Indonesia’s election gives way to foreign policy challenges
After winning a bitterly contested election, Indonesia’s new president faces domestic opposition and competing pressures from the United States and China.
In a nutshell
- Indonesia’s incoming president will be squeezed between China and the U.S.
- Prabowo Subianto also faces economic and domestic political headwinds
- Indonesia will likely seek to avoid picking sides between the major powers
Indonesians took to the polls in February in the biggest single-day election in the world and installed the administration of Prabowo Subianto. The newly elected president will face tough diplomatic choices, including around rising tensions in the disputed South China Sea and the intensifying rivalry between China and the United States, two of its critical partners.
At home, voting in the 270-million-strong democracy did not pass without challenges. The declared winner officially received over 58 percent of the votes cast. Mr. Prabowo, a former army general, was a two-time contender in previous presidential elections. He lost both times to Joko Widodo, popularly known as Jokowi, before then joining the victor’s cabinet as defense minister. In the earlier elections, he portrayed himself as a nationalist and a strong leader, even as some questioned his temperament.
Mr. Prabowo’s image has subsequently shifted to one of a more benign and “grandfatherly” figure, to the extent that his dance moves have taken off on social media. The contrast from his 2014 and 2019 campaigns seemed to allay some voters’ concerns about his human rights record. Some groups have charged Mr. Prabowo, who until recently was banned from entering the U.S., with human rights violations while serving as a special forces commander in the Suharto era; Mr. Prabowo has denied the allegations.
Ahead of this year’s election, Jokowi was initially thought to support Ganjar Pranowo, a former Central Java governor who also is considered a modest and engaging pluralist, and who comes from Jokowi’s erstwhile ruling Democratic Party of Struggle (PDIP). These were thought to be ideal characteristics to win over the Indonesian public. According to a 2023 survey, however, of the 81 percent of Indonesians satisfied with Jokowi’s performance as president, support for his potential successors was divided between Mr. Ganjar (at around 40 percent) and Mr. Prabowo (30 percent).
Jokowi eventually threw his support behind his former rival Mr. Prabowo, while the president’s eldest son Gibran (the mayor of Solo in Central Java) was picked as a running mate. The Prabowo-Gibran administration is expected to continue Jokowi’s signature mission not yet accomplished: the construction of the new capital city, Nusantara, in East Kalimantan. Indeed, Mr. Prabowo has made no secret of his intention to maintain Jokowi’s policies as head of state.
Democratic backsliding
The election’s two other contenders decided to challenge the result at the Constitutional Court, citing widespread irregularities. The candidates also challenged the inclusion of the 36-year-old Mr. Gibran on Mr. Prabowo’s ticket, citing a requirement that vice presidents be at least 40 years old. In order to run, Mr. Gibran had benefitted from a last-minute carve-out by the constitutional court. The court’s chief justice (who happens to be Jokowi’s brother-in-law) was later removed by an ethics panel for the decision, but the verdict was deemed binding regardless.
Additionally, in the run-up to the election, the government disbursed a hefty amount of social aid, some $30 billion – almost equal to the funds made available during the COVID-19 pandemic and 12 percent higher than last year’s social aid figures.
On April 22, the constitutional court sealed the victory for Mr. Prabowo, rejecting the petitioners’ appeal and ruling there was no evidence of fraud or state intervention that materially shifted the result. The court also found no evidence that Jokowi and his administration bent the laws to support Mr. Prabowo.
The dynamics during the campaign season, however, point to democratic backsliding. The rising popularity of Mr. Prabowo is seen as rooted in Jokowi’s support, since the latter – the first president from outside the Jakarta elite – remains widely popular in the country but could not run for a third term. Some have argued that appointing Jokowi’s eldest son as vice president will continue his father’s rule by proxy, but this will depend on how Mr. Prabowo, 72 years old, shapes his deputy’s role.
