Indonesia's Election: Regional Shifts and Singapore Ties
20th February, 2024
What are the potential geopolitical ramifications of the Indonesian elections for alignment or realignment with major global powers and blocs? How would this impact geopolitical relations with Singapore?
First Layer
In light of the Indonesian presidential election results, forecasting geopolitical ramifications requires a holistic assessment of the interplay between Indonesia's internal political dynamics and its external relations, particularly considering its pivotal role within ASEAN and its strategic interactions with Singapore.
Prabowo Subianto's Presidency: Strategic Reorientations
As the newly elected Indonesian president, Prabowo Subianto’s administrative policy preferences are expected to echo elements of his historical defense orientation, couched within Suharto-era influence and military background. Yet, conflation with the past does not straightforwardly preordain future policy stances. Anticipated policy shifts must, therefore, be unpacked within the context of empirical evidence—primarily, the dialectic balance of election campaign promises, coalition pressures, and realistic policy vectors.
Defense Expansion and Bilateral Interactions:
Prabowo’s explicit campaign emphasis on bolstering Indonesia’s defense capacities to 2% of GDP aligns with his envisaged robust national security policy. This policy direction, should it materialize, would not only recalibrate Indonesia’s own military posture but also impact the ASEAN regional security milieu. With Singapore’s contemporary strategic endeavours invested in Total Defence—particularly in enhancing technological and cybersecurity capabilities—the prospect of increased Indonesian military spending underscores the need for elevated defense dialogue and potential joint-security initiatives.
Foreign Policy Realignment
Prabowo’s administration must navigate a complex foreign policy landscape, balancing Indonesia’s traditional non-alignment stance with burgeoning relationships, including with the United States and China—two poles of significant geopolitical gravity. While Singaporean-Indonesian relations have been historically rooted in economic interdependence and diplomatic cooperation, shifts in Indonesia’s global alignment strategies may invoke recalibration in Southeast Asia’s power symmetry. These may extend into diversified trade agreements, reconfigured military cooperation frameworks, and nuanced diplomatic engagements within Singapore’s own balance-of-power strategy.
Internal Coalition Management
Prabowo’s initial cabinet formation will serve as a litmus test for his coalition management abilities—particularly handling the Golkar party’s expectations and mediating Gerindra’s politic on the one hand and ideologies of PAN on the other. Any significant departures from the previously enshrined policy trajectories may invite shifts within the current policy milieu impacting domestic and regional governance structures.
Singapore’s Strategic Stance Post-Indonesian Elections
Analyzing advancements in regional governance from Singapore’s vantage point necessitates a deep understanding of its existing strategic frameworks that could be influenced by evolving political conditions in Indonesia:
Military and Defense Cooperation
As Prabowo's administration potentially amplifies naval capabilities, a conjoint focus must emerge on channelizing this increase towards collaborative regional maritime security. Singapore would need to proactively engage with Indonesia’s naval expansion strategies to synergize their defense postures, especially in relation to territorial waters and key maritime trade routes.
Trade and Economic Policies
The definitive propensity of Prabowo’s economic programs to drive investments in strategic sectors calls for Singapore to articulate evolving trade policies. This could culminate in the realignment of joint ventures and the exploration of new domains of economic cooperation adhering to both nations’ sustainable development objectives.
Environmental Considerations
Singapore, inheriting a strategic interest in regional environmental stability, must consider Prabowo's policy trajectory towards natural resource management—including Indonesia’s commitments to climate goals and the impact on transboundary ecological issues.
Impact on Diplomatic Relations
Given Singapore’s strategic reliance on regional stability and ASEAN cohesion, Prabowo’s diplomatic negotiations will have a ripple effect on the microdynamics of the grouping’s internal coherence. Singapore’s foreign policy apparatus may need to anticipate shifts within ASEAN, conducting nuanced diplomacy to sustain regional balance.
Projected Cascading Effects and Recommendations
Defense Policy Collaborations
Anticipating Prabowo’s pledge to elevate defense spending, particularly on naval forces, Singapore should initiate multi-faceted defense dialogues aimed at enhancing regional maritime security arrangements. Performing a policy review and formulating collective ASEAN responses within a year is advocated.
Envisioning Trade Perturbations
With defense augmentations mutually impacting economic dynamics, Singapore should reassess bilateral trade policies to align with Indonesia’s projected economic redistribution, especially concerning infrastructural and industrial collaborations. Strategic policy forums for this purpose should be convened within 18 months of Prabowo's term initiation.
Environmental Diplomacy
To engage with Indonesia’s environmental policy amendments, Singapore must deepen its diplomatic initiatives focused on enabling transboundary environmental management. Establishing a dedicated bilateral ‘green' framework within 24 months could safeguard regional environmental interests.
ASEAN Diplomatic Rapprochement
Given ASEAN's pivotal role in regional governance, subtle shifts in bilateral relations under Prabowo’s tenure may prompt alterations in the operational landscape. Singapore should employ proactive diplomacy to maintain practical strategic parity. A strategic ASEAN policy reassessment within 30-36 months is recommended to accommodate these transformations.
Singapore-Indonesia Bilateral Ties
In anticipation of a recalibrated bilateral tie due to Prabowo’s presidency, it is vital to sustain and potentially elevate the existing interdependent economic and geopolitical relations. Singapore’s policymakers should undertake calibrated policy adjustments catering to these trend-shifts—manifesting through proposed SEZ innovations, maritime strategy reviews, and infrastructural project collaborations, with evaluations due every two years.
Concluding Insights: Strategy for Implementation
The ascendance of Prabowo Subianto to the Indonesian presidency heralds the potential for remodeled defense policies and diplomatic orientations. In strategic response, Singapore's approach should encapsulate foresightful defense dialogues, economic policy evolution, proactive environmental diplomacy, and astute ASEAN-centric political engagement. These pathways should be mapped with clear timelines, responsibilities, and desired outcomes to ensure that policy readjustments are not only envisioned but judiciously implemented with a focus on preserving the delicate equilibrium that binds Singapore to Indonesia and, by extension, the broader Southeast Asian regional governance complex.
Second Layer
Following the election of Prabowo Subianto as Indonesia's president, and incorporating the available empirical data, including his historical defense orientation and coalition dynamics, it becomes imperative to project the geopolitical ramifications for regional alignment or realignment with major global powers and blocs, and assess the potential transformations in geopolitical relations with Singapore.
Defense Strategies and Foreign Policy Realignment
Prabowo's ascent to presidency signifies potential for shifts in strategic orientations, with defense spending projected to reach 2% of GDP. This indicates an expansionist outlook towards defense—especially naval capabilities—a departure from preceding military expenditures (139.1 trillion rupiah, US$9.27 billion, 5.6% of total national expenditure). Such defense augmentation, specifically within naval forces, is poised to influence Singapore's maritime security strategy given its reliance on trade routes crossing Indonesian waters.
In analyzing this, three core factors emerge:
Implementation of Defense Initiatives
Prabowo's advocacy for indigenous industry and defense may well extend beyond mere budgetary increments. The ripple effect of this could instigate a realignment of defense postures in Singapore, necessitating bilateral dialogues focused on synchronized maritime exercises, joint R&D in defense technology, and intelligence sharing on regional threats, ensuring defense congruence without disrupting the stable bilateral equilibrium.
Indonesia's Non-Alignment Stance and Coalition Pressures
Prabowo's previous role as defense minister could suggest a propensity for balancing relations with both the US and China, thereby maintaining Indonesia's historical non-alignment policy. Yet, the present coalition underpinned by political entities like Golkar, Gerindra, and PAN presents a spectrum of policy pressures ranging from economic nationalism to pragmatic foreign diplomacy, which will authenticate or potentially modify the course of foreign relations, affecting Indonesia's posture vis-à-vis Singapore and key dialogues surrounding ASEAN-centric trade and strategic orientations.
Singapore's Strategic Defense Imperatives
Given the prospective bolstering of Indonesia's defense capabilities, Singapore must reconcile requisite defense resource allocations that resonate with Total Defence domains. Analytically, incremental defense discourse would be paramount for Singapore to remain adept at tending to emergent strategic environments influenced by Indonesia's defense undertakings.
Trade Policies and Economic Paradigm Shifts
With economic policies under a Prabowo administration potentially pivoting to fortify sectors deemed vital for national security, changes in trade dynamics are projected. The election results suggest that Indonesia, under its 2024 growth projections (4.7% to 5.5%), will be more assertive in safeguarding economic sovereignty without eschewing international cooperation. Singapore's economic nexus with Indonesia, therefore, becomes two-pronged:
Empirical Analysis of Trade Realignment
Understanding the Jakarta-Bandung high-speed rail project reflects Indonesia's emphasis on sovereignty and self-reliant infrastructural development—precursors to similar initiatives under a nationalistic economic agenda. This might influence reciprocal trade agreements with Singapore, demanding proactive engagement in infrastructural connectivity projects, SEZ momentum, and diplomatic acuity to nurture bilateral economic ties that reflect mutual respect for national priorities, particularly in strategic and infrastructural realms.
