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A beacon of stability in Indonesia?

What happened?

On April 17, nearly 200 million Indonesians will vote in the presidential and parliamentary elections. It will be a rematch between the incumbent reformist Widodo and his challenger Subianto, a former general with links to Islamist groups. Widodo is likely to secure his second term with his coalition that is made up of nine parties, representing about 60% of the seats in the national legislature.

What does this mean?

Given Indonesia’s modern development, a second term for the reformist Widodo indicates a stable political climate. Although Widodo’s economic reform has not been as ambitious as, for instance Modi’s reform in India, Widodo has raised infrastructure investment and reformed state-owned enterprises. Political stability in the face of such reform is indicative of strengthening institutions, especially in a fast-growing economy with a young population which is also the third largest democracy and the largest Islamic country in the world. The roots for such institutional stability lie in Indonesia’s history at the crossroads of civilizations in which different ethnicities have lived together relatively peacefully for centuries.

What’s next?

However, ethno-religious tensions have been rising in Indonesia for some time. The onset of modernity threatens to undermine Indonesia’s traditional ethno-religious stability. Another wave of enthusiasm following more promises of reform that cannot be fulfilled could spark tensions, leading to political instability. In developing countries, high expectations followed by failed reform can quickly lead to violence. Therefore an important bellwether is how ambitious Widodo’s reform plans in his second term will be. Since this will be his final term, we could expect more ambitious economic reform, but it is also possible that he opts for more economic nationalism (and thus social stability) to keep his party in power.