Wednesday, November 26, 2014

The Ascent of Indonesia’s Presidency

Indonesia's new president, Joko "Jokowi" Widodo, and U.S. President Barack Obama recently met several times in different countries while attending the Asia-Pacific Economic Cooperation leaders' meeting in China, the East Asia summit in Myanmar and the G-20 summit in Australia. Both men are sure to have found these rounds of international summitry a welcome respite from their political difficulties back home. Widodo returned home to a parliament dominated by an opposition coalition. Obama, after the Democrats' drubbing in the U.S. midterm elections, faces a Republican-dominated Congress.

There is one crucial difference, though. Obama is in the final stretch of a two-term presidency. Widodo's presidential term has only just begun. Nehru is a senior associate in the Carnegie Asia Program. An expert on development economics, growth, poverty reduction, debt sustainability, governance, and the performance and prospects of East Asia, his research focuses on the economic, political, and strategic issues confronting Asia, particularly Southeast Asia.

But Indonesia is unlikely to suffer the Jakarta equivalent of Washington's political gridlock. It is neither headed for a confrontation between the legislature and the executive, nor will it face a policy stalemate. On the contrary, in coming years, Indonesia is likely to witness a gradual ascent in the powers and effectiveness of the Indonesian president relative to that of the legislature.

That ascent will owe much to Widodo's own formidable political acumen. But the country's constitution -- adopted in 1945 and amended four times -- will help too. Indonesian politics have never tested the boundaries between the constitutional powers of the president and that of the legislature. Former President Susilo Bambang Yudhoyono abdicated his powers to parliament, even though his ruling coalition commanded a hefty majority of the seats. But that was due to his reluctance to lead, not to the constitution.

Wolf in sheep's clothing

Widodo's presidency is likely to take a different course to Yudhoyono's. Although known for his mild manner and nonconfrontational style, the new president has shown he can be decisive and willing to use executive powers to get things done. The recent slash in fuel subsidies and resultant 30% hike in domestic fuel prices is an early example. Unpopular as it may be, not only will the move help lower fiscal and balance of payments deficits, restore macroeconomic stability and boost investor confidence, it will also release resources for much-needed infrastructure projects and social protection programs. Moreover, Widodo prefaced the fuel price increase by issuing "smart" cards to the poorest families across the country to protect them against the impact of the price increase, streamline their access to health and education services, and enable them to receive unconditional cash transfers from the government.

In an earlier and less publicized event, Widodo showed his tough side when he called a meeting of local government heads to make it clear he would cut their budgetary transfers if they failed to deliver public services effectively. As an ex-local government official himself, he clearly indicated he knew how and where to apply pressure and was prepared to use all the leverage at his command to achieve his objective.

These early actions highlight the enormous powers vested in the Indonesian executive to implement existing laws. Indeed, Indonesia does not need new laws. The priority should be to implement those already on the books. And since many of these laws are necessarily broad in scope and language, the government can significantly alter their impact by changing the way they are implemented. Widodo's resounding success as an elected local government leader rested on his ability to improve public services without passing new legislation.

The powers of Indonesia's parliament, on the other hand, are circumscribed. While it has the authority to establish laws, it can do so only after joint approval with the president, according to Article 20.2 of the constitution. Thus, the president has an effective veto by merely withholding approval of a proposed law before its draft is sent to the floor for a vote. Indeed, once approval is withheld by either party, laws cannot be reintroduced until the next parliamentary session. Furthermore, parliament cannot approve a law without a quorum of at least 50% of the political factions -- the parties represented in parliament. But the number of factions is equally split between the ruling and opposition coalitions, which will require both sides to cooperate for any successful legislative outcomes.

At least one piece of legislation must be approved by parliament each year: the budget. But even here, if the president and parliament fail to reach agreement, the previous year's budget automatically comes into force. Indonesia does not have to suffer the same ignominy of a government shutdown as the U.S. does whenever Congress plays budget politics.

Charm offensive

Despite his constitutional strength, however, Widodo will almost certainly opt to try to charm his parliamentary opponents rather than flex political muscles. His past record speaks volumes about his belief that win-win solutions are possible, even when facing a seemingly implacable opposition. Earlier in his political career, as mayor of Solo, he won over an initially recalcitrant city hall and was subsequently re-elected for a second term with a thumping 90% of the vote. He translated that popularity into partnerships with civil society and the private sector that helped tackle seemingly intractable development challenges facing the city.

As president, Widodo is also likely to leverage his current 75% popularity rating to pick apart the unity of the opposition coalition in parliament. The United Development Party has already shifted its allegiance to Widodo's coalition. Others may follow.

Even if they do not, the opposition coalition, of which losing presidential candidate Prabowo Subianto is a part, is not bound by common ideological views, so is unlikely to stay united on every issue. Indeed, its cohesion will soon be tested in an impending vote to confirm or overturn a presidential decree issued by Yudhoyono that blocked parliament's decision to end direct elections of local government heads.

Indeed, the resolve of Subianto's majority coalition to confront the president's minority coalition in parliament seems to be crumbling. The group recently agreed to share 21 of 64 leadership posts and amend the MD3 Law that it had helped ram through a lame-duck parliament in July. That law changed parliament's internal operating rules to favor Subianto's coalition and shields parliamentarians from corruption investigations.

Enemies within?

While Widodo's political position appears to be gathering strength, he is not invulnerable. On the contrary, he faces huge political and economic challenges and any misstep could prove costly. Perhaps his greatest vulnerability is his own party, the PDI-P. The party's leader (and Widodo's mentor), Megawati Sukarnoputri, disdains her political opponents and refuses to even meet some of them. She is as insular and uncommunicative as Widodo is engaged and gregarious. Her inner circle has been trying to contain the new president's growing popularity among the PDI-P's rank and file, which is seen as a threat to Megawati herself.

It may be too early to tell how much influence she will wield in the new administration, but the early signs are not promising. Although Widodo's cabinet selections were generally well-received, three questionable appointments had Megawati's unmistakable fingerprints -- one being the defense minister, who has a dubious human rights record; another her own daughter, who is not known for her competence.

Widodo must emerge from under the shadow of Megawati and apply his own brand of practical win-win solutions to Indonesia's many challenges. If he does so, he will find the presidency affords him the power to achieve a wide range of objectives. A majority opposition coalition in parliament may seem like an obstacle today, but the president has the constitution on his side and the power of unprecedented popularity. Many have compared Widodo's meteoric political rise to Obama's. But unlike the descent into deeper political paralysis expected in Washington over the next two years, we are likely to see an ascent of presidential power in Jakarta.

Vikram Nehru, a former World Bank chief economist for East Asia, is senior associate and Bakrie chair in Southeast Asian studies at the Carnegie Endowment for International Peace.


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