On February 14, 2024, over 200 million registered Indonesian voters will have the opportunity to vote in the country’s general election. With new leadership at stake, three presidential and vice-presidential pairs are vying for the country’s highest offices: Anies Baswedan and Muhaimin Iskandar, Ganjar Pranowo and Mahfud MD, and Prabowo Subianto and Gibran Rakabuming Raka. 

What do these candidates and their platforms mean for Indonesia’s democratic trajectory, political stability, and economic future? Will President Joko Widodo’s mega-plans such as the new capital, Nusantara, falter or advance under the next administration? How will Southeast Asia’s largest nation balance industrial growth, sustainability, and social equity? What will Jakarta’s—or Nusantara’s—foreign policy look like as strategic tensions simmer in the region and globally?  

Join Carnegie’s Asia Program for a timely discussion on Indonesia’s upcoming elections with Sana Jaffrey, Mega Valentina, Philips Vermonte, and Elina Noor.

Event Transcript

Note: this is a rush transcript and may contain errors.

Elina Noor:
Good morning from Jakarta, and welcome to all of you from wherever you may be tuning in. Thank you, Philips. My name is Elina Noor, and I am a senior fellow with the Asia Program at the Carnegie Endowment for International Peace. We are under one month out from Indonesia's general elections on the 14th of February, and the field at the presidential level has narrowed to three candidates and their vice presidential running mates.

On the first ticket is Anies Baswedan, former governor of Jakarta, and former minister of Culture and Education. Together with his running mate, Muhaimin Iskandar, or Cak Imin, who's chairman of the National Awakening Party, Partai Kebangkitan Bangsa. The second ticket is current defense minister, Prabowo Subianto. And controversially, we'll get a little into this, Gibran Rakabuming, the mayor of Surakarta in Central Java, who happens to be the eldest son of President Joko Widodo. On the third and final ticket is Ganjar Pranowo, former governor of Central Java, and his running mate, Mahfud MD, the current coordinating minister for Political, Legal, and Security affairs.

So we are on the cusp of a very significant change in leadership at the highest level. But while we will certainly see a change in personality, because President Joko Widodo is term limited, we may also end up with a continuation of policies, politics and power brokers. To unpack some of these dynamics, I'm grateful to have my Carnegie colleague, Dr. Sana Jeffrey, who is also a research fellow at the Australian National University's Department of Political and Social Change.

My good friend Dr. Philips Jusario Vermonte, dean of the faculty of Social Sciences at the Universitas Islam Internasional Indonesia. Also chairman of the Indonesian Pollsters Association, and most recently a panelist at the most recent presidential candidate debates on defense, security and foreign policy matters this month. I'm also very pleased to have Mega Valentina, deputy director at the U.S.-ASEAN Business Council, who's joining us this late evening, a day earlier, from Washington DC.

Welcome to all of you. I'm so glad that you're here with me. I'll kick off a conversation with these three experts with some questions, before turning it over to you, the audience, for your own questions and comments in the final 15 or 20 minutes of this one hour session. Please, however, feel free to begin posing your questions or comments at any time, and I will get to them a little later. So let's get into this. Sana, why don't I start with you? I've briefly given an overview of the context of political developments in Indonesia, with a rundown of the candidates. Let me start with what I might be missing. I know you have been concerned about some nuances that were left out in some of the headlines that we've seen, particularly in foreign press. What am I missing out on?

Sana Jaffrey:
I think it's important to understand the context of what is happening, right? You briefly mentioned the issue of the president's own son running as the vice presidential candidate for his formal rival. Some of the things that have been picked up in the foreign press have to do with dynastic politics, have to do with this idea that Indonesia's backsliding is sort being solidified by dynastic politics. The key issue underlining this nomination is that the president has nominated his own son for a VP post. But I think it's really important to understand that dynastic politics, or politicians with other relative politics, is a fairly common phenomenon across the world.

It's not a particularly Indonesian problem. Within Indonesia, Indonesian voters, a majority of Indonesian voters don't necessarily see that as a problem. So the unprecedented thing here is not that somebody's son is running, a powerful politician's son, or an incumbent son, or a relative is running in an election. The real key issue here is the way the path to his nomination has been paved by exerting influence in the country's top court. Just for background, the constitutional age limit on people who want to run for the presidency or the vice presidency in Indonesia is 40 years.

