During the US presidential campaign in 1980, George H. W. Bush (Sr.) vilified Ronald Reagan’s economic proposal as ‘Voodoo Economics’.
‘Voodoo’ refers to Afro-American shamanic tradition. The pejorative feature of the term is attributed to its unproven methods, inconsistent results, and absurd claims - in short, its sheer superstition. The equivalent of ‘voodoo’ in Indonesian tradition is ‘dukun’.
Back in 2014, Joko ‘Jokowi’ Widodo targeted 7 percent GDP growth per annum as he got elected as the 7th Indonesian President. Portrayed as a pristine and progressive figure, the former mayor of Solo uplifted the country’s optimism. His ‘mantra’ was ‘Kerja, kerja, kerja!’ (meaning: ‘Work, work, work!’).
But almost comically, the ‘mantra’ simply did not work.
Until the last quarter of 2019, Indonesia’s GDP growth was stuck at only 5 percent.
During his first term in office, Jokowi was predominantly pivoting on infrastructure projects, as he frequently insisted that such development was the ultimate measure in paving the way for thriving economy. Whereas, an extended journal published in 2019 by ASEAN asserts firmly that human development is key for economic success for Southeast Asian countries.
In his inauguration speech after being re-elected for his second term in 2019, Jokowi sought to convey 7 trillion USD in GDP by 2045. But this time, there are very good reasons to be skeptical of his pitch.
First of all, as a politician, Jokowi tends to overpromise and underdeliver. It is simply due to the very nature of his grandióse populism, and the evidence regarding the matter is ubiquitous.
Secondly, no serious economists in the country can comprehend how he got to the number by conservative estimation using prescient statistical models. Nor can he render sound practical measures by which he feasibly precast to attain the sevenfold growth from the current GDP, except mere buoyancy.
(Apparently, aside from his affinity for ‘mantra’, Jokowi also seems to be infatuated by the number ‘7’. Maybe because he is the 7th President of Indonesia, but who knows?)
Nonetheless, the Jokowi administration has so far introduced two separate bills to the parliament, namely the Omnibus Bill and the newly-approved Mineral and Coal Mining Bill.
Airlangga Hartarto, the Coordinating Minister for Economic Affairs, provides that both are critical in acquiring ‘the grail’ of 7 percent GDP growth. The Omnibus Bill is promoted as a constitutional requisite to prompt robust economic growth; a ‘holy scripture’ of Jokowi’s political economic policy.
In a closer look, the very tenets constituting the Omnibus Bill are remarkably similar to those of the Reagan ‘Voodoo Economics’. Deregulation, corporate-tax incentives are overwhelmingly salient in the bill. These neoliberal cornerstones have been proven to be a fiasco in the 1980s and the 1990s for it could only produce short-term growth and long-term debt.
In the political sense, the roughly 1000-page-long bill resembles an element of the ‘China model’. It stems from the fact that it designates the central government as an 'omni-judicial-authority' when it comes to business permits and regulations; dwarfing the autonomy of provincial governments.
(Interestingly, some economists and political scientists have also equated modern China’s economic policy to neoliberal policy. Meanwhile, an alternative perspective posited by Yasheng Huang, a professor at MIT, suggests that the 'China miracle' was not due to its authoritarianism or infrastructure projects, instead it was all the human capital.)
Moreover, though the Omnibus Bill is yet to be implemented, being pessimistic is equitably justifiable. Why?
In order to boost domestic productivity and foreign investments, Jokowi has to strive for unwavering political stability and lean bureaucracy. Alas, with regards to both aspects, it seems like he failed already.
The parliament has not approved the bill just yet, but it has sparked large-scale protests across the country; soaring the domestic political tensions. Indonesian workers’ unions unequivocally reject the Omnibus Bill which they viewed as a blatant assault on worker’s rights. The protests persist even after the parliament announced to postpone the discussion on the bill amid the pandemic.
Furthermore, Jokowi’s predilection in forming new state apparatus, such as the controversial ‘millennial staffers' and the good-for-nothing ideological governing body (BPIP), also contrasted the very spirit of efficient bureaucracy.
In long-term perspective, Jokowi’s ambition could also be thwarted by the reliability of the 'pandemic bond'. The 67 billion USD loan-package and its long tenure (10-50 years) to fight COVID-19 would most likely curb economic growth in the future.
All these paradoxes in Jokowi's plan for the economy can only yield unsustainable growth at best, if not mediocre one.
With no substantial revision, the Omnibus Bill would only be a 'superstitious spell' that could hardly change nothing in the real-world. In that instance, we could simply outline Jokowi's political economic legacy as ‘dukunomics’.