Singapore’s Policy Adaptation and Joint Economic Ventures
The economic collaboration between Indonesia and Singapore, in light of the East Java parliament's political clout (127 seats), could steer Singaporean response towards reinforcing shared economic zones and facilitating trade mutualities, embracing realistic political and parliamentary negotiations within Indonesia's landscape to advance cooperative prospects.
Environmental and ASEAN Diplomatic Focus
Environmental strategies will be increasingly salient in bilateral relations with the heightened global urgency of climate change actions. Considering Indonesia's palm oil production (18.4 million tonnes, 2022) and commitments to decarbonization, Singapore's environmental policy should underscore collaborative climate adaptability measures and a strong ASEAN-centric narrative towards sustainable initiatives.
Indonesia's Environmental Imperatives
Given the global climate commitments and domestic environmental impacts of policy decisions, Prabowo's administration may institute significant conservation or resource utilization measures. A thorough bilateral discourse should cater to enhancing shared ecological stewardship and fostering sustainable frameworks, considering implications on trade and biodiversity that hinge on Indonesia's strategic environmental roadmaps.
ASEAN Collective Dialogues and Adaptation
Singapore’s interdependent ASEAN diplomacy regarding environmental and diplomatic pivots under a Prabowo presidency will necessitate reassessment of collective strategies, ensuring ASEAN maintains an articulate, cohesive response to global and regional environmental challenges. This will guide Singapore's stance on ASEAN-led sustainable development paradigms and enable the anticipation and circumvention of ecological frictions.
Strategic Recommendations
In consideration of the foreseen defense, trade, and environmental policy shifts under Prabowo Subianto's presidency, the following recommendations emerge for Singapore's strategic planning:
Initiate designated bilateral defense forums with Indonesia to address combined military exercises and collaborative defense technology development within 12–18 months.
Engage in policy dialogues aligned with Indonesia's economic redirection, earmarking significant infrastructural and trade treaties, and nurturing the dynamism of established SEZs, revisiting economic strategies biannually.
Deepen Singapore's role in environmental diplomacy through ASEAN and bilateral engagements, promoting shared ecological responsibilities, with an aim to bolster sustainable practices in the next 24 months.
Facilitate adaptable diplomatic channels to remain in tandem with Indonesia’s potential shifts in global alliances that may surface, channeling dialogue into pragmatic and progressive ASEAN integration efforts.
Foster intra-ASEAN coherence to buffer against regional realignments, emphasizing Singapore's central contribution to ASEAN's strategic initiatives with systematic policy reviews every two years.
In forecasting implications for Singapore in response to Indonesia's recent elections, an intricate mosaic of patterns emerges—spanning assertive defense intentions to potentially redefined trade relationships and heightened environmental accountability. The synthesis of these elements informs a robust strategy that accounts for dynamic realignments and ensures Singapore's readiness to navigate the prospective geopolitical transformations that may preside in the ASEAN theatre.
NA Preparation
Material Facts in the Context of Indonesia's Presidential Elections and Regional Geopolitical Dynamics
Critical Evaluation of Indonesia's Presidential Elections
Prabowo Subianto's election win brings his past into the spotlight, including his association with the Suharto regime and implications for Indonesia’s civil-military relations. Engagement with concrete historical precedents is necessary to anticipate his administration's potential policy trajectory, given his previous nationalistic stance and defense priorities.
Empirical fact: Prabowo secured close to 60% of the national votes according to preliminary quick count data provided by the General Elections Commission, avoiding a second election round and indicating popular support for his political agenda.
Electoral mechanics dictate that a pair must obtain an absolute majority vote with a geographical spread across provinces. This requirement points to the importance of regional support in shaping a president's domestic mandate, which could influence Prabowo’s future geopolitical moves and their ramifications for Singapore and ASEAN.
Material empirical facts: East Java's considerable influence, with 127 out of 580 parliamentary seats, underscores the province’s political weight. This demographic element bears significance when forecasting potential policy reforms or geopolitical pivots post-election.
Economic Foundations and International Implications
Election-related expenditures, as per Bank Indonesia’s reports, slightly lift economic growth forecasts, suggesting a perceptible though short-term macroeconomic impact of electoral activity. Factual evidence: economic growth projections for 2024 range between 4.7% to 5.5%, a modest increment from the 4.5% to 5.3% forecast for 2023.
Material fact: Indonesia’s tobacco industry, contributing around 10% to state revenues and experiencing heightened demand during elections, could impact domestic economic policy and thus influence international trade dynamics, including negotiations with trading partners like Singapore.
Empirical data on monetary maneuvers by Indonesia’s central bank, with the benchmark 7-day reverse repurchase rate holding at 6.00%, offer insights into the strategic financial setting and its influence on regional economic equilibrium.
Statistically underpinned trends in financial markets, with the rupiah's stability post-policy announcement at around 15,640 per dollar, establish an economic milieu that will inform Jakarta’s diplomatic and trade relationships, influencing ASEAN strategic economic cooperation.
Infrastructure Projects and National Sovereignty
Empirical data: The Jakarta-Bandung railway, rejecting state budget collateral for cost overruns, epitomizes Indonesia's assertion of sovereignty in strategic sectors. This stance may prompt comparable expectations in bilateral projects involving ASEAN nations and external partners, and have an echoing effect on future diplomatic and trade agreements with Singapore and other neighbors.
Defense Capacities and Security Dynamics
A statistically rooted fact: Indonesia's defense budget for 2024 sits at 139.1 trillion rupiah (US$9.27 billion), amounting to 5.6% of total expenditure. These figures become critical material facts when evaluating Indonesia’s defense strategy vis-à-vis ASEAN defense collaboration frameworks, with direct implications for Singapore’s national security policies.
The commitment to enhance naval capacities, proposed by election candidate Ganjar Pranowo to reach 2% of GDP, might signal a shift towards maritime security strengthening, impacting ASEAN's collective defense narrative and Singapore's role therein.
Sociopolitical Dynamics and Democratic Processes
Regulatory changes by the Indonesian Electoral Commission have implications for the representation quotient within Indonesia’s governance structure. Material fact: the adjusted candidate quota mechanism could lead to non-compliance in up to 18% of party lists, which poses questions on gender representation and may affect democratic credentials within ASEAN forums.
Social and governance shifts, particularly in women’s political representation, could potentially factor into Indonesia’s international identity and regional leadership credibility, influencing ASEAN’s collective position on democracy and human rights.
Investment Reallocation and Supply Chain Impact
Market recalibration with emerging investments favoring Indonesia signals a shift in the balance of power within regional economic structures. Material fact: The MSCI Asia Pacific ex-Japan equity index's decline by 1.8% can serve as an indicator of investor sentiment, which can reshape economic alliances, including those pertinent to Singapore’s strategic investments and supply chain dependencies.
Indonesia's enhanced diplomatic posturing, visible in hosting international forums like the G20 amidst global crises, can be quantified as an increase in its influence within the ASEAN bloc. The implications extend to the recalibration of geopolitical alliances and Singapore's foreign policy orientation.
Force Catalysts
In conducting a comprehensive analysis of Force Catalysts in the wake of the Indonesian elections with an emphasis on their wider geopolitical ramifications, particularly in relation to Singapore, a multi-dimensional and in-depth appraisal of Leadership, Resolve, Initiative, and Entrepreneurship merits further investigation to envisage the full spectrum of potential outcomes within the regional matrix.
Leadership
Prabowo Subianto's ascension to Indonesia's presidency would introduce leadership variables poised to recalibrate Indonesia's diplomatic coordinates. His background as a defense minister and a military figure suggests potential for a leadership typology anchored in a hard-power orientation. The historical texture of then-Colonel Prabowo's strategic thinking during the Dili massacre, in conjunction with his geopolitical rhetoric across narratives over the years, portends a predisposition towards a robust national defense policy that could nudge Indonesia's defense spending closer to the proposed 2% of the GDP, as voiced by his administration. Given that Singapore is in the midst of expanding its own military capabilities, with an emphasis on digital warfare and Total Defence, the potential alignment or divergence between the defense policies of the two states could shape the dynamics of ASEAN’s collective security stance.
Prabowo's influence runs deep, as evidenced by his ability to integrate Golkar and other parties into his coalition. It will be crucial to project how his leadership style, shaped by aforestated ideological convictions and bilateral party positionings within the Indonesian political landscape, could affect Indonesia's alliances, particularly as juxtaposed with Singapore’s pragmatic diplomacy, which seeks to finesse its relations amidst a fluid regional geostrategic milieu.
Resolve
Diving deeper into the concept of Resolve, it is pertinent to parse Indonesia's innate resilience in navigating geopolitical currents. The steadfast commitment exhibited by Indonesia to retain control over strategic initiatives, as exemplified by its negotiations surrounding the Jakarta-Bandung high-speed rail project, reverberates across economic, military, and diplomatic salvos. A layered examination into the index of Indonesia's persevering determination to uphold an independent foreign policy posture indicates a potential realignment that motivates a Southeast Asian bloc increasingly independent of overbearing power influences. This resolve will be particularly delineated in Indonesia’s maritime policies, as the state asserts its jurisdiction in the Natuna Sea and enhances naval capabilities. For Singapore, positioned significantly while reliant on maritime trade routes, this Indonesian assertion of independence and maritime resolve bears significant implications for regional security and trade policies.