This limit was then lowered through a very controversial decision by the Constitutional Court in Indonesia. In this decision, a key role was played by President Widodo's brother-in-law, who was the chief justice, still is actually the chief justice. There was an inquiry into the decision. It was found to be unethical. Nevertheless, because the court had issued its decisions, and ethical decisions are not applied respectively, Widodo's son Gibran is still eligible to run in the elections, even though the decision that made that possible is found to be unethical.

So the key question here is not that a politician's son is running in an election, or a powerful person's son, this is very common. The key issue here is the potential abuse of power. The question on everybody's mind now is that, if this president is willing to go this far to pave the way for his son's nomination, how far would he go to ensure a victory?

Elina Noor:
Great, thank you. Thank you for setting that scene for us. Philips, you are on the ground in Jakarta. You've been very intimately involved in all this. Anything to add, or would you like to respond to anything Sana said?

Philips Vermonte:
Yeah. I think this election is supposed to be a level playing field, because it's supposed to be there is no incumbent. Because President Joko Widodo ended his second term, and then compared to what happened in 2014 at the end of President SBY's term, then it turns out this is a completely different political development. One of the things that caused this is, I think what happened, like what Sana Jaffrey said earlier about the involvement of the current president, President Jokowi, president SBY did not do that at the end of his term, was that President Jokowi remains a very popular and a very electable figure.

In the past six months or one year, his approval rating has been consistently very high, at the level of 80%. Then of course, he's young, and he has been pretty successful in terms of infrastructure development, and so on and so forth. There must be, as rational political actors, there must be some temptation to continue the legacy, and somehow to influence the outcome of the election. That I think is what is happening in this coming election in 2024. But as Sana Jeffrey said, now it is a matter of how. Right? A matter of how, whether you have to intervene in various political processes, and so on. That is the question that Indonesia is now facing.

Then secondly, the question of dynastic politics. It's been in Indonesia for forever probably. Then what we were having in 2014, when President Jokowi came to power, and he was a strong candidate at that time. I think in my opinion, people were thinking that President Jokowi is kind of a new kid on the block, with no dynastic background. And with no baggage from the past, no corruption cases, human rights violations or whatnot. Then that was a real hope at that time in 2014. But then after 10 years, it seems to me that politics has not changed much in Indonesia when it comes to elections, especially presidential elections.

It is a matter of, like you said earlier in your introductory remark, Elina, it's personality matters, and then politics has been personalized. It's fights between families, first families in Indonesia. So that's I think what has been happening. However, though, in the past 20 years or so, we've been installing some of these democratic institutions, the press somewhat free. Of course there are problems of interventions here and there from the capital and so on. But somehow I do hope as an Indonesian that there will be some lessons learned, and some response from civil society for years to come.

And then from some of these institutions, that they would find some ways to improve their resilience in terms of defending and maintaining Indonesia at the sufficient democratic level that has been... We've been building this since 1998. So I give all these three candidates some kind of a benefit of the doubt. That people would come up, academia, civil society organizations, think tanks, and so on and so forth, to somehow put in place some correcting force to whatever these political players want to do with the Indonesian society.

Elina Noor:
Great, thanks. I'm going to come to you, Mega, very shortly to ask about what it means for President Jokowi's economic agenda legacy. But I want to pull this thread a little more. Sana, you had a piece with us in Carnegie in October talking about the durability of a system that entrenches this dynastic politics. Is this something that is a longer term governance challenge to Indonesia? I guess what I'm asking is, is it a feature of the system or is it a bug? Because it seems to be a feature throughout the political systems of many countries, in Southeast Asia in particular, as you pointed out.

Sana Jaffrey:
I think it's a feature of politics, period. I mean, our American listeners are, whoever's tuned in, Bush Senior, the W, and then the governor of Florida. I mean, these things are sort of... It's part of politics, that it accumulates. The power accumulates to politicians who have it. So it's part and parcel of that sort of system. Democracy can somehow tamper with it a little bit, or decrease the tendency, but does not get rid of it. You do have, especially in information poor environments, family branding can provide sort of heuristics for voters who are otherwise not able to access what the platforms of particular parties are.

For example, in Pakistan, a lot of people think that the Bhutto family name, for example, is associated with a very sort of hard stance against the military. In India, the Gandhi family name means something. It's associated with a particular type of politics. So that in itself is not a problem. The problem is, again, the way in which these politicians from particularly powerful families are using then this power to block the paths for others to enter. As Philips earlier said, the great hope with President Joko Widodo was that he was the one who was going to break that mold. Right?

