While Indonesia lags behind in infrastructure the country is also facing a widening gap between the 20 percent of the super-rich and the rest. The World Bank report Indonesia’s Rising Divide confirmed that ‘growth over the past decade has primarily benefitted the richest 20 percent and left behind the remaining 80 percent of the population ‘that is more than 205 million people’.
While President Joko ‘Jokowi’ Widodo already measures his administration by a reduction of inequality, in addition to lower unemployment and less poverty, much remains to be seen in terms of strategy, programs and implementation.
It is true that Jokowi has radically pushed higher tax revenue up to 16 percent of gross domestic product (GDP) ‘from 13 percent of GDP for the last 10 years, to enable sufficient fiscal space for his Nawacita (nine programs) plan; he has also freed up wasted money on fuel subsidies and reallocated the funds into much needed infrastructure. If this trend continues, within three or four years Indonesia’s infrastructure will be massively improved.
But Indonesia remains a laggard in social spending such as on health, social security and investment for the skilled transformation of its huge labor force, while Indonesians need to compete at least within the ASEAN Economic Community.
Even among its peers in ASEAN, Indonesia is way behind its productive capacity. Just consider Indonesia’s maternal mortality rate ‘more than 300 deaths per 100,000, our low coverage of sanitation facilities and clean water ‘and high degree of malnutrition of under-five year olds and stunting among the young.
To stem the widening gap between the top 20 percent and the rest, Indonesia needs more of a helping hand from the government. Further, there are three imperative reasons as to why President Jokowi should have all the motivation and interest to use government power to reduce inequality.
First, Indonesia is already party to the UN sustainable development goals (SDG) signed last November, so we need to prepare the SDG action plan for a five-year time-frame. Our high rate of maternal mortality necessitates a radical way, beyond mere redistribution.
One idea advocated by women rights groups and the Women’s Empowerment and Child Protection Ministry is for President Jokowi to put a priority on women’s social status by introducing a justice and gender equality law to ensure the following: Number one, reduced violence against women; two, more public facilities available for women such as toilets and clean water and daycare centers in public facilities (airports, train and bus stations); three, raise the minimum legal age of marriage from 16 to 18 years for girls to reduce child marriage; four, meaningful female participation in decision-making in public affairs.
The second imperative is that the government should reverse the trend that has seen inequality widen during the democratic era. Jokowi must attempt to de-link the misunderstood legitimacy of the old era by showing that the democratic era is capable of providing social and economic dividends of decent livelihoods for all, both in urban and rural areas.
During the last 15 years or more since Soeharto, Indonesian inequality has been increasing. In comparation, inequality remained stable during 30 years of the authoritarian Soeharto era, and was declining after the economic crisis in 1998.
The best way to reverse that trend is by, in addition to spreading infrastructure beyond Java, to emulate South Korea’s path of democracy ‘ the longer democracy was restored, the larger number of citizens were covered by tax-based and publicly funded social security.
Third, Jokowi should contain the worrying trend of propaganda and active recruitment by radical Islamist groups by opening diverse social and economic opportunities in many walks of life including and especially among women, girls and youth in urban centers and their outskirts, and in small cities in Java and outside Java.
Skill raining, job information, nation-wide internship policies should be introduced and strengthened, and made available widely across Indonesia, to absorb a huge and restless youth.
In the case of Indonesia, the real story is probably not the lack of better programs and policies, or lack of fiscal space to do more. The bigger constraints on President Jokowi and Indonesia have been the institutional capacity of the government itself to plan and to deliver. Compared to his experience in managing the capital and Surakarta, President Jokowi needs to revitalize and manage ministerial and non-ministerial agencies with more than 10 times the complexity of such cities.
In the fight to reduce inequality in Indonesia, one has to consider two actors that support or reduce the perception or the fact of inequality among Indonesian citizens: First, the role of local government in providing services especially those related to health, education, training and employment creation.
One simple idea is to provide incentives to local leaders, cities and regencies to promote human rights policies to ensure better public services based on impartiality, nondiscrimination and equal concern for all citizens, and to prevent ideas of Islam-only cities.
Second, is the capacity of local government and central government in regulating the operations of private companies to ensure compliance with environment regulations. The problem of forest fires in Sumatra and Kalimantan that destroyed more than 2 million hectares of pristine forest is largely the result of the poor quality of government and lack of transparency of land management and spatial boundaries. These factors contribute to forest fires every year.
Taking inequality seriously requires Jokowi to shift the way the government does its business. Because Jokowi’s ‘enemy’ is not the opposition ‘ but time. Defeating time requires a ‘management revolution’ to push public institution to get things done, to get things delivered on time as planned. No more delay.
*The article originally published on The Jakarta Post, 8th January 2016