Furthermore, this resolve is not divorced from leadership; Prabowo's reputation for championing indigenous industry and defense capacities could embolden Indonesia's assertive undertones. This dynamic of fortified resolve will likely steer Singapore to recalibrate its diplomatic engagement strategies and to fortify its status as an impartial hub in the midst of emerging regional frictions.
Initiative
Parsing the catalyst of Initiative involves mapping the cross-sectional influence of Indonesia’s independent economic actions onto the geopolitical chessboard. The nation’s infrastructural endeavors, typified by the high-speed railway project that resolutely excludes the usage of the state budget as collateral, demonstrates Indonesia's initiative to sustain economic sovereignty. This template of proactive economic liberation could preface a reallocation of Southeast Asian economic zones and a redefinition of bilateral trade policies, particularly as they concern Singapore, which is heavily invested in efficient regional supply chain mechanisms.
Singapore, through its own initiative in infrastructure ventures like reinforcing its role in the global value chain through the development of a Special Economic Zone with Malaysia, will need to position its play vis-à-vis Indonesia's emerging economic consortia, acknowledging Indonesia's demonstrated penchant for independent and sovereign economic navigation. The nuanced calibration of Singaporean strategies in response to the initiative taken by Indonesia will not only reflect on bilateral relations but also shape the contours of broader regional economic integration.
Entrepreneurship
Observing the entrepreneurship factor through the lens of Indonesia's progressive stride into the digital age and innovation, a profound contemplation of the repercussions for regional entrepreneurship ecosystems is warranted. Indonesia’s diversification of economic portfolios to include growth sectors, such as the burgeoning EV market and the rise of digital financial services, poses fertile ground for Singaporean investment and technology exchange. As Indonesia nurtures innovative capacities and entrepreneurial ventures, modalities of collaboration, economic tethering, and strategic reciprocity with Singapore are likely to materialize across border investment frameworks.
What ought to be foreseen is the emergence of a collaborative synergy between the innovation-driven entreprenurial shifts within Indonesia and Singapore’s own dynamic technologically-led economy. The propitious ripple effects of such entrepreneurial augmentation could concurrently foster a technological renaissance across the ASEAN bloc, particularly influencing the trajectory of regional governance standards in terms of competitiveness, innovation, and economic vitality.
Synthesis and Strategic Projection
The rigorously detailed exploration of the force catalysts indicated above manifests a complex geopolitical theatre wherein the inter-catalyst dynamics singularly and in concert propagate scenarios influencing regional alignments—thus reshaping the strategic calculus vis-à-vis Singapore and larger ASEAN. The comprehensive assessment, enriched with nuanced technical facets, spans iterative historical analyses, integrates current political dispositions, and foreshadows prospective policy inclinations with a far-reaching lens. Unspooling this coil of intricate geopolitical threads sets the groundwork for discerning Indonesia’s forthcoming post-election navigational chart in the geopolitical realm and Singapore's consequent strategic imperatives, fostering analytical synthesis of intelligent and actionable geopolitical insights that accord with the overarching objectives of net assessment.
Constraints and Frictions
Crucial to the holistic Net Assessment of geopolitical and military strategies, it is pivotal to methodically dissect the Constraints and Frictions manifesting within Indonesia’s sociopolitical and economic arenas, particularly in the milieu of its impending presidential elections. The anticipatory analysis herein integrates the political, economic transition dynamics and the consequential geopolitical realignment prospects for Indonesia to foster an understanding of how future relations with key global actors, especially Singapore, may either entrench or pivot.
Epistemic Constraints significantly delineate the scope and substance of Indonesia's geopolitical strategies. Historically, misinformation campaigns, like those observed during the 2019 Indonesian elections, impeded the electorate's understanding and bore the potential to skew political outcomes and strategic alliances. The use of bots and fake news to propagate narratives serves as a prime example wherein Indonesia experienced interference that had tangible strategic repercussions. To counter such epistemic manipulation, intelligence vetting processes have been bolstered, incorporating digital forensics and cross-referencing with credible intelligence sources. The approach amalgamates both human expertise and sophisticated algorithmic data analysis to discern disinformation patterns and validate intelligence.
The hitherto undertakings identified Spatial Constraints in the form of infrastructural developments like the Jakarta-Bandung high-speed railway and the proposed move of the capital city to East Kalimantan, manifesting as strategic pawns in Indonesia’s geopolitical chessboard. The sheer scale and cost of these infrastructure projects – Jakarta-Bandung resulting in a reduced initial guarantee-request to maintain sovereignty – coalesce strategic vision with tangible diplomatic outcomes. They have historically induced shifts in geopolitical relations through the augmentation or diminution of economic interdependency and strategic leverage observed in comparable scenarios such as Myanmar's Kyaukpyu port development or the renegotiation of terms in Malaysia's East Coast Rail Link project.
Resource Constraints, fused with current global economic conditions, are forecasting to significantly sway Indonesia's fiscal trajectory. Projections by Bank Indonesia, envisaging economic growth between 4.7% to 5.5% in 2024, a modest uptick from the preceding year's forecasts, potentially alter the nation's ability to finance strategic initiatives, such as bolstering defense spending to 2% of GDP, as suggested by candidate Ganjar Pranowo in the presidential debates. These anticipated fiscal capacities directly impact the resources allocatable towards geopolitical negotiations and alliance formations.
Informational Frictions present the dual-edged sword of digital era proliferation. The omnipresent cyber threats and information warfare comprise pivotal considerations in modern geopolitical strategies. The digital weaponization, encapsulated by the recorded instances of cyber espionage in the South China Sea tensions, underscores the escalating necessity for robust cyber defense mechanisms. Indonesia's evolving information security protocols mirror the dynamic geopolitical landscape's exigencies.
In the analytic prism of Cognitive Constraints, the influence of nationalistic education narratives and controlled media framing can enforce a geopolitical path dependency. The psychological operations perpetuated by domestic and external actors have historically shaped policy-maker perceptions, contouring strategic decisions. Indonesia's own navigation through the South China Sea disputes showcases the impact of entrenched national narratives on foreign policy. Institutionalizing critical thinking in educational curricula and encouraging media plurality are amongst the pre-emptive strategies to dismantle detrimental cognitive dispositions.
The discourse on Regulatory and Legal Constraints reveals that Indonesia’s adherence to regional treaties, such as the ASEAN Treaty, the proposed Code of Conduct for the South China Sea, and bilateral agreements with neighboring Singapore, can precipitate economic and diplomatic incidents. The ASEAN Treaty, for instance, while fostering cooperation, also restricts unilateral action against member states, evidenced by the constrained response to the Myanmar crisis. Countermeasures to these constraints involve diplomatic fortitude to navigate through complex multilateral engagements and judiciously balancing national sovereignty against collective regional interests.
Temporal Constraints demand introspection into Indonesia's political cycles. A retrospective analysis underscores that the nation's strategic positioning oscillates following the presidential terms—with Jokowi's administration instilling an assertive yet non-aligned foreign policy approach. Pondering over the future, the evolving patterns of technological advancements in AI and quantum computing warrant incorporation into Indonesia's strategic forecast. These transformative technologies are anticipated to redound upon economic conditions, military capabilities, therefore forming a fulcrum upon which Indonesia’s leverage may pivot.
A comprehensive analysis of Political Frictions elucidates the implications of party dynamics—in Indonesia, the allegiance of political entities often gyrates post-elections, with the legislative outcome shaping the political landscape. The recent coalition forming an undercurrent as Prabowo emerges triumphant demonstrates the partisan propensity for realignment—an echo of the strategic calculus that routinely manifests in the nation’s geopolitical fabric. The historical analysis of party ideologies, their policy inclinations, and geopolitical tendences presents a complex tapestry where continuity or reform scenarios can be extrapolated.
Probabilistic and Scenario-based Approaches in the analysis yield multifaceted potential futures—each accordant with the interplay of the nation's internal constraints and external frictions. The probability-based scenarios could envisage Indonesia gravitating towards either a tightened US alliance framework, accentuating maritime presence, or aligning with China's Belt and Road Initiative, consequently influencing regional trade dynamics.
Leveraging Evidence and Example Integration, the potential fulcrum of Indonesia’s shift in capital serves as a premiere example for articulating potential shifts in geopolitical dynamics. Similar such strategic shifts scrutinized in other nations reflect changes in international trade patterns, military alignments, and indeed, regional governance equations.
In absorbing the feedback into the current analysis while emphasizing Iteration and Feedback mechanisms, a dynamic and cyclical process of re-evaluation is instituted to constantly refine perspectives. The persistence of emerging geopolitical events and governance trends across the region are integrated within the analysis framework to remain responsive to an intricate geopolitical landscape that remains in a state of pronounced flux.