I remember very clearly at the time in 2014, there was some sort of deliberation about whether or not PDI-P, the largest party that ended up nominating him, the leader could nominate her own daughter for the ticket. She's not popular, and so it would've been a big mistake and a sort of miscalculation. But she could have done that, and it wasn't the case that she did. In fact, this highly popular governor of Jakarta, who had sort of built his image and his brand as somebody who was a public service provider, and a reformer and was going to fix the system, clean it.

Clean, clean, clean was everything we heard. He was supposed to be the breakthrough. But instead, what we end up with is him nominating not only his son to the presidency, but placing one son in a political party, and a son-in-law for the potential governorship of a large province. This is not something that goes away. It configurates towards the same type of situation for everybody, it seems.

Elina Noor:
That's very useful. I mean, it's true. Look anywhere, and you'll see features of dynastic politics, even in Western democracies. Mega, I want to ask you about President Jokowi's economic agenda, particularly as his term comes to an end. He's been focused on attracting foreign investment to grow Indonesia's economy, but in recent months what we've heard is it has to be on Indonesia's own terms. As we look towards a new president, both in Indonesia and in the United States... We're going to mark the 75th anniversary of bilateral relations between both countries in 2025. What are the commercial and economic expectations that you've been hearing at the U.S.-ASEAN Business Council for economic ties between both countries, and can they continue to align?

Mega Valentina:
Right. Thanks, Elina. I think I want to start with highlighting that there are growth, significant growth in the current administration, in the past I would say two administrations. The recent sign is that Indonesia has become the fifth largest investment partner of the U.S., I think jumping from the sixth place, I think two years ago. Also, for example, U.S. imports increased almost 30%, and U.S. exports of service also increased around 25%. So the recent U.S.-Indonesia economic relations is looking good recently. Of course, you mentioned about the kind of... It should happen under Jokowi's term. A lot of people also mentioned about this kind of phenomenon.

But if we talk about investment protection, for example, or trade imbalance, I think it's a natural and uncommon phenomenon in any bilateral economic relations. In fact, I think there are no bilateral relationships that is equal, that's 50/50. But also at the same time, we have seen that there are multinational companies in Indonesia that exploits resources without adequately contributing to the people of Indonesia. Also in addition now in the past five years, I would say, every country is navigating global crisis, from energy, supply chain, food crisis. The aftermath of the pandemic, we still face the aftermath.

So there is a dire need for economic resilience more than ever. From there, we understand that Indonesia needs to balance between FDI and national interests, naturally. It reflects in Jokowi's movement, like for example, increasing national manufacturing capacity efforts. In addition to just resource extraction, for example, and also his efforts in balancing emission reduction, and increasing or strengthening economic resilience. As Philips mentioned, how much resilience is also crucial for Indonesia. The interesting part is elections are coming, and not just in Indonesia.

Now this year, I mean the third and fourth-biggest populations in the world, Indonesia and America, are having elections. America's election is I think November 5th this year. These two elections, we believe, will not only affect the countries' economies, not only Indonesia and the U.S. economies, but also the world's. Will the economic agenda shift along the new leadership? We suspect that it's a yes, but the real question is always, how much continuity and how much change we will see. Unfortunately, no one has a crystal ball to see this. But I think we could share three things that we know.

First is all three candidates, we have met with all three candidates. What we learned is they have a commitment to continue the free and active foreign policy. They both want to basically gain or reap investments from both the U.S. and China, and basically connect wherever the opportunity exists. Along with other common goals that's crucial for Indonesia development, for example, the goal to create more jobs, or to get out of the middle income track by 2045. That said, also there are a lot of room for improvement, this is also what we are eager to see from the new leadership. But we believe that the mutually beneficial partnership will continue to happen as long as, first, the ongoing trade dialogue and negotiation is continued.

For example, IPEF, GSP, TIFA, those are the main vehicles of the bilateral economic relationship between the U.S. and Indonesia. We know that the recent Jokowi-Biden meeting has a lot of new potential for new collaboration, including the seed of negotiation on critical mineral agreement. The problem is we know that, if the U.S. government changes, and if the Trump administration is back in power, we learned that... There's a statement from President Trump that IPEF will not be continued, for example. So there's a lot of uncertainties. Yeah. There are also other rooms for improvement for both Indonesia and the U.S. For Indonesia, obviously continuity, stability and human capital.

