Governance and political challenges in Indonesia

8 Nov 2016


After Indonesia experienced a surge in economic growth between 2010 and 2014, its Gross Domestic Product growth rate has slowed, sinking from 6.2 per cent in 2010 to 4.8 per cent in 2015. While the Indonesian Government can do little to combat external financial factors such as falling commodity prices and shrinking markets for its exports in China, there is an opportunity for President Joko “Jokowi” Widodo to deliver on his promises of internal reforms. In addition to economic reforms, Jakarta faces other challenges such as perceived corruption within the government and public services. Growing nationalism and the increasing influence of the military in domestic matters could also play an interesting role in shaping Indonesia’s future.

Key points

  • The Indonesian parliament continues to be dominated by secular-nationalist parties.
  • The emphasis on nationalism could undermine the prospect of greater ethnic Chinese representation in the parliament.
  • The perception of elevated levels of government corruption will continue to pose major economic and social problems and can impede the provision of public services.
  • A flawed taxation system further hampers the ability of the government to enact requisite financial legislation.
  • The Indonesian National Armed Forces are seeking to increase their influence in domestic politics through greater involvement in internal security matters.
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