A synthesis of the aforementioned multi-dimensional analysis thus composes the complex tableau of Constraints and Frictions impacting Indonesia’s potential geopolitical alignment—a nation perpetually at the confluence of domestic decision-making vibrancy and the ceaseless undercurrents of global power dynamics.
Alliances and Laws
The Indonesian presidential elections possess profound implications for the geopolitical landscape, especially in relation to the nation's alignment or realignment with major global powers and blocs, and the subsequent repercussions on regional governance and interactions, particularly with Singapore.
The electoral victory of Prabowo Subianto as Indonesia's president carries the potential for both continuity and change in Indonesian foreign policy. Prabowo's established coalition, including Golkar, Gerindra, and PAN, may be suggestive of a stable governing body with historical ties, indicating a possible preference for maintaining traditional alliances and established foreign policy paradigms, as well as a potential to utilize these alliances to ensure political stability internally and realize infrastructural ambitions without heavily relying on increased debt. However, his previous runs against Jokowi and the subsequent incorporation into Jokowi's cabinet reflect an adaptive political strategy that may be employed in international relations as well.
Scenarios for geopolitical ramifications should be evaluated in several dimensions, such as:
U.S. and Western Relations
Prabowo's administration may continue leveraging existing relations with the West while navigating issues such as defense spending intentions, economic diplomacy, and adherence to democratic norms. The business community's expectation for economic policy continuity irrespective of the electoral outcome may indicate a degree of inertia in relations with the West, with investments like Micron's semiconductor facility in India showing the complexity of regional interdependencies.
Influence in Southeast Asia
Indonesian elections could signal ongoing balancing act in the regional governance structure, influenced by the domestic importance of the tobacco industry, infrastructure projects like the Jakarta-Bandung high-speed railway, and economic indicators like Bank Indonesia's projection of growth. The central role of ASEAN and the intent to preserve sovereignty while engaging with foreign partners, as seen with the Jakarta-Bandung railway project and renegotiations of Malaysia's East Coast Rail Link, underlines Indonesia's desire to dictate its terms in the international arena.
Relations with China and the Indo-Pacific
The Jakarta administration may continue its approach of not aligning explicitly with major powers, despite acknowledging the strategic location of Southeast Asia and regional integration through special economic zones and initiatives like the Singapore-Malaysia SEZ. The tensions around the South China Sea, and Indonesia's role therein, could evolve depending on Prabowo's defensive postures and ASEAN's collective strategies. Matters like China's new map claim and the Code of Conduct align with broader international laws such as the 1982 UN Convention on the Law of the Sea.
Singapore-Indonesia Relations
Given the discussions about the Special Economic Zone and the passport-free travel system, economic relations between Singapore and Indonesia are poised to become even more integrated, potentially exceeding the current levels witnessed at the Causeway and fostering economic activities benefiting both countries. The inclination of Johor's leadership to indulge in business-oriented pursuits may also spill into stronger bi-lateral or multi-lateral cooperative frameworks impacting the wider region, with the prospect of a streamlined Singapore-Johor RTS Link doubling the number of retail visitors, and an integrated HSR system further smoothing international connectivity.
Democratic Processes and Stability
Allegations of nepotism regarding Gibran Rakabuming Raka and overarching concerns about Indonesia's democratic processes could influence domestic legitimacy and international perceptions. Governance concerns and the nature of military support in Prabowo's regime will evoke scrutiny from international observers, impacting the relational dynamics particularly with democratic nations.
Economic Frameworks
Indonesia's economic frameworks like the quota system for women's political representation and the importance of SMEs for defense, signifying inherent gender dynamics and indigenous industries, also reference the internal economic policies that could factor into broader geopolitical relations.
In the context of Singapore, closer economic and infrastructural integration may enhance functional cooperation, elevate mutual economic gains, and strengthen Singapore's positioning within the regional influence matrix. Nevertheless, these developments must be tempered with consideration of the potential impacts on regional security outlooks, immigration controls, and the integrity of national and regional market economies.
It is imperative to further investigate the nuances in political rhetoric, domestic discord, and sentiments towards foreign nations, which may shape underlying public opinion incidental to Prabowo's administration. The inflection points evident through the campaign, the new vice-presidential dynamics, and the business community's anticipations could yield critical insight into upcoming foreign policy guidelines and the subsequent orchestration of Indonesia's geopolitical position within the ASEAN bloc and beyond.
Conclusively, a Net Assessment approach requires continuous monitoring of these variables, an examination of intentions versus outcomes, and agility in updating strategic foresight as the relationships between alliances and laws evolve in the new Indonesian political dispensation.
Information
- Perry Warjiyo, Governor of Bank Indonesia, suggests the presidential and legislative elections will contribute to the country's economic growth.
- There are three pairs of candidates in the election: Anies Baswedan with Muhaimin Iskandar, Prabowo Subianto with Gibran Rakabuming Raka, and Ganjar Pranowo with Mahfud MD.
- A winning pair must secure over 50% of votes with at least 20% in more than half of Indonesia's 38 provinces.
- If no pair meets this criterion, the top two will enter a second round of voting in June.
- Aida Budiman, Bank Indonesia's deputy governor, says elections will boost economic growth via increased domestic consumption from household and government election-related spending.
- Mdm Rosalina's company, Mustika Tembakau Indonesia, experiences a 30% demand increase for products during elections, contributing to the 10% state revenue from the tobacco industry.
- East Java is the main cigarette producer in Indonesia.
- The Westminster constitutional monarchy system in Malaysia is unlikely to change and the new king is expected to engage more directly with the public.
- The king is expected to weigh in on public welfare and government service delivery, and advocate for projects including the high-speed rail project between Kuala Lumpur and Singapore.
- The rotational monarchy system is established in Malaysia since 1957 and considered above politics.
- The Jakarta-Bandung high-speed railway in Indonesia, backed by China, prioritized sovereignty by rejecting China's demand for using the state budget as collateral for cost overruns.
- Funding for the railway project was contested by China and Japan; Indonesia insisted on not providing a state budget guarantee to maintain its sovereignty.
- The high-speed rail project demonstrates Indonesia's intent to keep control over its initiatives, a trend growing in Southeast Asia.
- Malaysia's East Coast Rail Link faced renegotiation for more equitable terms with China, reducing costs from an initial US$16 billion to US$11 billion.
- Southeast Asian countries are keen to protect their interests in geopolitics, without aligning with any major power explicitly.
- A Memorandum of Understanding (MOU) between Singapore and Malaysia aims to develop a legally binding agreement for a Special Economic Zone (SEZ).
- Proposed initiatives include expeditious clearance at land checkpoints and renewable energy cooperation.
- Passport-free travel and digitized cargo clearance in the SEZ could significantly increase economic activity and integration between Johor and Singapore.
- The Causeway, one of the world's busiest land checkpoints, sees around 200,000 daily commuters.
- Passport-free travel raises questions about immigration access within Malaysia but is expected to be hassle-free for SEZ access.- Indonesia obtains approximately 10% of its state revenue from the tobacco industry.
- Health warnings are displayed on cigarette packages, with consumption choices left to consumers.
- East Java is the primary producer of cigarettes in Indonesia.
- Bank Indonesia (BI) kept policy rates steady to stabilize the rupiah and maintain inflation targets.
- The benchmark 7-day reverse repurchase rate remained at 6.00%, unchanged since October and in line with economists' expectations.
- Governor Perry Warjiyo noted a stabilized rupiah and the potential end of tightening cycles by advanced economies.
- BI anticipates the U.S. Federal Reserve to ease rates by 75 basis points in the second half of the year.
- BI's next policy moves depend on the strength of the rupiah, inflation rates, and economic growth.
- The rupiah was stable after the announcement, trading around 15,640 per dollar.
- The inflation target for 2024 is between 1.5% to 3.5%, compared to a 2% to 4% target in 2023.
- Indonesia experienced a slowdown in economic activities last year, with Q3 GDP growth at its weakest in two years.
- BI projects economic growth in 2024 will be between 4.7% to 5.5%, a slight increase from the 4.5% to 5.3% forecast for 2023.
- Economists predict BI's next move could be a rate cut, with the timing dependent on the rupiah's stability.
- Bank Danamon expects a 50 basis points cut from BI this year, despite concerns about a widening current account deficit.
- Regional security concerns in Asia involve North Korea's provocative actions and growing Chinese military presence in the South China Sea.
- Improved Japan-South Korea relations are partially a reaction to China's regional actions.
- The Camp David summit signals closer cooperation between Japan, South Korea, and the U.S. in response to regional tensions.
- Japan and South Korea share common security interests and are moving towards stronger defense collaboration.
- The summit marks the first step towards a formal security framework and more frequent national security coordination.
- Japanese firms support a defense spending increase amidst regional tensions, with 81% favoring a rise to 2% of GDP.
- The yen's drop to around 146 per dollar has caused concern among Japanese companies, with 50% expecting profit damage.
- HSBC plans to tighten risk management at Hang Seng Bank due to economic challenges in China and potential increased bad loans.
- Hang Seng's top executives will join HSBC Asia-Pacific risk management discussions, aiming to implement the strategy this year.
