Politics impedes Indonesian leader's 2014-19 agenda

Subject

Political constraints to Jokowi's reform agenda.

Significance

In recent speeches, especially his state of the nation address and the budget speech last month, Jokowi has stressed the need for wide-ranging economic reform, particularly investment in infrastructure and human resources, deregulation, bureaucratic reform and corruption eradication programmes. The tone and emphasis of these reform-focused speeches have differed significantly from last year's statements, where rhetoric of economic nationalism dominated.

Impacts

• Falling public revenue will strengthen the finance ministry's resolve to pursue major corporates such as Google for tax.
• This will be popular politically, but would rattle foreign investors concerned about unpredictable tax policies.
• The outcome of the 2017 Jakarta gubernatorial elections holds the key to important transportation projects underway in the capital.