Indonesian President Joko Widodo touted his success in delivering steady economic growth, reducing poverty and promoting the country’s global standing in his final State of the Nation address, while apologising for unachieved goals he will bequeath his successor.
 
Jokowi, as the president is better known, said he has built a foundation for “Indonesia-centric development” that includes boosting onshore processing of critical minerals which have drawn investments and created more than 200,000 jobs.

“Although many countries sue us, oppose us, and even attempt to thwart us, we as a sovereign nation, as a great nation, remain steadfast and even continue to march forward,” said Jokowi, who will step down from his post in late October after serving the maximum two five-year presidential terms.

Indonesia has kept economic growth steady at around 5%, stabilised inflation at roughly 2-3% and reduced extreme poverty, he said. Unemployment as well as the rate of stunted development among children have also declined, he said. 

“Jokowi’s tenure has been characterised by significant improvements in the country’s investment climate, and steady improvements in the country’s competitiveness” for foreign direct investment (FDI), said Douglas Ramage, managing director at BowerGroupAsia Indonesia, a strategic advisory firm.

“While FDI has increased steadily - and this is largely because of regulatory fixes and elimination of the previous restrictions on what sectors foreign investors could own or operate in - the country has however struggled to generate significant investment in manufacturing,” he said.

Jokowi stressed his efforts to position Indonesia as a voice for the Global South, the group of developing countries across Asia, Latin America and Africa, most of which were colonised for their natural resources. One critical policy he has introduced is downstreaming, which started with the onshore processing of critical minerals such as nickel instead of their raw export, a change which has pulled in large-scale investments, especially from China. 

Southeast Asia’s biggest economy is now trying to use that blueprint through the onshore processing of everything from copper to fish, while urging other emerging markets to follow. 

In his speech on Friday, Jokowi reiterated the need to expand downstreaming to agricultural products. In doing so, Jokowi’s administration is seeking to develop a resilient supply chain, a move that Global South countries need to emulate to avoid being caught in trade turbulence resulting from supply snarls and the US-China rivalry. 

The benchmark stock index retained its half-percent gain after the speech, poised to close at another record high, while the rupiah was 0.2% lower, in line with Asian currencies.

A soft-spoken former furniture-maker and Metallica lover who became Jakarta governor before running for president, Jokowi was a political outsider who vowed to reform a system dominated by family dynasties and military elites. He’s leaving after a tenure that has been criticised as patchy, having failed to achieve a GDP growth of around 7% as promised when he took office in 2014, though the economy was stalled by the global pandemic. 

Critics say he failed to live up to pledges that he could bring greater change to Indonesia by eradicating corruption and cutting down on patronage, as well as the dynastic politics which have long been a feature of the country’s political landscape.

“Ten years is not a long period to solve all problems in our nation,” Jokowi said. “I would like to extend our apology - apology for anyone who feels disappointed, for every hope that has not been materialised, for every dream that has not been realised.”

The country’s track record for governance weakened during his tenure. Last year, Indonesia ranked 115th out of 180 countries in Transparency International’s corruption perceptions index, worse than when he took power. His move to bring the anti-corruption body under the president’s office diminished the agency’s independence.

Activists have also accused Jokowi of eroding the country’s democracy. His administration passed a sweeping criminal code criticised as an attempt to stifle free speech and curb dissent. Some segments of the public accused Jokowi of effectively meddling in the recent presidential contest by allowing his 36-year-old son, Gibran Rakabuming Raka, to be the running mate of Prabowo Subianto, who won February’s election. 

Their victory means that, for the first time in Indonesian history, the scion of a sitting president has become the vice-president elect.

As Jokowi wraps up a decade of rule, all eyes will be on former general Prabowo and whether he can help Indonesia navigate the path to becoming a rich nation. In his speech, Jokowi called on his successor to focus on boosting growth in the less developed provinces. 

“With our unity and cooperation, with continuity that we maintain, Indonesia, as a sovereign and a strong nation will make a leap of progress and achieve the 2045 Golden Indonesia vision,” Jokowi said.

  - Bloomberg