But also in the U.S., what we see here in the U.S. is, when we talk about Asia, for example, most people at the Hill or in Washington D.C., they always talk about China. When we talk about Southeast Asia, for example, it always goes back to Vietnam. So there's a lack of, what do you call it, awareness of Indonesian potential, unfortunately. So I think that's one also. We are trying to encourage the U.S. government to listen more to the partners, including Indonesia. ASEAN partners, but also especially Indonesia in this case. Yeah. We hope to see stronger U.S.-Indonesia relations. And hopefully not only that, we also hope to see... We as in the U.S. business community, and U.S. business associations, hope to see that Indonesia can maintain a , a healthy democracy.

Elina Noor:
Great. Thanks, Mega. I want to get to kind of the elephant in the room, and there's no connotations to U.S. politics at all. Philips, consistently polling has been showing that the Prabowo-Gibran ticket has been leading. There are expectations that Prabowo will win, and it's a matter of whether he wins it all in the first round, first and only round, or whether they go to a runoff in June. What explains Prabowo's appeal? Is this a generational thing, because he certainly has remade himself, or his PR team has remade him in the eyes of TikTok users, for example. Is it just a matter of sympathy for this grandfatherly figure? Or has the new generation of Indonesians, is it 52% of Indonesian voters this year are going to be under 40? What is a Prabowo's appeal?

Philips Vermonte:
Right. That's I think a very interesting question. I think first and foremost is the fact Prabowo has been the minister of defense. He had been the strongest political opponent of President Jokowi in 2014 and 2019. Anybody right now who is in their right mind running for office in Indonesia knows that, given the very high popularity of President Jokowi, it will be very difficult to run on a platform of opposition. Because people, according to polls, the mood is for continuation of President Jokowi's legacy, at the society level. I'm not talking about the upper middle class, who has different aspirations. They are questioning all these democratic processes and so on.

But polls have shown that people seem to be in the mood for continuation, so it will be very hard for anyone to run on a platform of opposition. Prabowo, it seems to me, knows this very well since probably three or four years ago. So he changed. If you follow his social media since three years ago, four years ago, he slowly changed the tone, and then the messages and so on. He's going to the center, of course, because he's part of the government. So then the people start to see that he's no longer on the opposition platform. Then he, I think cleverly, also tried to benefit from President Jokowi's popularity. Then nomination of the president's son adds to that trend on the Prabowo side. That's number one, I think.

Number two, when it comes to Prabowo as a result of number one, he's been in the cabinet, in a way, if I may use the metaphor, he's been going through a washing machine. People no longer question the past. Human rights, and then the fact that he was the opposition, he was the leader who was trying to win the presidency as well. Then 2014, 2019, we have to acknowledge that was pretty bad elections. Because there were issues of, if I may say, probably the identity politics actually started in the presidential election 2014, when candidate Jokowi at the time was accused of this and that.

Then suddenly, Prabowo being a defense minister, being in the cabinet. Once again, this is only a metaphor. He is going through a washing machine. Then now, he's part of this President Jokowi's team, that has been as well... We have to acknowledge on the side of the economy, he's been doing a pretty good job, given the pandemic and so on. I think credit must be given to President Jokowi. So because he's not running on that opposition platform, I think he gets this level of support, called the tail effect, from President Jokowi's popularity.

Actually since 2014, surprisingly, if we look at the data of polls and so on, Prabowo had been consistently getting support from the young group age in 2014, as well as 2019. It's probably because he has formed a very strong social media campaign since 2014. In one of these elections, President Jokowi's support from the age group of 17 to 21 is actually tied with Prabowo, or at least Prabowo won slightly. So it's not surprising for me to see how these younger voters in Indonesia are kind of supporting Prabowo. A strong social media team, and his washing machine effect, if I may use the term, he's now become a front-runner for this coming election.

Elina Noor:
You see flashes of his temperament, maybe even temper. That came out recently in the presidential debate, when pushed. Sana, are we going to see an Anies-Ganjar mashup kind of tag team, to try to expose the real Prabowo as we get closer and closer to the February elections? Is Prabowo going to be able to maintain his cool?

Sana Jaffrey:
I think, just referring to what Philips was earlier saying about this is part of Prabowo having understood that the appeal of Jokowi and where it's coming from having changed, I'm not sure if he has changed as much as he's masked his sort of temperament. Right? You're absolutely right, that we do see glimpses of this. When he's attacked, when he is sort of put in a position where he has to defend his record or his personal attributes, it does come out. He's running for the presidency for the third time now, in the third consecutive election. He's run for the vice presidency before with Megawati.