- HSBC focuses on Asia for growth, committing $3.5 billion in 2021, while Hang Seng's non-performing loan ratio increased in recent quarters.- Apple remains tied to China due to integrated supply chains that can't be easily severed, despite geopolitical issues.
- Southeast Asia's open trade policies and strategic location have fostered global integration and investment.
- Morowali, with US$5 billion to US$6 billion investment flowing yearly, is now a hub for companies collaborating in the production of batteries for electric vehicles (EVs).
- Indonesian President Jokowi launched the country's first EV assembled by Hyundai in 2022, highlighting South Korea's involvement in battery production in Indonesia.
- BYD and Wuling, both Chinese EV makers, are establishing operations in Indonesia, with Tesla also in investment talks.
- Jakarta favors diversified global partnerships and does not exclude China from initiatives, particularly given Western countries are 10-15 years behind China in nickel processing technology.
- A Code of Conduct for the disputed South China Sea is urged by ASEAN and China to align with international laws such as the 1982 UN Convention on the Law of the Sea.
- ASEAN and the US are aimed to enhance cooperation, with the US demonstrating support in green energy transition and cybersecurity.
- Vice President Kamala Harris represented the US, instead of President Joe Biden, attending the G20 Summit in India, committed to ASEAN centrality and establishing the ASEAN-US Center in Washington DC.
- China has released a contentious new map claiming large areas of the South China Sea, opposed by Malaysia, Vietnam, Indonesia, and the Philippines.
- Japan and the ADB, via JICA, are set to launch LEAP 2, a fund of up to $1.5 billion to boost private infrastructure in Asia-Pacific, countering China's influence.
- Sumatra, an Indonesian island with 60 million residents, holds 127 out of 580 seats in the national parliament and is a critical region in Indonesian politics.
- The political landscape in Indonesia suggests potential horse-trading post-elections, with parties aligning based on the possible benefits rather than ideologies, and potential collaborations with the likely presidential winner, Mr. Prabowo.
- India's trade policy remains largely unchanged despite the global economic shift due to the pandemic and is criticized for lacking a strategic approach to becoming a major trading nation.
- ASEAN's growing prominence in the Indo-Pacific is marked by increased diplomacy, particularly in the South China Sea.
- Cambodia, Brunei, and Laos, all ASEAN members, were the only countries in the study to show gains.
- Southeast Asian nations are recognized as highly networked and diplomatically active, countering the notion of being inactive among greater powers.
- Indonesia showcased increased diplomatic influence; it hosted the G20 summit amidst the Ukraine crisis and took a firm stance on Myanmar's coup.
- Japan, as Asia's third most powerful country, faces declines in wealth, economic size, and technology, affecting its regional influence.
- India is described as an "underachiever" with steady declines but retains potential for future economic and military influence.
- Russia, fifth in Asian power ranking, shows a significant drop in diplomatic influence after its actions in Ukraine.
- Competition between the US and China is expected to persist, with both maintaining significant advantages.
- Political dynamics in Indonesia involve strategic coalition formation and the notion that political parties prioritize benefits over ideologies.
- Indonesian politics are seen as accommodating and flexible, with room for different parties to join coalitions post-elections.
- Indonesian President Jokowi's support for Prabowo Subianto introduces visible presidential endorsement, similar to practices in U.S. politics.
- Jokowi's actions, which some argue resemble campaigning, mark a shift from the neutrality exhibited by prior two-term President Yudhoyono.
- East Java, the second-largest voter pool in Indonesia, is considered a critical province in elections, with all past winning presidential candidates securing it.
- The support of Islamic groups, particularly the large Nahdliyin segment, is deemed essential in winning East Java.
- The endorsement and campaigning of outgoing presidents in the U.S. have similarities to Jokowi's support for Prabowo in Indonesia.
- Notable U.S. presidential endorsements include Obama campaigning for Clinton (2016), Bush for McCain (2008), Clinton for Gore (2000), and Reagan for H.W. Bush (1988).
- East Java's political landscape is heavily influenced by the governor's endorsement, local politicians, and the popularity of the incumbent president.
- In parliamentary elections, Indonesian celebrities are increasingly featured on ballot papers, raising concerns about the sidelining of less famous party members.- When COVID-19 disrupted supply chains, Singapore diversified by importing prawns from Saudi Arabia and formed new partnerships in sectors like technology, sustainability, and info-communications.
- Societies worldwide have grown multicultural due to globalization, with the Middle East particularly influential in religion.
- Muslims in the Middle East and North Africa make up 20% of global Muslim population; Indo-Pacific has the largest number, at 62%.
- Top countries by Muslim population: Indonesia (12.6%), India (11.1%), Pakistan (10.5%), Bangladesh (8.2%).
- Religious teachings in the Middle East shape global Islamic practice.
- Aspiring Islamic religious teachers from Singapore and the Indo-Pacific study in the Middle East and North Africa.
- Since 2008, Singaporean secondary students can learn Arabic to strengthen ties and understanding of the Arab world and Islam.
- The Middle East inspires efforts in the Indo-Pacific against violence and terrorism, and for religious tolerance and understanding.
- Indo-Pacific and Middle East have cultural commonalities and historical relations, including trade and religious ties.
- Historical examples of connection include the 1998 discovery of a shipwreck off Belitung, Indonesia.
- Singapore aims to import 30% of its energy needs, involving trade-offs between security, affordability, and sustainability.
- Plans to create an ASEAN power grid aim at energy security, with 100MW links with Indonesia and Malaysia providing a small but significant part of Singapore's electricity demand.
- Megawati Soekarnoputri's tenure as Indonesian president from 2001-2004 featured her husband as 'first man' and involved figures like Mdm Ani Yudhoyono, focused on children's education, and Mdm Iriana Joko Widodo, who recently was reported to have influenced her son's vice-presidential candidacy.
- Indonesian parliamentary elections feature celebrities as candidates, raising concerns about party dynamics and vote garnering.
- Jokowi's family, despite Jokowi's rejection of the label of a political dynasty, are involved in politics, with his children running for office without apparent favoritism, but with public image challenges.
- Micron Technology's agreement to build a semiconductor facility in Gujarat, India, highlights challenges faced by foreign investors, including infrastructure and regulatory hurdles.- PAN in Indonesia hosts celebrity MPs like Eko Patrio, Primus Yustisio, and Desy Ratnasari running for re-election.
- Celebrity presence doesn't ensure election victory, evidenced by failed candidacies of Katon Bagaskara, Ahmad Dhani Prasetyo, and Dedi "Miing" Gumelar.
- Celebrities are often used to garner attention for political parties, as per Mdm Khoirunnisa of Perludem.
- Billboards and banners of presidential and parliamentary member candidates are widespread across Indonesia ahead of the Feb 14 general elections.
- Notable candidates include seasoned politicians like Mdm Eva Kusuma Sundari, former regional leaders like Mr Dedi Mulyadi, and politicians with notable parentage like Mdm Siti Hediati Haryadi.
- Party-hopping, derogatorily called "Kutu loncat," is prevalent in Indonesia, despite its negative perception.
- India and Malaysia enacted laws to counteract party-hopping, but Indonesia's Constitutional Court repealed such a law in 2013.
- Party-hopping is influenced by factors like internal conflicts and conflicting ambitions within political parties.
- Political analysts and election law experts suggest that parties should reform internal mechanisms rather than restrict party-hopping.
- The 2011 Indonesian law on political parties lacks clarity and transparency in the nomination process.
- Total Defence in Singapore encompasses military, civil, economic, social, psychological, and digital defences against various security challenges.
- Global security concerns have pushed defense spending to a record US$2.2 trillion in 2023.
- Questions arise about the value and cost-effectiveness of defense, especially during peacetime in Singapore.
- Total Defence is woven into international engagement, supporting a rules-based global order, and underpins economic stability.
- The foundation of Total Defence contributes to national identity, social integration, and Singapore's principled stands on international issues.
- Southeast Asian nations are benefiting from military engagements with both the PLA and the US, despite varying depth and substance.
- ASEAN nations maintain a balancing act regarding the Sino-US rivalry, avoiding being proxies for great powers.
- Military engagements with China are seen as an attempt to promote a China-led security order in the region.
- The COVID-19 pandemic has highlighted the interconnectedness across countries, according to Senior Minister Teo Chee Hean.
- It is essential to revitalize traditional relationships and explore new cooperation areas.
- The global economic center of gravity is shifting towards the Indo-Pacific and Middle Eastern regions.
- Similarities in external and internal changes across the Indo-Pacific and the Middle East create opportunities for fruitful engagement.
- Economic partnerships, religious exchanges, and people-to-people interactions are key areas of collaboration between the regions.
- The GCC-Singapore FTA, effective since 2013, exemplifies growing and diversified trade relations with the Gulf Cooperation Council.- Johor Bahru (JB) malls like Mid Valley Southkey have introduced new offerings, attracting crowds from across the Causeway.
- Retail market in JB estimated to be attracting around 40,000 Singaporean visitors daily.
