policies frequently change when a new administration takes the reins in Jakarta. Businesses typically favor continuity in the legal framework to ensure that their operations continue smoothly throughout political transitions.

What businesses needed to focus on, Shinta said, was how much of an overhaul would take place, since some policy changes were inevitable.

Keen to ensure a degree of predictability, Apindo has devised its road map to serve as reference for the candidates to figure out what businesses believe furthers the country’s continued economic development.

Similarly, the Indonesian Chamber of Commerce and Industry (Kadin) said it, too, had created a road map that the candidates would use as a reference to ensure continuity in the transition from the current to the future administration.

“I believe that every candidate has the same vision. The only difference lies in execution. […] Policy consistency is the most important thing; that’s what matters,” Kadin vice chairman Bernardino Vega told The Jakarta Post on Tuesday on the sidelines of the same summit.

The text of Kadin’s road map is kept general enough to leave significant room for interpretation, however. One of the points highlighted in the document published online is the pursuit of “prosperity” through pushing the development of “strategic manufacturing”, financial services and accelerating the growth of micro, small and medium enterprises (MSMEs).

Douglas Ramage, chairman of the board of governors of the American Chamber of Commerce in Indonesia (AmCham), told the Post that the organization was “very positive” about Indonesia continuing to ensure a supportive investment climate.

“[AmCham] believes efforts to improve Indonesia’s competitiveness will continue for the coming years, regardless of the outcome of the election next year,” said Ramage on Tuesday at the same investment summit.

Indonesia’s business landscape has undergone wide structural reforms during Jokowi’s reign through omnibus laws like the Job Creation Law aimed at making investing and conducting business in the country more convenient.

World Bank Indonesia and Timor Leste country director Satu Kahkonen said such reforms had turned Indonesia into “a bright spot in the world”.

“But, as I said, there is a deal of much more work to be done in many areas,” Kahkonen told reporters on Tuesday.

“I hope that [whoever] becomes the next president of Indonesia will continue on the reform path, so basically continuing on the path set out over the past 10 years, and further deepening and accelerating that. If there’s a will, there’s a way,” she added.

However, Kahkonen said, that did not mean the next president would have to follow in Jokowi’s footsteps, as he should chart his own course, but she recommended not eroding what had been implemented.

Read also: RI marginalized in global value chains, in need of trade reforms: World Bank

Expressing a more skeptical opinion, Center of Economic and Law Studies (CELIOS) executive director Bhima Yudhistira said whether the winning candidate would undertake any further reforms in his term was a “transactional” matter and would depend on the political constellation.

“For structural reforms, I think it will depend on who’s funding [the president] or the businesspeople behind every candidate,” Bhima told the Post on Wednesday.

He said the elected president would consider reform when it suited the interests of the businesses behind him, and time was an important consideration, given that executing reform [plans] might exceed a president’s term.

Bhima claimed the candidate pair of Prabowo Subianto and his running mate Gibran Rakabuming Raka was the most likely one to follow in Jokowi’s footsteps, given that Gibran was the incumbent’s eldest son.

Read also: BREAKING: Prabowo names Gibran his running mate

However, he pointed out that businesses did not have to fear a complete overhaul of the business environment, given that even Anies Baswedan, the candidate Bhima said promised most change, was more about modifying Jokowi’s programs rather than seeking fundamental changes.

Unsurprisingly, all three candidates have verbally committed themselves to eradicating corruption.

Ganjar Pranowo said on Tuesday that Indonesia needed to bring down its incremental capital-output ratio (ICOR) by increasing efficiency and cracking down on corruption.

Meanwhile, on top of addressing corruption, Anies emphasized on Tuesday that he would continue the practice of the past few decades to give economic cabinet positions to people from technocratic backgrounds.

“And that’s a commitment we all hold onto as presidential candidates,” Anies said, claiming to also speak for his two rivals. Like Ganjar, he made his remarks at the same US-Indonesia investment summit.

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