There is a sense in his debate performance, and in just the way that he's projecting himself, that this is his turn. He's done everything one can do to, to be deserving of winning an election. Remember Prabowo is somebody who was a political pariah in the early years of Indonesia's democratic transition. He had to actually leave the country. So this is sort of his triumphant return. He's done everything one can expect of him. He's even taken on the son of the president as his vice presidential candidate, a very popular president, as Philips was saying. So what else does he have to do to just win this?

You do see sort of this flare up coming up, and then he's mocking his opponents in a way. My understanding, of having just observed Indonesian politics, is that voters do find that sort of behavior unnerving in some ways. Some people love it. Even in the United States, we've seen characters like Donald Trump sort of gaining an edge with certain types of people. But on the whole, this is sort of something that can worry voters. So one of the things we've seen is that there was this sort of momentum attached to Prabowo and Gibran when they registered formally as the candidate pair, and their numbers were going up and up and up.

What now we are seeing is that there's a flattening. So this sort of worry about, can Prabowo keep his cool? The question isn't, can he? It's like, how long can he actually keep his cool? Can he last in a second round? That's why what we are seeing is the sort of push to convince voters to just push him over the edge in the first round, so that it doesn't go to a second round. But at least for now, the polls are showing that might be a difficult thing to achieve.

Elina Noor:
Philips, I want to get your take, since you were at the last presidential debate. How do you think the responses from all three candidates fared? Did we really learn anything about what each campaign platform stood for, in terms of foreign and defense policies?

Philips Vermonte:
Right. I think I just want to continue what Sana said earlier. Of course tactics might change, but personality, you cannot change personality in a very short period of time. Probably one of the appeals right now, exactly that Prabowo, the true color of him does not bother him, and probably doesn't bother his supporters. Because for his longtime supporters, he's been known as such a person. Right now, actually with the additional supporters from President Jokowi, maybe he's kind of polished up a little bit. But people has known him as such a personality that is kind of easy to provoke, if you will. Then he's not hiding his words. But that is not bothering me to a large extent.

But now, from the debates, I think what has been clear about the debates is that you could see how the three candidates, the last debates I meant, how the three candidates are being prepared. You would hear, for example, candidate Ganjar Pranowo talk about ASEAN, COC, DOC, and a solution for the South China Sea. As an observer, if you saw the debate as well, you would conclude that is not something coming from his own thinking, but somebody or some group of people or his team trained him well, and he is open for advice. The same thing with Anies, I think. He's advisable and coachable probably, because the area of foreign policy defense for sure are not their cup of tea.

They are not kind of a political figure who's following international issues, and probably engaged in these international issues. On the other hand, Prabowo was expected to be the expert on these issues, on defense in particular, because he's been the defense minister. For a long time since the previous two elections or three, like what Sana Jaffrey mentioned earlier, he was supposed to be someone that would win the debate easily, because this is really his cup of tea. But what came out of the debate was more on the personality side, not the substantive part. Then what he has been saying as well, I think in the debate, he has been saying things that he said during the last debate for the last 10 years or 15 years.

Meaning I think his team probably coaches him. But somehow Prabowo the candidate is on the side of not really absorbing whoever advised Prabowo for the debate, the suggestions for the substance of the debate that night. So probably he's less coachable, if you will, and I think more interesting to see. Campaigning and governing is different, right? Maybe when he is elected, he's more willing to listen, or will be more coachable or advisable. We don't know. But certainly from the debate on January 7th, it seems that the other two candidates were more open to advice, to suggestions from their team, because certainly the substance were not their cup of tea.

But on the other hand, what we have been hearing on that night, something that Prabowo has been saying in the past 10 years or 15 years, if you will, nothing really new of what he was telling the audience about on that debate. Maybe he believes in those things very firmly. Nothing changed from his point of view, or as I said, maybe on that particular issue, on that particular debate on January 7th, he's less advisable, if I may use the word.

Elina Noor:
I have to say, I was actually very impressed with the mention of ASEAN and the COC, but also reflecting my own bias, there were very frequent mentions of cybersecurity. That really struck me from the debate. Mega, you're free to jump in on this topic, but I also wanted to get your thoughts on the economic debate that took place among the vice presidential candidates. Any insights?

