The 17th annual G20 meeting of heads of state was held in Bali, Indonesia this year, and the host nation and its president received high praise for achieving consensus among the participating Western and Eastern powers in a tense global environment. It was a significant accomplishment for President Joko Widodo, a leader of the non-aligned Global South (regions within Latin America, Asia, Africa and Oceania), and a successful turn on the world stage by the world’s fourth most populous country (280 million people).
Indonesia and Joko Widodo, the nation’s president since 2014, represent an interesting political model for the Global South, which is striving for greater unity and a louder voice in world matters. The popular president, whom everyone calls Jokowi, has led a period of impressive economic development and recently polished his country’s international profile by skillfully hosting a G20 summit dogged by early pessimism.
Joko Widodo’s personal investment in the summit was obvious when he traveled to Kyiv, Moscow and Beijing months before the meeting, and quieted threats of a summit boycott if Russia was not excluded. Despite the naysayers, the summit was well-attended and produced an agreement that many doubted was possible. Indonesia also secured a pledge by a group of developed countries to contribute $20 billion in public and private funding for the country’s decarbonization initiatives.
The meeting enabled Indonesia to showcase its remarkable pace of economic development at a time of global turmoil, and positioned the country as an attractive investment opportunity for the industries of the future. Indonesia’s year-over-year GDP growth in the third quarter of 2022 stood at 5.7%. Inflation in October also hovered around at 5.7%, which is surprisingly good in view of the double-digit inflation in many countries. Exports are growing at a good pace, especially palm oil and thermal coal, but manufacturing is increasingly important.
Foreign direct investment also reached new highs, especially investments in raw material processing. Indonesia is a mining powerhouse in nickel and bauxite, and has large cobalt reserves, materials that are in high demand for green technologies. The country’s non-aligned political stance enables it to attract foreign investment from both sides of the East-West divide.
Except during the global pandemic slump, Indonesia has sustained a ~5% growth rate for many years. Joko Widodo’s administration has invested heavily in national infrastructure, and is building highways, bridges and dams at a much faster pace than in the past. Critical to all of this economic success is the nation’s political stability, which is characterized by an inclusive process of democratic consolidation. When ex-general Prabowo Subianto Djojohadikusumo lost to Joko Widodo in the 2019 presidential election and refused to concede, alleging fraud, Joko Widodo appointed him defense minister to defuse the crisis and demonstrate inclusivity.
Joko Widodo rose to power by projecting himself as a simple man, an outsider and man of the people. But he has desisted from the extremist populism of other presidents around the world. The erosion of democracy in Muslim nations such as Turkey and Tunisia has not surfaced in Indonesia, which has the largest Muslim population in the world and may represent a new model of democracy for the Islamic world.
Freedom House, an American organization dedicated to the support and defense of democracy around the world, says: “Indonesia has made impressive democratic gains since the fall of an authoritarian regime in 1998, establishing significant pluralism in politics and the media and undergoing multiple, peaceful transfers of power between parties.” Joko Widodo, who has governed for eight years, is an integral part of this success story.
However, the country’s democratic maturity is still incomplete, and there are plenty of challenges to overcome. Joko Widodo’s critics claim that the once-independent anti-corruption agency was debilitated when its staff was absorbed into the civil service, and there is persistent violence against minority groups. Amnesty International reported an increase in attacks against human rights activists in 2021.
The ambitious project to build a new capital city called Nusantara is also facing major challenges. The objective is to alleviate congestion in Jakarta and extend economic opportunity beyond the island of Java, the epicenter of this archipelago nation. Opponents allege infrastructure development issues and financing irregularities, and criticize the hasty legislative process that approved the project.
Other countries such as Vietnam are also vying for a greater share of foreign investment from companies seeking to diversify their manufacturing supply chain and reduce their dependency on China.
But no one doubts the tangible progress made by Indonesia, nor the positive image achieved by Joko Widodo’s turn in the global spotlight. Hosting the G20 summit enabled Indonesia to build a network of relationships that could lift the nation to a higher rung on the global ladder of nations. It remains to be seen how Joko Widodo will exploit this opportunity during the remaining two years of his second term (Indonesia has a two-term limit), amid all the global uncertainty that surrounds his nation.