Another lingering question is how the corruption that remains rampant in the country will affect potential foreign investment. So far, the newly elected administration has yet to offer plans to tackle the issue. According to Transparency International’s 2023 Corruption Perceptions Index (CPI), Indonesia’s index score remains unchanged at 34, leaving the country ranked 115th globally, five spots worse than the previous year. Corruption will likely pose additional challenges for foreign investors to pursue large-scale opportunities.
Geopolitical balancing act
Amid increased tensions in the hydrocarbon-rich South China Sea, Indonesia’s elections have been closely watched by both the U.S. and China. The latter has engaged in aggressive behavior in the region, particularly against the Philippines. Indonesia’s new leader can be expected to maintain a focus on sustaining economic growth, suggesting that friendly relations with both Washington and Beijing will be of paramount importance.
In recent months, the U.S. has been increasing diplomatic activities and engaging in joint military exercises with its allies in Southeast Asia, including Indonesia. But various challenges for ties with Washington loom for the new government in Jakarta.
While officials there indicate a desire to engage in more military cooperation with the U.S., the fallout from Hamas’s 2023 attack on Israel may affect the relationship. Indonesia has expressed strong support for the Palestinian cause, most recently thanking Spain, Norway and Ireland for extending formal recognition to the state of Palestine. The government also made appeals to European countries for a permanent ceasefire between Israel and Hamas during a ministerial meeting in Brussels. The ongoing war in Gaza, as well as the Biden administration’s continued (if qualified) support for Israel, may cast a pall over relations with Indonesia.
At the same time, concerns in Indonesia remain about aggressive Chinese behavior, as highlighted by an incident in March between China and the Philippines at the Second Thomas Shoal, a submerged reef within the Spratly Islands. Beijing asserts sovereignty in the area despite a 2016 finding by a United Nations Convention on the Law and Sea tribunal that its claims lacked legal merit. While Sino-Indonesian relations are on good terms for now, tensions around disputes in the South China Sea may arise again. One such flashpoint could be competing Chinese and Indonesian claims in the gas-rich Natuna Sea area.
Scenarios
More likely: Balancing ties between the U.S. and China
In the past, Jokowi was able to deliver significant Chinese investments, including $11.5 billion from one of the world’s largest glass makers to build a manufacturing plant in the country and a deal for the already popular $7.3 billion high-speed railway, which connects Jakarta and the capital of West Java, cutting commutes from four hours to forty minutes. Not surprisingly, Mr. Prabowo paid a visit to China soon after the election, a sign that the bilateral relationship will remain robust.
Indonesia will not likely seek to pick sides or formally align with either major power. Mr. Prabowo will likely continue the popular policies of Jokowi, as he vowed to do during the campaign. His predecessor, known to avoid openly criticizing either Washington or Beijing, managed to balance defense cooperation with the former and foreign investment with the latter.
Less likely: Greater cooperation with American efforts to counter China
Despite ongoing commitments with Washington on military cooperation, and unlike with the Philippines, it remains doubtful that Indonesia will host an American military base in the country. Under successive governments, Indonesia has maintained a free and active foreign policy, non-aligned with any major powers, and supports the centrality of the Association of Southeast Asian Nations (ASEAN) amid the great power rivalry.
To be sure, Mr. Prabowo’s past stances have painted a different picture. In 2019, he was very critical of Chinese investment in Indonesia, saying at the time he would review such transactions if elected and strongly opposed foreign influence. Yet his posture changed after joining Jokowi’s administration as defense minister. For example, his response to the presence of Chinese fishing vessels in Indonesia’s exclusive economic zone in the North Natuna Sea, a clear issue of sovereignty, was seen as rather mild.
Mr. Prabowo will not be sworn into office before October, and his cabinet appointments will play an important role in the direction of policy. Indonesia’s place in ASEAN will indirectly affect its approach in the South China Sea as well as relations more generally with both the U.S. and China. Whether Jokowi’s foreign policy will carry over depends on the new president’s commitment to following through on his campaign promises.
For industry-specific scenarios and bespoke geopolitical intelligence, contact us and we will provide you with more information about our advisory services.
Sign up for our newsletter
Receive insights from our experts every week in your inbox.