Mega Valentina:
Yeah. Thanks, Elina. It's very interesting, and we heard a lot of different views from here, from outside of Indonesia basically, regarding the vice presidential insights or their views on Indonesian economic planning. What we take is, I think their lack of detailed planning in terms of specific economic regulations, specific economic policies. Most of the VP candidates are talking in general about the economy and their priorities. So crucial or significant issues that are affecting U.S. businesses or foreign businesses, for example, like the local content requirements, the specific implementation of omnibus laws, including omnibus law and job creations, or omnibus law and financial sector, were not... They didn't see the candidates dig deeper into those issues.

It seems like there are a lot of things that are still up in the air. While at the same time, it means that there are room hopefully for them to learn or take input from their stakeholders, including the foreign businesses. Hopefully what Philips said about them willing to learn or to be trained is true, but we did see that... I think hopefully they are also balanced between, what do you call it, increasing the domestic economy, and reducing tariff and non-tariff barriers gradually. Hopefully gradually implementing market liberalization and easing restrictions on, for example, foreign ownership. That's also another issue that a lot of foreign investors have concerns about.

Yeah. We feel that it's pretty interesting that in the three pairs, or in the team of the three pairs, other than they are surrounded by, one, military figures, two, business figures as well, so there is some balance in that. Also, of course religious figures. All three pairs have proximity to especially NU, the largest Islamic organization in Indonesia. Seeing these figures, especially the business people, helping the two candidates, I think that is good sign that they will focus, or will have great information, great insight. But yeah, also conversation. We try to have conversations with all three candidates, their campaign teams as well. So that we can continue to provide insights for them and become resources for them, especially if one of them will become president and vice president of Indonesia.

Elina Noor:
Thanks. I would've loved to hear more details on how to fund the luncheon and milk program, for example. I'm sure there's a lot of interest in that. But I'm going to take questions that have been steadily streaming in, actually from the start of our conversation, and circle back to where we began. There have been a number of questions about the constitution of the Constitutional Court, and a specific question I suppose to Sana about Anwar Usman being the chief justice of the Constitutional Court. Wasn't he a regular justice, and was Suhartoyo instead not elevated to the position of chief justice? Sana, would you like to take that? There is another question that relates to the Constitutional Court as well about, again, reconstituting the membership. What is the likelihood of legislation to reconstitute the court becoming law?

Sana Jaffrey:
Right. I think this is correct. That Anwar Usman, who is President Widodo's brother-in-law, was found to have violated the court's ethics in influencing the decision that then led to Widodo's son's nomination, is no longer serving as the chief justice, but he's still a justice in the court. He is also prevented, from my understanding, sitting on any decision that relates to elections. So he is an active judge, but he's barred from listening to or deliberating on cases that are related to the election. He's not a chief justice. There is a new chief justice.

There was some discussion, there has been for actually a couple of years some discussion, on changing the way and the duration of the tenure for the Constitutional Court judges. My understanding is that discussion has been tabled, and is not being actively pursued. There was some sort of concern when this decision came out, now that Anwar Usman has been sidelined, that the president may not have as much influence on the court anymore. So this would be one way of getting rid of some of the more independent minded judges. But there was a lot of outcry about this possibility, and my understanding is it has been tabled.

Elina Noor:
Philips, did you have anything to add, or can I lob a different question at you?

Philips Vermonte:
Yeah. Just a different take on this [inaudible 00:44:23] thing. I think at the heart now is learning from the past two elections, 2014 and 2019. There had always been legal action taken against the election results announced by the Indonesian Election Commission. So the Constitutional Court always became the battleground post-election, shortly post-election. That's why I think, I would not be surprised if all three candidates, with their political supporters through political parties, would try to somehow influence the composition of this Constitutional Court.

Because the legal cases would be taken by the Constitutional Court, before the official and final result of the election being decided, learning from the 2014 and 2019 elections. So there are concerns about, although this is just concern, would not necessarily be seen in the actual election. But of course, there are probably irregularities in how the campaign has been waged in various places in Indonesia. We are not only talking about Jakarta or Java probably, but in the outer islands and so on. Reports have been streaming in, of course it's coming from supporters of candidates who seem to be not on the winning side and so on.

That's normal during the election. But lessons from the 2014 and 2019 elections, the Constitutional Court became the battleground. I think this is in the anticipation of that, if that even unfolds in the coming election on February, or if there is not a second round. If there is a second round, the second round would be June 26th. So this window, a few months, I would not be surprised if the Constitutional Court becomes something that is being hotly debated among the public, as well as the political players or the candidates.