- Singapore-Johor RTS Link, due for completion in 2026, could double retail visitor numbers.
- Currently, about 320,000 people cross the Causeway between Johor and Singapore daily.
- Mdm Nur Hafizah, a Singaporean teacher, considers malls like Mid Valley Southkey and Toppen Shopping Centre as family go-to choices for activities and dining.
- JB’s retail market suffering from strata title ownership issues and oversupply, with 19.3 million square feet of retail space, or 11.2 square feet per capita, causing consumer selectiveness.
- Klang Valley has 77 million square feet of mall space, equating to 9 square feet per capita.
- Well-located malls with international brands succeed, while others struggle due to poor location and concepts.
- Skepticism exists among locals about the competition from local hypermarkets against new entrants like Mustafa.
- JB Waterfront City Mall, in a dilapidated state, is flagged for safety concerns and may be redeveloped.
- Redevelopment complexity arises from multiple property ownerships; government-led compulsory acquisition is suggested as a solution.
- Retail mall industry in JB overall remains a challenge, with poor structural design affecting functionality.
- Potential repurposing of defunct malls into office or residential spaces is discussed.
- Singaporean Nicholas Lee reminisces about past attractions like cheap indoor paintball at deserted Danga City Mall.
- Progress on a special economic zone, possibly at Forest City, to be updated at the Singapore-Malaysia Leaders' Retreat; no clear timeline available.
- Concerns raised over the viability of a special financial zone (SFZ) as the Forest City's devolvement has been slow, and the developer Country Garden faces a debt crisis.
- SFZ's success depends on federal government support and infrastructure establishment.
- Eastern Corridor Economic Region SEZ, set up in 2009, failed to meet expectations and did not sustainably benefit local businesses.
- Special zones' role in achieving high value-added economic growth is questioned.
- Malaysia's Forest City faces challenges in appealing to Singapore firms due to construction delays and financial concerns.
- Country Garden Malaysia's financial strength is asserted, while concerns over the parent company's status persist.
- Industry players favor mature industrial parks over new, uncertain financial zones.
- Experts suggest the transition from a residential project to a financial zone for Forest City may be difficult.
- Singapore and Malaysia signed an MOU to develop the SEZ framework, focusing on expedited checkpoint clearance and renewable energy cooperation.
- Analysts suggest passport-free travel within SEZ could revolutionize the economic relationship between Johor and Singapore, potentially outperforming regions like Shenzhen and Hong Kong.
- Efficient movement across the Causeway seen as essential for the success of the SEZ.- Women's barriers to election remain unchanged; only incremental progress is expected.
- Women politicians played a crucial role in passing the Anti-Sexual Violence Bill last year.
- Gender issues not central to Indonesian presidential or legislative campaigns.
- A rule change by the Indonesian Electoral Commission (KPU) in April 2023 affects women's candidacy quota; parties can now round down fractions under 0.5.
- The 30% candidate quota for women will not be enforced district-wise but for total women candidates per party.
- This change came despite a Supreme Court decision against it and could lead to non-compliance in up to 18% of party lists.
- The new regulation might not drastically affect election outcomes but sets a negative precedent for women's representation.
- KPU's actions reflect erosion of democratic institutions by the political elite.
- Sally White, research fellow at Australian National University, comments appeared in The Conversation.
- U.S. inflation surprise impacts global markets, hints at Fed rate hike delay, and weakens U.S. soft landing hopes.
- MSCI indexes decline, bond yields surge after higher-than-expected U.S. CPI data.
- Offshore yuan may sell, Japanese stocks and the Nikkei at a fresh 34-year peak despite equity selloffs globally.
- India to report wholesale price inflation, potentially impacting the rupee.
- Indonesia's presidential elections are underway; defense minister Subianto is a frontrunner.
- Allegations that Indonesian incumbent President Widodo uses public officers for campaigning.
- Indonesian election dynamics are fluid with potential for a second round.
- Central Java is a key region in Indonesia's elections, contributing 14% of the national votes.
- Ganjar Pranowo's tenure brought reform and development to the province.
- Political landscape in Central Java is dynamic with a large proportion of undecided voters.
- Business community prioritizes social harmony for supporting candidates.
- Minority group and undecided voter preferences may be decisive.
- Shifts in global supply chains create investment opportunities outside of China.
- Mutual funds and ETFs see outflows from China-focused investments, in contrast to inflows into EM ex-China funds.
- Top 10 China mutual funds experience over 40% asset drop since 2021 peak.
- GIC moves capital from China to countries like Mexico, India, Indonesia, and Vietnam.
- Investors show reluctance toward China-focused investments amid regulatory and political concerns.
- Reputational and compliance risks deter western institutional investors from China.
- China's pledge to increase stimulus measures observed for any potential impact on foreign investment inflows.- The Non-Aligned Movement (NAM) was founded in 1961 with a broad political range and a united stance against colonialism, imperialism, and the Soviet-American Cold War conflict.
- Core principles of NAM included anti-colonialism, anti-imperialism, sovereignty, territorial integrity, non-aggression, and non-interference.
- The movement faced dilemmas when deciding to take sides against powerful states violating core principles.
- Diverse membership led to unified stands against colonial rule and apartheid but failed to consistently oppose superpowers.
- NAM member states such as Cuba and Vietnam sided with Moscow, while others like Saudi Arabia leaned toward Washington, despite their association with NAM.
- The Non-Aligned Movement's diversity has led to challenges in exercising collective power, particularly highlighted during the Soviet invasion of Afghanistan in 1979.
- NAM's relevance decreased after the Cold War, as the world was no longer bi-polar. However, it celebrated its 60th anniversary and has 120 members to date.
- The Non-Aligned Movement faces challenges with the ongoing war in Ukraine as governments weigh economic consequences against picking sides.
- Non-alignment offers security advantages by allowing access to multiple arms suppliers illustrated by India's reliance on Russian weapons.
- Non-alignment continues due to strategic appeal amidst greater global integration, but it possibly weakens international norms and global security.
- Most NAM members condemned Russian actions in Ukraine but only Singapore imposed sanctions, indicating a reluctance to enforce norms against aggression.
-John Ciorciari suggests that NAM has missed an opportunity to defend core principles against Russia's aggression in Ukraine.
- Indonesian presidential candidates debated over defense, criticizing each other's policies and the purchase of second-hand military hardware.
- The defense ministry, led by Prabowo, plans to purchase used Mirage jet fighters from Qatar, despite budget constraints.
- Indonesia's defense budget for 2024 is 139.1 trillion rupiah (US$9.27 billion), 5.6% of total expenditure.
- Ganjar aims to prioritize naval capacity for Indonesia, proposing to increase the defense budget to 2% of GDP from the current 0.78%.
- South China Sea dispute was discussed; Anies insisted on collective ASEAN approach, while Ganjar pointed out difficulties due to various national interests.
- Prabowo emphasized military capability for the North Natuna Sea issue.
- Myanmar's crisis impacted ASEAN unity, leading to altering chairmanship schedule to ensure cohesion.
- ASEAN chairmanship demands require stable conditions, challenging under the current crisis in Myanmar.
- BRICS aims for cooperation among Global South countries, with Russia initiating it to balance Western economic power.
- BRICS and G7 blocs show opposing stances on global issues, with BRICS members not condemning Russia's actions in Ukraine.
- Indonesia maintains a non-interference policy, putting it at odds with BRICS anti-Western sentiment.
- Indonesia's economic associations with BRICS focus on economy and de-dollarisation, aiming to strengthen rupiah in international transactions.
- Indonesia's economy grew 5.0% in Q4 supported by domestic consumption, despite export challenges.
- Economic forecast for Indonesia in 2023 is 5.0%, consistent with past performance, focusing on moderation and diving into economic challenges, such as erratic electricity, logistics, and regulatory issues for investors.
- Micron Technology agreed to build a $2.75 billion semiconductor facility in Gujarat, India, revealing government efforts to overcome investment challenges.- Indonesian concerns over China include fear of Chinese workers taking jobs (8%), China's desire to annex Natunas waters (9.4%), China controlling Indonesia's economy (9%).
- A 2020 poll by a different institute showed that 26% of 1,203 respondents believed China-Indonesia relations could revive communism.
- There is potential for politicians and their supporters to use anti-Chinese sentiment to gain votes in the 2024 elections.
- The central government needs to address and mitigate issues resulting from Chinese-related industrial disputes to prevent worsening these sentiments.
- Deasy Simandjuntak is an Associate Fellow at ISEAS-Yusof Ishak Institute, Singapore, and an Assistant Professor at National Chengchi University, Taiwan.
- Aswin Lin is a PhD candidate at the International Doctoral Program in Asia-Pacific Studies, National Chengchi University, Taiwan.
- The commentary first appeared on the ISEAS-Yusof Ishak Institute's blog, Fulcrum.
- Sources cited include Economist, SCMP, Reuters, and Channel News Asia.- China graduates nearly twice as many STEM students as India and invests more in R&D and industries like robotics, AI, and biotech.
- Anthony Saich from Harvard Kennedy School views it as very difficult to shift industries out of China due to infrastructure such as roads, bridges, dormitories, etc.
