The freeze on fuel subsidies decided by Widodo's government has led to a price increase disputed by citizens. The economic situation can play a fundamental role in parties' choices for the 2024 elections.
Article by Aniello Iannone
On 10 September, the Indonesian government blocked fuel subsidies, causing prices to rise automatically. This decision led to turmoil and protests in Jakarta, where the population took to the streets for the choices of the government led by President Joko Widodo. Rising fuel prices, however, are not the only problem in Indonesia. From an economic point of view, the food sector has also suffered from a significant increase in prices without an adequate minimum wage increase. In this situation of economic instability, Indonesia is already beginning the long approach toward the next elections of 2024, between new and old players who will compete for the presidency.
The Indonesian economy is going through a phase of continuous and rapid price increases. Since last year, Indonesia has seen a 5% -10% increase in prices of essential goods called pokok (such as rice, oil, and eggs). This increase was recorded before the suspension of subsidies: oil prices soared in February, reaching almost $ 4 per liter. Increase that took place even before the war in Ukraine.
To understand how much the negative effect of rising prices is a problem for most Indonesian population. However, it is necessary to analyze the economic and social structure of the country. Indonesia has a population approaching 300 million, of which nearly 10% live in poverty, and 4% in extreme poverty, especially in areas such as Kupang in NNT or Papua. In addition, the average minimum wages in Indonesia are around $ 270 a month in Jakarta, the area with the highest minimum wage. In Yogyakarta, the minimum wage is around $ 100 a month, the lowest in the country. Prolonged price increases without adequate wage increases will weigh heavily on citizens.
The political situation: what does the post-Jokowi forecast?
The complicated economic situation that Indonesia is facing must also deal with the first signs of a future election campaign and an unclear political situation. During Jokowi's second term, there were numerous protests against the government, especially against the law on labor reform, which among other things, modifies the regulations for minimum wages, or against the reform of the penal code. On 9 September, protests arose against the increase in fuel and the suspension of government subsidies.
The protests are the consequence of fragmented politics in Indonesia. At the moment, the PDI-P, Jokowi's party, seems to want to continue to bet on Puan Maharani for future elections, even if his popularity among Indonesians remains weak, especially among the lower middle class. Nevertheless, Puan is the daughter of Megawati Sukarnoputri, the leader of the PDI-P. The possible candidacy of Prabowo Subianto remains unknown. The former Indonesian general lost twice to Jokowi in the 2014 and 2019 elections. After the latter, he was incorporated into the government as Defense Minister. However, his future victory could mean a change in a conservative-Islamic key, given Gerindra's tendency to join forces with pan-Islamic parties.
Two other protagonists could be Anies Bsweden and Ganjar Pranowo. Ganjar Pranowo, governor of Jawa Tengah, is second in the polls only to Prabowo. Ganjar is part of the PDI-P, but his popularity is high, unlike Puan, who is considered an elite figure. Anies Baswedan is instead the current governor of Jakarta: after declaring his willingness to run, he was contacted by the national democratic party NasDem of which he will be the candidate for the presidency. Anies, along with Prabowo and Ganjar, runs high in the opinion polls among the population.
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