Elina Noor:
Mega, there's a question about how you see the election affecting the progress of the Just Energy Transition plan, if at all. Any takes on this?

Mega Valentina:
Yes. Happy to talk a little bit about it. The interesting things that we see from all three pairs, VP and presidential candidates, they all have some degrees of they prioritize climate and energy transition aspects. Each of their vision and mission lists, for example, forest rehabilitation, mitigating deforestation, and of course reaching the renewable energy share in Indonesia. Anies mentioned early retirement of coal-fired power plants, which was also shared by the other two candidates. They also list several emission reduction policies, especially [inaudible 00:48:10], a community-based renewable energy and waste management circular economy, which also was mentioned by Anies.

So there are a lot of ideas to focus on energy transition. So JETP, the Just Energy Transition Partnership, becomes very crucial in these plans. Because without the support of international, without global support and without the U.S. support, this energy transition effort will slow down. Some said it's impossible to do that without international support. Based on their vision and mission, we believe that all three candidates would support the implementation of JETP, will continue to prioritize implementation of JETP. Now the question is, from the US side, if the power changes, if there's transition to, for example, President Trump.

If Trump comes back to power, there are a lot of concerns whether this implementation would be executed in the timeline that it is initially planned. Or whether there's a delay, or whether it will be implemented at all. Because we have heard, or we have seen during his administration, that Indonesia and perhaps ASEAN in general is not part of his priorities. This becomes the question from Indonesia, which is shared by other partners of the U.S., investment partners or trade agreement partners. What will happen after November 5th? We hope that it's not canceled altogether. We have seen this story in previous trade negotiations, like TPP. So it's I think a valid question for the U.S., or valid concerns towards the U.S. government.

Elina Noor:
So what I'm hearing you say is that answer lies more with the U.S. side, rather than the Indonesian side.

Mega Valentina:
Correct.

Elina Noor:
There's a question about no Nusantara, which of course is Jokowi's mega project, and what I assume he hopes to be his legacy project. The question asks whether Nusantara is an albatross or a straight jacket for future political leaders, or is it Indonesia's only opportunity to get it right and have a promising future? Maybe I can start with Sana, and then we can get Philips' take.

Sana Jaffrey:
It certainly is an opportunity for somebody to have a promising future. I don't know if that constitutes the Indonesian people, or just some people who are likely and set to get rich from a project like that continuing. This is not the first time that the idea of an alternative capital has been suggested in Indonesia. This has been sort of part of an ongoing effort to move attention away from Jakarta. It's a political thing as well, to sort of move away from the largest populated area in the country, and acknowledge that other parts of the country are also equally important.

So for President Jokowi especially, this had more resonance, because it comes with the sort of promise of building this infrastructure, and the sort of mega grand projects that he has chosen to associate himself with. There are certain issues with this. There's some concerns about the extent to which the promise has been overstated, and the extent to which people are willing to invest in it to the level that is needed to make it functional. There's also some concerns about who stands to gain from it.

We've heard some concerning news about Prabowo Subianto's family has a big stake in the area that's going to be part of the new capital and developed. Then as well as other supporters of Jokowi and that coalition. What we've seen in the debates is that only one candidate, Anies Baswedan, has taken a somewhat clear position that he's not in favor of continuing this project. Prabowo Subianto is very much for it. I think Ganjar is also sort of not opposing it, as Philips mentioned earlier. That would be costly for him to dissociate himself with President Jokowi and sound oppositional. Yeah.

Elina Noor:
Philips, your take?

Philips Vermonte:
Yeah. I don't know to answer the question, but one thing for sure, there is a law that has been passed by the parliament on the capital city. So whoever becomes president, they are obliged to continue the project. Now if Prabowo are elected, then for sure it will continue. Then if Anies of Ganjar won the presidential election, it would I think continue but on a much lower pace than what President Jokowi now wants it to be. Now because there are a lot of concerns, Sana mentioned about how to finance this project of the capital city. Even Prabowo, if he's elected, maybe he's probably slowing down as well. For example, during the campaign, during the debate, I think all these candidates promised to increase the defense budget.

Then that would of course put Prabowo's own project at the Ministry of Defense to increase. To purchase all this military equipment in itself already kind of seems to me priority to him as well. So it must be that the source of the funding should come from somewhere else in the national budget. So these three candidates I think will continue, but at a different pace on this, because there is a law. If they want to stop, for the other two especially... Because if we look at the polls right now for legislative election, it seems that Prabowo's party benefited as well. So now, they are almost tied with PDIP.