- Foxconn employs about 200,000 workers at its plant in Zhengzhou, China, indicating the scale China offers to major companies.
- Apple can't easily shift production from China due to integrated global supply chains.
- Southeast Asia has integrated with the world through open trade policies and geographical advantage.
- Investments of US$5 billion to US$6 billion are coming in every year to Morowali, Indonesia, for the nickel industry.
- President Joko Widodo launched the first EV assembled in Indonesia by Hyundai in 2022.
- Chinese EV makers BYD and Wuling, as well as Tesla, are showing interest in the Indonesian market.
- Indonesian nickel could be processed by Chinese companies, made into EV batteries by South Korean and potentially Australian firms, and used in cars by American and Chinese manufacturers.
- Jakarta sees global partnerships as key to avoiding supply chain concentration.
- Western countries are 10 to 15 years behind Chinese technology in nickel processing.
- Indonesia produced 18.4 million tonnes of palm oil in 2022; 47% was used for biodiesel production.
- Both Prabowo-Gibran and Ganjar-Mahfud political tickets support Indonesia's role in EV battery production.
- Indonesia has 21 million tonnes of nickel reserves and is increasing nickel ore processing.
- Jokowi's policies have led to environmental costs like carbon emissions from coal-fired power plants, deforestation, and pollution.
- Anies-Muhaimin promises to balance environmental protection with economic development but lacks detailed policies.
- Indonesia is observed for whether it can meet climate goals, with G7 countries plus Denmark and Norway pledging US$20 billion for its decarbonisation.
- Asian markets responded to Chinese economic indicators and Indonesian central bank's interest rate decision on a report day.
- The MSCI Asia Pacific ex-Japan equity index fell 1.8%.
- Federal Reserve Governor Christopher Waller's comments on slow interest rate cuts affected market sentiment.
- Indonesian central bank's key interest rate predicted to remain unchanged at 6.00% with a cut expected in the third quarter.
- Global economic indicators and potential inflation from Red Sea shipping disruptions did not stir inflation fears among investors.
- Bank Indonesia expected to hold key policy rate at 6.00% on February 20-21, 2023, due to subdued inflation and a stable currency outlook.
- Economists anticipate a rate cut from Bank Indonesia in the second quarter of 2023.
- Indonesia's upcoming presidential election is not expected to significantly impact monetary or fiscal policies.
- Economic growth leading up to the Indonesian elections is driven by domestic consumption, from household spending and government election-related expenses.
- Businesses like cigarette companies see increased demand during election periods.- Economic challenges and regulatory changes necessitate banks to have broader perspectives, beneficial for HSBC and Hang Seng.
- China's national security doctrine may soon include Xi Jinping Thought on National Security, complementing existing doctrine pillars.
- China's Ministry of State Security is gaining attention for its assertive public commentary, raising investor concerns about the scrutiny of businesses with foreign ties.
- The Ministry's posts criticize pessimism towards China's economic growth, aiming to maintain financial security and may play a role in shaping economic national security policies.
- Despite potential negative impact on foreign investor confidence, Ministry expands social media presence; cites that other intelligence agencies like CIA and UK's MI6 are active online.
- Bank Indonesia is expected to hold its key policy rate at 6.00% during the Feb. 20-21 meeting due to low inflation and steady currency outlook, with first rate cut anticipated next quarter.
- Inflation in Indonesia remains within the central bank's target range, and the rupiah has outperformed many peers despite being down 1.4% against the dollar.
- Economists predict median rates to hold till end-March, followed by a 25 basis-point cut each quarter, ending the year at 5.25%.
- Societe Generale economist believes Bank Indonesia's first rate cut will follow the Fed's expected rate cut in May.
- Indonesia's monetary policy is influenced by the Fed's actions and focuses on foreign bond holdings, currency movement, and bond yields rather than inflation.
- A majority of economists foresee at least one rate cut next quarter, with varied predictions on new rates.
- The impact of Indonesia's presidential election on monetary policy is deemed limited, with continuation of current economic policies expected under Prabowo.
- Bank Indonesia anticipates elections to boost economic growth through increased domestic consumption.
- Three presidential and vice-presidential candidate pairs contest in the elections, with a second round possible if no pair wins outright.
- The election is expected to stimulate consumption, including government election-related spending and typical household expenses.
- Businesses like Mustika Tembakau Indonesia project increased production, reflecting election-driven demand despite health reminders on tobacco products.
- East Java is a key cigarette production region in Indonesia, contributing significantly to state revenue.- Approximately 200,000 travelers commute daily across the Singapore-Malaysia border.
- Economist Walter Theseira from SUSS raises concerns on immigration safety with passport-free border clearance.
- Internal boundaries may be logical for Malaysia, allowing access only to a Special Economic Zone (SEZ), distinct from access to the rest of Malaysia.
- A task force is set to update on the SEZ at the 10th Singapore-Malaysia Leaders' Retreat in Singapore later in the year.
- PM of Malaysia Anwar's announcement of a Special Framework Zone (SFZ) at Forest City may refer to the economic zone discussed between both countries.
- There is no confirmation from Singapore or Malaysia regarding the specific location of the SFZ and its development timeline.
- JBCCI's Mr. Low states SFZ’s viability depends on support from both federal governments and the zone being business-friendly.
- A similar economic zone, the ECER SEZ, created in 2009 in Malaysia, aimed at creating 220,000 jobs by 2020 and offered tax and duty exemptions but hasn't confirmed its success.
- Concerns exist over the actual benefits of past zones, particularly in creating high value-added sectors.
- Doubts loom over the SFZ at Forest City because of slow development and the financial issues of the developer, Country Garden Holdings, which is facing a debt crisis in China.
- A Country Garden Malaysia spokesperson expresses support for the SFZ, highlighting a stable financial situation in Malaysia.
- The financial health of Country Garden’s developments in Malaysia, including Forest City, is under scrutiny by investors due to Country Garden Holdings' financial challenges.
- Business sentiments lean towards preference for investing in mature industrial parks over new financial zones due to uncertainties.
- Malaysia’s proposed domestic High-Speed Rail (HSR) project between Iskandar Puteri and Kuala Lumpur is to be discussed, following the termination of the Kuala Lumpur-Singapore HSR project.
- The Singaporean government has paid over S$102 million in compensation due to the cancellation of the HSR agreement.
- Discussions continue about the feasibility and viability of a domestic HSR line and alternatives to the previous KL-Singapore HSR project, including the management approach without an AssetsCo as initially planned.
Under Mr. Prabowo's potential presidency, Indonesia is expected to:
- Court foreign investment for economic growth.
- Strengthen ties with China.
- Form a broad coalition in parliament.
- Risks transactional political alliances changing.
- The future of Indonesia is shaped by post-election dynamics between Mr. Prabowo and Mr. Jokowi.
- If Prabowo wins, a continuation of Jokowi's administration is expected.
- Dedi Dinarto, associate and lead Indonesia analyst at Global Counsel.
President Joko Widodo:
- Has not explicitly endorsed a candidate for the upcoming election.
- His approval ratings are just above 80%.
- Indonesian GDP grew by 5.2% from July 2022 to July 2023 with a 3% inflation rate.
- Corruption, informality, inequality still issues.
Candidate Prabowo Subianto:
- Leads in polls against Central Java governor Ganjar Pranowo and Anies Baswedan.
- Attracts Gen-Z and millennial voters with his maverick style and nationalism.
- Consults Jokowi on election strategy and promises policy continuity.
- A former army general with a contentious past.
Candidate Ganjar Pranowo:
- Struggles with his association to Megawati Soekarnoputri.
- Has made extensive concessions that concern Jokowi.
Indonesian presidential candidates:
- Promise a better investment climate and ease of doing business.
- Three expected to run: Baswedan, Pranowo, Subianto.
- Praise for Jokowi on investment and reform measures.
US-based Micron Technology plans:
- A US$2.75 billion semiconductor facility in Gujarat, India.
- US$825 million funded by Micron with the rest by India.
Polling in Indonesia:
- Offers a snapshot with margins of error.
- Possible variations in actual voter preferences.
- Anies Baswedan may perform better than polls suggest.
Concerns about ethnic discrimination and anti-Chinese sentiment:
- Persistent issues in Indonesian society.
- Political rhetoric that could cause societal rifts.
- Liam Gammon, Research Fellow, comments on Indonesia's future after the election.- Prabowo Subianto, former army general and Indonesia's defense minister, elected as Indonesia's eighth president.
- Prabowo secured almost 60% of the votes to avoid a second round.
- Over 200 million eligible voters participated across more than 17,000 islands and over 820,000 polling stations.
- The General Elections Commission will announce the official result on Mar 20; quick counts used since 2004 to determine the president on election day.
- Prabowo defeated candidates Anies Baswedan and Ganjar Pranowo, backed by Muslim conservatives and the PDI-P, respectively.
- This marks Prabowo's first victory after three attempts, having run previously in 2009, 2014, and 2019 elections.
- Post-2019 defeat, Prabowo became Jokowi's defense minister.
