The Economist has outlined 5 key reasons indicating that the upcoming elections in Indonesia are of greater importance than the world realizes. The magazine highlights that Indonesia possesses all the components to become one of the most influential countries in Asia. However, the current President, Joko Widodo, has long adhered to traditions of non-alignment in foreign policy and closed-off policies domestically.
The magazine explained that the third-largest democracy in the world will vote on February 14 to choose a new leader. According to opinion polls, the favored candidate is the former general Prabowo Subianto, despite his concerning human rights record, while the other candidates, Anies Baswedan and Ganjar Pranowo, lag behind.
- First: The Space
The magazine presented 4 charts and a map to illustrate the vast potential of the country, starting with Indonesia’s immense size. If a map of the sprawling archipelago were placed over Eurasia, it would stretch from Ireland to Turkmenistan, with its population spread across thousands of islands rich in farms and factories. Indonesia’s geographically challenging landscape has fostered the growth of digital services, with Jakarta becoming one of the most successful hubs for new technology companies in Southeast Asia. Nearly four-fifths of Indonesians own smartphones, connecting the country in unprecedented ways.
- Second: Infrastructure and Population Composition
Jokowi, as the current president is known, has built dozens of airports, ports, dams, and hundreds of kilometers of tolled roads, earning him the nickname “the builder-in-chief.” Indonesia’s population composition is a critical asset, being the world’s fourth-largest country by population with approximately 276 million people, a quarter of whom are under 15 years old and only 7% above 65 years old, making it a massive consumer market. Qualified Indonesian voters, numbering 200 million, have nurtured the emerging democracy, with nearly 100 million people engaging in political discussions before this year’s elections. Political gatherings have shifted focus to issues rather than glitz and glamour, with high expected voter turnout this year. However, Prabowo’s victory could jeopardize the country’s democratic progress, as per the magazine’s perspective.
- Third: One of the Best Performing Economies Globally
Despite Jokowi not achieving the promised annual economic growth of 7%, Indonesia has been one of the best-performing economies globally in recent years. It is the sixth-largest emerging market by GDP, surpassing per capita GDP of India and Vietnam. If Indonesia continues on this path over the next decade, it may become one of the top 10 economies globally. Nevertheless, significant challenges lie ahead for Jokowi’s successor, with Jakarta’s per capita GDP reaching around $19,000 in 2022, contrasting starkly with adjacent Central Java’s less than $3,000 and the extreme poverty of some remote islands.
- Fourth: Green Commodities
While Indonesia’s economic backbone rests on primary commodities, particularly nickel used in electric car batteries, it has the potential to become the world’s fourth-largest green commodity producer after Australia, Chile, and Mongolia by 2030. Indonesia aims to manufacture electric car batteries totaling 140 gigawatt-hours by 2030, roughly equal to global production in 2020. Some mineral exports have been banned, prompting multinational companies to locally build refining plants, part of a policy known as “the transformation to the mine.”
- Fifth: Stage for Great Power Competition
The magazine concluded that Indonesia’s location, size, and available resources will make it a key stage in great power competitions, especially given investments flowing from both America and China. However, the incoming Indonesian president faces two challenges: potential tariffs or penalties damaging Chinese companies Indonesia relies on if tensions escalate between China and America and the beneficial transformation to the mine policy for nickel may have adverse effects in other sectors like solar energy.
