Indonesia, with a population of 280 million, stands as an underappreciated development success, experiencing substantial economic growth and infrastructural development over the past three decades. Edward Gustely, managing director of Penida Capital in Jakarta, remarks on the significant rise in per capita income from $350 to $5,000 during this period.
Under the leadership of President Joko Widodo, known as Jokowi, Indonesia has witnessed transformative changes, particularly in infrastructure. Greater Jakarta has emerged as the world’s second most populous metropolis, boasting 34 million residents. Jokowi’s initiatives, including the construction of Jakarta’s metro and Southeast Asia’s first high-speed rail line, have contributed to this progress, with GDP experiencing consistent growth of 5% per year.
While Jokowi enjoys widespread domestic approval, challenges persist, notably in addressing systemic corruption and empowering anti-corruption institutions. Despite economic achievements, Indonesia ranks poorly in corruption perceptions, hindering business dynamism and investment potential.
Indonesia’s missed opportunities in high-value-added manufacturing have become apparent amid regional competition, with Vietnam and Thailand offering more favorable conditions for manufacturers. However, Jokowi has strategically focused on leveraging Indonesia’s abundant nickel resources, positioning the country as a key player in the electric vehicle (EV) battery industry.
Jokowi’s ban on nickel exports aims to incentivize the establishment of smelters and battery manufacturing facilities within Indonesia. Nonetheless, critics argue that this strategy may not foster the same level of technological advancement and human capital development as seen in neighboring countries.
Concerns over environmental sustainability, particularly Jakarta’s susceptibility to flooding, have taken a backseat to grandiose projects like the proposed new capital in Nusantara, located on the island of Borneo. However, skepticism surrounds the financing and feasibility of such endeavors.
As Jokowi’s tenure nears its end, Indonesia faces political transitions, with former opponent Prabowo Subianto emerging as a frontrunner for succession, supported by Jokowi’s son, Gibran Rakabuming Raka. Prabowo’s controversial past and Gibran’s age raise questions about the future direction of Indonesian politics.
As Indonesia navigates these transitions, its ambitions in the EV battery sector, driven by its rich nickel deposits, remain pivotal amid broader political shifts and economic aspirations.