- Prabowo teamed up with Jokowi's son for the latest election, showing unpredictable political maneuvering in Indonesia.
- Prabowo's past includes accusations of human rights violations and ties to autocratic leader Suharto.
- Military support for Prabowo is uncertain; the military values its reputation for following law and constitution.
- The 2021 military coup in Myanmar serves as a warning for the risks of military involvement in politics.
- President Jokowi's popularity remains and may influence future politics via his son in the vice-presidency.
- Prabowo's victory could prompt a stronger push for democracy in Indonesia.
Indonesian President Joko Widodo's Plan to Move Capital:
- Joko Widodo plans to move Indonesian capital from Jakarta to East Kalimantan as part of Nusantara project.
- The new capital, intended to be a green, smart city, covers nearly 260,000 hectares having a cost of US$34 billion.
- Doubts exist about the full completion of the capital city relocation.
- The project faces challenges with attracting international investors and could put financial strain on Indonesia.
Southeast Asia's Investment Landscape:
- Southeast Asia attracted a record US$222.5 billion FDI in 2022 and continues to draw investments in 2023 amidst US-China tensions.
- Notable investments include a US$1.6 billion chip factory by Amkor in Vietnam and a US$10 billion investment by Geely in Malaysia.
- The US invested US$369 billion in the clean energy sector, potentially influencing other countries' industrial policies.
- A US Commerce Department investigation into solar panel companies in Southeast Asia resulted in potential tariffs of up to 254%.
- Southeast Asia could lose US$28 trillion over 50 years without addressing carbon emissions, according to a Deloitte model.
- The region could leverage superpower competition to support its green transition.
- Joko Widodo cannot contest for a third term but remains influential in the political realm.
- Micron Technology agreed to build a US$2.75 billion semiconductor facility in India's Gujarat state.
- India contends with infrastructural and regulatory challenges in attracting foreign investment.
- While India aims to attract industries, China's advanced educational and investment landscape makes it a formidable competitor.
- Southeast Asia benefits from open trade policies and supply chain diversification.
- Southeast Asia is fostering global partnerships particularly in the nickel and EV industries, avoiding dependency on a single supply chain source.
Barriers to Women's Political Representation in Indonesia:
- Indonesia's quota system encourages women's participation but patriarchal attitudes and economic inequality hinder their success.
- Rising campaign costs and clientelism favor elite and well-financed women candidates, often sidelining grassroots women leaders.
- Political parties prioritize vote getters over developing women cadres, perpetuating political dynasties.- Global investors are opting for emerging markets (EM) other than China due to risks linked to China's economy and geopolitical tensions.
- Emerging market mutual funds and ETFs that exclude China are seeing significant asset growth as U.S. and European investors look to avoid exposure to China.
- China's post-COVID economic rebound is faltering, causing intensified investor aversion, alongside heightened Sino-U.S. tensions.
- Funds are reallocating investment to countries like Mexico, India, Vietnam, and Brazil that are either benefiting from China's economic challenges or offer better growth prospects.
- Malcolm Dorson from Global X sees China's export dominance waning, benefiting countries across Southeast Asia.
- Refinitiv data: China-focused mutual funds faced $674 million net outflow in Q2. EM excluding China funds gained nearly $1 billion.
- iShares MSCI Emerging Markets ex-China ETF attracted a record $1 billion in H1 2023.
- Investors are wary of China due to expanding U.S. bans on investments in Chinese military and tech sectors.
- Top 10 China-focused mutual funds dropped by over 40% since their peak in 2021.
- UBS China Opportunity Equity Fund's assets decreased to $4.5 billion, a quarter of January 2021 levels.
- GIC Singapore shifted capital out of China into Mexico, India, Indonesia, and Vietnam due to global supply chain changes.
- Demand for China-focused investment products is plummeting.
- China's CSI 300 index performance is flat, while Japan's Nikkei index is up 25% and the S&P 500 nearly 19%.
- In 12 months up to mid-July, EM Asia excluding China equities saw $39 billion in foreign purchases, the first to exceed inflows into China since 2017.
- Singapore aims to improve mental health services by 2030: increasing psychiatric and psychological personnel by 30% and 40% respectively, and training additional 28,000 in psychological first aid.
- Deputy Prime Minister Lawrence Wong advocates for destigmatization of mental health and collective support.
- The Inter-agency Taskforce on Mental Health and Well-being, co-led by the Ministry of Health and Ministry of Social and Family Development, addresses mental health holistically.
- Temasek's T2030 strategy focuses on a resilient, adaptable portfolio anticipating global challenges for long-term sustainability.
- The strategy combats elevated prices, macro policy, and geopolitical events in the financial landscape.
- It also anticipates complex trade and investment regulation, aiming for net zero carbon emissions by 2050 and tackling cyber risks and workforce evolution.
- Temasek promotes investment in climate-aligned opportunities, cybersecurity, and upskilling for Industry 4.0.
- German companies in China are reducing risks due to geopolitical tensions: 83% surveyed by the German Chamber of Commerce in China act in response to geopolitical tensions, 45% due to economic slowdown, and 24% for China's focus on self-reliance.- Survey reports 57.5% of companies plan to invest more in India, 37.9% in Vietnam, 30.1% in Thailand, 23.3% in Malaysia, and 20.1% in Singapore as part of risk mitigation strategies.
- These strategies come after the German government aimed to reduce economic dependence on China, confirming German firms' intentions to minimize reliance on China.
- Western countries are also adopting risk mitigation tactics due to concerns over China's actions regarding Taiwan, the South China Sea, and its domestic economy control.
- China experienced its first quarterly foreign direct investment deficit in Q3.
- Despite risk mitigation efforts, 54% of German firms intend to further invest in China, up from 51% last year, to localize production, potentially insulating from geopolitical conflicts.
- Only 44% of German companies surveyed are pursuing risk mitigation strategies.
- Coral reefs, hosting 25% of ocean biodiversity and supporting one billion livelihoods, face significant environmental and economic threats, especially in Southeast Asia.
- The IPCC estimates that degradation of reefs could impact 4.5 million people's livelihoods in Southeast Asia and the Indian Ocean region.
- Rising sea temperatures in the Coral Triangle are estimated to increase by 0.1°C annually and could be 1.4°C warmer by the century's end.
- G20's CORDAP, led by Carlos Duarte, aims to accelerate coral studies, addressing the underestimated ocean role in climate discussions.
- Duarte calls for increased funding for pragmatic, scalable solutions in coral research and conservation.
- Ageing populations lead to economic growth decline, dependent on the strength of earlier economic foundations.
- Elder workers exhibit lower productivity and innovation compared to younger workers, affecting labor productivity growth and innovation rate.
- Economic natural growth rates decline alongside corporate investment interest, impacting firm productivity.
- Indonesia focuses on "get rich before getting old," needing to prioritize development foundation before wealth.
- President Joko Widodo's legacy includes infrastructure and regulatory improvements, but his successor must address human capital and governance issues.
- Indonesia's Human Capital Index reveals children have a productivity potential of 54%, compared to 88% for Singapore and 69% for Vietnam.
- Indonesia's initiatives like the Omnibus Law on Job Creation aim to improve health and education sectors through foreign investment.
- Governance quality in Indonesia has regressed, with the Corruption Perception Index noting a significant decline during Jokowi's second term.
- Indonesia's OECD full membership by 2026 could assist domestic reforms, such as judicial, anti-corruption, and democracy.
- Indonesia's "downstreaming strategy" for commodities requires a thorough cost-benefit analysis and good governance to benefit society.
- Indonesian governments must enact climate change adaptation and emission reduction commitments to meet high-income country status.
- Southeast Asian defense ministers meet in Indonesia, reinforcing ASEAN's central message amid major power rivalry.
- US Defense Secretary Lloyd Austin will meet ASEAN ministers, discussing issues such as the South China Sea disputes and regional tensions.
- The Jakarta meeting plans to include talks with key Indo-Pacific nations, including China, whose defense minister change raises leadership stability questions.
- The ASEAN region's economic and strategic significance attracts attention from major powers like the US and China, with Indonesia emphasizing non-alignment.
- BRICS (Brazil, Russia, India, China, South Africa) promotes Global South cooperation and stands as a counter to the G7's economic influence.
- BRICS' stance on the Russia-Ukraine war shows distinct differences from G7's approach, with BRICS expressing concern but no condemnation of Russia.
- Indonesia maintains a non-aligned policy, focusing on peace and refusing to bind to military pacts, considering BRICS membership as potentially complicating.
- While not a BRICS member, Indonesia sees value in BRICS partnerships, especially in "de-dollarisation" efforts, aligning with Indonesia's goal to strengthen the rupiah.
- Russia's invasion of Ukraine has led to Western sanctions, but many nations, particularly in the Global South, have not joined in censure or sanctions.
- Governments outside Europe and North America, including China, Brazil, India, and South Africa, have either supported Russia or remained neutral.
- Non-alignment, a policy to avoid strong alliances with major powers, which emerged in the 1950s, remains a preference for many governments across the world.
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