The upcoming presidential election has seen both current President Joko “Jokowi” Widodo and contender Prabowo Subianto place economic policy under the spotlight. Rather than focusing on economic reforms, however, as Jokowi did in the 2014 poll, both have shifted their focus towards the safeguarding of national resources. In considering that more nationalist focus, this paper will look at the current state of the Indonesian economy and the progress of economic reforms to date. Possible opportunities for Australian businesses and investors will also be identified.
- More reforms will be needed if Indonesia is to boost economic growth and attract much-needed investment, especially in infrastructure.
- There has been some progress in introducing economic reforms, but the effect has been stifled by the implementation of protectionist measures.
- The upcoming presidential election could also undermine some of that progress, especially if economic nationalism becomes a prominent campaign platform.
- The reform process is likely to remain slow and stilted for the foreseeable future.
- Significant opportunities for businesses and investors remain, however, especially in high population centres where strong growth is expected in the middle-income class.