Series of Indonesian ministerial regulations damage country’s international reputation and harm investor confidence

                                     Jokowi Slaps Down Minister on Press Freedom Threat

Forcing rescission of harsh new restriction could mean welcome liberalization

Indonesia’s President Joko Widodo headed off a potential firestorm of international criticism on Thursday when he forced the home ministry to rescind harsh new regulations that would have restricted the activities of visiting foreign journalists in the country.

The new rules, apparently issued without consulting the president, were reminiscent of the harsh restrictions under the authoritarian Suharto regime and were sharply criticized by rights groups and the Jakarta Foreign Correspondents Club.

The president’s quick action to head off a press freedom crisis and rein in the actions of a ministerial outlier could also set an important precedent. After a series of ministerial regulations that have damaged the country’s international reputation and harmed investor confidence, the president could be fighting to grab the stick away from officials who often act on their own.

“This may be a watershed moment. These officials never apologize for their actions, no matter how damaging,” said a senior Western business leader. “I hope Joko is finally taking charge.”

The Home Affairs Minister Tjahjo Kumolo issued a rare climbdown, almost unheard of for Indonesian cabinet ministers.  On the same day, the government signaled that a new set of incentives will soon be issued to try and lure wary investors into the country. Also in recent weeks, two courts have unwound trumped up charges against two international school teachers and dismissed a $125 million lawsuit that might have put their school, the prestigious Jakarta Intercultural School, out of business.

That case was watched closely by investors and diplomats who feared that a powerful local developer was attempting to use false sex abuse charges to grab the high-value real estate the school owns.

With a recent cabinet reshuffle that brought more liberal voices into the administration, international investors are hoping that the president, known as Jokowi, will also act swiftly to ease bureaucratic restrictions on foreigners and remove roadblocks that have made the country seem unwelcoming to investors.

“It’s perception and it’s not good,” a senior government official said this week, according to a western business leader. “We have lost the perception battle with investors. How do we get it back?”

Over the past two to three years, rising nationalist rhetoric, matched in some cases with actions restricting foreign room to navigate the Indonesian economy, has caused deepening concern among the multinationals. In 2013, Muhammadiyah, the nation’s second largest mainstream Muslim organization, used the Constitutional Court to overturn the nation’s upstream oil and gas regulator, a blow to multinational energy companies. Muhammadiyah has declared a “constitutional jihad” campaign to reverse decades of laws and regulations liberalizing the economy.

In April of this year the Constitutional Court ruled in favor of Muhammadiyah on a judicial review that overturned a 2004 Water Law that leaves soft drink bottlers, water companies and even privatized city water providers with no legal basis for the permits they rely on to do business. Numerous lawsuits have already gone after private companies on the basis of the ruling and potentially any private company using water for industrial use could be at risk until a new regulation is in place.

The press regulation in question, a circular sent out to regional administrations nationwide, demanded that foreign journalists and their local crews obtain permits issued by the Foreign Affairs and Home Affairs ministries before being allowed to report in the country. It also obliged foreign journalists to report their activities and acquire permits from all relevant levels of government, from the municipal or district level to the provincial level.

“The letter clearly implies disobedience of a president who is open to foreign coverage, as well as suspicion of the press and civilians,” Poengky Indarti, executive director of the rights group Imparsial, told local media on Thursday. “It will also lead to less investment and tourism income.”  The rescinded circular, she said, “goes against President Joko Widodo’s position of welcoming foreign journalists covering Papua and other regions in the country.” 

In a prepared statement, the Jakarta Foreign Correspondents Club said that the “continuation and expansion of restrictive state policies on visiting journalists is a sad reminder of the authoritarian Suharto regime, and a stain on Indonesia’s transition to democracy and claims by its government that it supports a free press and human rights.”