Then maybe they would be able, if Prabowo wins, of course, they would be able to form some kind of a majority in the parliament, if things continue like this up until the February 14 election. If then Anies won the election, or Ganjar, it seems to me looking at the data today, they would not be able to form a majority right away. Jokowi started with a minority government as well, back in 2014. It took time for him to become the majority, his coalition, at that time. So for Anies and Ganjar to change the law, if they won the election, right away, that would be a political battle. I would say they would avoid that. So they would continue the project of the new capital city, but at a much slower pace, I would say.

Elina Noor:
So whether or not, at what pace it goes, it will be in Indonesia's future, is what you're saying, Philips?

Philips Vermonte:
Well, yes, in a way. The election is our future as well.

Elina Noor:
This is true. Mega, I want to tack on an investment angle to this. Because Nusantara has been touted as an investment opportunity for partners, including the United States. Have your clients at the USABC seen it this way?

Mega Valentina:
For sure. USABC members consist of mostly big businesses, like Fortune 500 companies. We have seen a lot of interest, a lot of questions about it. Whenever we have public, private discussions, this is one of the most asked questions. "What's the plan? What are the opportunities that we see in Nusantara, and what are the benefits?" What are the sort of interesting stimulus, for example, with economic zones, and the fact that the smart city and modernization is included in the city planning? The automatic electric vehicle planning is also infused in the blueprint, for example. It's very interesting for so many of our member companies.

But also at the same time, they realize that this is a marathon, not a sprint. So there are a lot of companies that basically manage their expectations because, for example, neighboring countries have done a similar strategy, a similar move. Malaysia with Putrajaya, and Myanmar with Naypyidaw, et cetera, and Australia. It takes time to build the ecosystem for a new capital city to be a, let alone profitable, but to build the basic ecosystem, it takes time. It takes DC, I don't know, 200 years to be developed. At the same time, there are a lot of managed expectations, I would say. I think everybody agrees that it cannot be rushed.

Although we have also seen, for example, the Stanford Doerr School of Sustainability have signed a letter of intent to build a campus in Nusantara. Some of our member companies have probably signed some kind of agreement or a verbal commitment to invest in Nusantara, and have spoken or met with Bambang many times. So there's seriousness in that investment intention. But yeah, probably a slower pace would be taken. That's also a common strategy from U.S. businesses. They don't rush, different from Chinese investors. [inaudible 01:00:18] is very strategic and step-by-step. But yeah, there are a lot of optimism on the opportunity.

Elina Noor:
Great. Thank you so much. We're already at time, but I just want to squeeze in one last question, if you will indulge me. Hopefully, it will be a quick yes or no answer. This relates to foreign interference in elections. Any evidence of that? I'm going to go to Sana, Philips and Mega really quickly. Sana.

Sana Jaffrey:
Nothing credible that I have seen to suggest that any foreign influence could alter meaningfully the elections results in Indonesia.

Elina Noor:
Thanks, Sana. Philips?

Philips Vermonte:
Yeah, I agree with Sana. Although a few days ago, the state agency that monitors financial transactions kind of stated there are some irregularities found in some money transfers to some candidates for legislative elections. But other than that, I've not seen any credible evidence for any foreign intervention.

Elina Noor:
Thanks, Philips. Mega?

Mega Valentina:
We have not seen anything suspicious, but we want to also highlight that a lot of U.S. businesses have kind of offered themselves to be resources. "Use us," they said. "Have a dialogue with us. Ask us questions. We would like to share data or insight, or anything that they need." They want to share a white paper, for example, for the upcoming president. So there are a lot of... Also, they try to create a dialogue with all three candidate pairs.

Elina Noor:
Great. Well, we can probably go on for another 10 hours, and right through to even maybe June, if we don't see a wrap in the political decision in February. But we have to end it here. Thank you so much to Sana, Philips and Mega, for helping me and the audience understand a little more about what is going on in Indonesian politics. I will just say, stay tuned. There are all these little controversies and exciting developments going on. Who's having dinner with whom? What does that mean for the eventual decision making in February? But for now, we have February 14th as a milestone, and then we'll see from there. Thank you all so much, again, for joining me, and we'll see you at our next event.

Sana Jaffrey:
Thank you, Elina.

Mega Valentina:
Thank you.

Philips Vermonte:
Thank you, Elina.