Indonesia in 2020: future challenges for the new president

Abstract

This paper considers the challenges facing Indonesia's incoming president, providing a broad picture of what the country might look like in 2020.

Summary

As Indonesians prepare to welcome a new president, South-East Asia’s most populous state finds itself at a crossroads once more. Having undergone a rapid transformation since the end of former president Suharto’s rule in 1998, the coming years will see the country face a number of testing challenges. For whoever wins this week’s election – and early indications suggest that it will be the former governor of Jakarta, Joko Widodo – success in addressing these challenges will determine the future fortunes of the country.

In particular, an increased population will see food, water and energy security become major concerns. Indonesia’s frequently woeful infrastructure, meanwhile, will have to be significantly upgraded to accommodate its people and foreign investors. The country also faces challenges in terms of corruption, education, health and the environment. Should the new president prove successful in tackling these challenges, however, then there will also be opportunities for success, especially if Indonesia’s economy regains its former strength.

Understanding these challenges, therefore, will be crucial for governments, policymakers, and investors with an interest in Indonesia. This paper considers the challenges facing the incoming president, providing a broad picture of what Indonesia might look like in 2020.

Key points

Indonesia’s new president, likely to be Joko Widodo, faces a range of challenges in his first term, including: food, water and energy security; the need to upgrade vital infrastructure; addressing corruption; improving health and education; and increased environmental concerns. The key to addressing many of these challenges lies in cutting costly fuel subsidies. While subsidies sap the budget and waste funds that could otherwise be used to address these issues, passing the vital reforms will not be easy, especially given hostile responses from parliament and the public. Improving public services, including health and education, and eliminating corruption are important long-term goals facing the new president. While some improvements can be expected, especially if a raft of new policies is introduced, these challenges will continue beyond the new president’s first term. Now, more than ever, the country needs good governance and sound decision-making. How the new president addresses these challenges will go a long way towards determining the future fortunes of Indonesia.