Indonesia in 2015

Summary

For Indonesia, 2015 has been a year of tremendous fluctuations on the political front as President Joko Widodo (Jokowi) has been seeking to find his political feet, as well as on the economic front, as the country experienced the worst currency devaluation since 1998, and a dramatic turnaround in economic policy in the second half of the year. Foreign policy was not without its own drama, featuring among other things the drawn out and sensationalized execution of eight foreign drug offenders, and a U.S. state visit. Finally, in 2015 Indonesia was responsible for the worst “haze” in eighteen years, choking the region for several months and causing approximately US$34 billion in damage.

This chapter will review the highlights of the year in Indonesia, focusing on four areas — political highlights, institutional reform, the economy, and foreign policy. It will conclude with a brief section on Jokowi's leadership style and the country's future outlook.

Political Highlights: Jokowi's First-Year Performance

The biggest political story of the year by far is the story of Joko Widodo's first year as President of Indonesia. Elected in October 2014, he came into the presidency riding a tide of euphoria and expectation for reform somewhat reminiscent of the delirium that greeted President Obama in the United States in 2009. And, also similarly, these high expectations were quickly dashed, as political manoeuvres in the first months of his presidency meant that he faced an opposition-controlled House of Representatives (DPR) and a Cabinet reflecting the political strength of his “patron”, PDI-P head Megawati Soekarnoputri, his Vice President Jusuf Kalla, and National Democrats (NasDem) party chair Surya Paloh. During the past year Jokowi has had to manoeuvre politically between the interests of these party allies (who did not always act like allies) and multiple teams of advisors who had been with him since his gubernatorial days.

In early January 2015, only three months after becoming President, Jokowi took the bold move of abolishing fuel subsidies — an act which no president before him had been able to do. This gave the administration an additional 200 trillion rupiah (roughly US$16 billion) to spend on infrastructure and service delivery.