Indonesia’s presidential hopefuls face off on economy as campaigning ends

JAKARTA — Indonesian President Joko Widodo squared off on Saturday night with his challenger, Prabowo Subianto, on the issue of the economy in the final televised debate, which coincided with the last day of campaigning before the April 17 elections.

The incumbent president, also known as Jokowi, pledged to continue his infrastructure projects and promote more economic equality if re-elected, while Prabowo said the economy is going in the “wrong direction” and that the government does not have a development strategy.

Their running-mates also joined in the debate.

Just hours earlier, Jokowi closed his bid for a second term with a rousing rally, which attracted hundreds of thousands of supporters at the Bung Karno sports stadium in the capital, Jakarta.

In his speech, he highlighted the economy, urging people to remain optimistic while saying that Indonesia could become the world’s fourth largest economy by 2045.

“There is no developed nation, where its citizens are pessimistic. The citizens of a developed nation must stay optimistic,” he said.

Prabowo held his closing rally in the same stadium last week, in which he railed against government corruption and economic “hardships” among the population.

Indonesia’s economy is projected to hit $427 billion by 2022.

According to the government agency, Statistics Indonesia, the country’s GDP posted a 5.17 percent growth in 2018. The average growth rate has hovered above five percent since Jokowi came to office in 2014. But that is shy of the seven percent growth Jokowi promised to achieve when he first ran for office.

Jokowi faces other headwinds, with the country’s foreign direct investments declining by almost nine percent last year -- the lowest in five years. Meanwhile, trade deficit has ballooned to more than $8 billion in 2018.

Bhima Yudhistira Adhinegara, an economist with the Institute for Development of Economics and Finance, called the current growth rate as “very, very stagnant”. How that affects the voters’ pockets would ultimately determine the outcome of the ballot on Wednesday, he said.

“For Indonesia, as an emerging economy, I think the growth of five percent is not enough,” he told TRT World. The ideal growth rate should be at least seven percent, he added.

Part of the problem is that Indonesia continues to be a major exporter of raw materials and other commodities that are being hit by the global economic slowdown, Bhima said.

He noted that presidential challenger, Prabowo, is offering “higher economic growth” by shifting the structure of the economy from commodity to industrial production base.

At the debate on Wednesday night, Prabowo, honed in on the issue saying that while other countries are going through industrialisation, Indonesia is facing “de-industrialisation”. He also said that Indonesia should follow China’s example by eradicating poverty in 40 years. 

Jokowi responded that the country “cannot just develop industries by snapping our fingers”. He said he is trying to connect industrial areas by prioritising infrastructure development in the last five years.

And on that issue, Bhima, the economist, said Jokowi did a “very good job” and deserves praise.

“But we see that because of the massive infrastructure projects of the government, they are cutting a lot of subsidies. I think that hurts the lower and middle class,” Bhima said.

Another issue that the next president needs to “evaluate” are the fiscal incentives the government is extending to investors.

“I think it is not working. There is very, very slow progress,” Bhima said, adding that the current tax policy on investments “is frightening the business side”, to make major investments in Indonesia. Thus, he said, foreign direct investments are down.

However, in his final pitch to supporters earlier on Wednesday, Jokowi promised that the economy “will be stronger” for everyone, including the soldiers, police, teachers, doctors and farmers.

He said a “big and good future” await the country, stirring the thousands of people that packed the stadium.

While some of Jokowi’s magic from 2014 has faded, he still managed to excite the crowd as he emerged on stage like a rock star. A free concert preceded his appearance.

As he spoke, some in the crowd fainted due to the rising humidity in the arena.

A festival-like atmosphere ensued at the rally, complete with marching bands, traditional dancers and a horse carriage that would carry Jokowi and his wife, Iriani, to the debate venue later at night.

Iin, a supporter, told TRT World that she voted for Jokowi in 2014, and she will do so again this year. 

Beby Zuliarni, another supporter, said she is optimistic that Jokowi will prevail over Prabowo.

“The economy is definitely much better for many people today than in 2014. He will win. I am sure of that.”