In upsetting everyone’s best-laid plans, the COVID-19 pandemic has made everyone aware of the fallibility of the single-minded pursuit of peak efficiency. Among those seeking a more decompressed future, in which there is a better balance between today’s rewards and tomorrow’s risks, is Indonesian President Joko Widodo. He has his own compass to navigate the post-COVID-19 world: a two-year stint at a remote pulp mill in his early youth.
His search for answers is taking him back to Aceh at the northern tip of Sumatra, Widodo said in a Zoom interview on Wednesday.
That is where as a forestry graduate, the future furniture businessman-turned-politician landed his first job, living with his wife, Iriana, deep in the jungles, a seven-hour ride from the provincial capital, which itself is 2,200km from his home on the main island, Java.
“As we pursue our right to development, I know what it’s like to be dependent on forests for livelihood,” he said.
To prolong the riches of the country’s resources, he wants to reforest more than 130,000 hectares — an area as large as Los Angeles — this year, make Indonesia a hub for electric vehicles, promote furniture made only with certified timber and raise the contribution of renewable power to 31 percent by 2050, from just 11 percent now.
“It’s about striking a balance,” he said.
One-and-a-half years into his second and final five-year term, Widodo has come a long way from Aceh, where resource exploitation once coexisted with brutal military repression.
POLICY GOALS
In today’s democratic Indonesia, and especially since the COVID-19 outbreak, the approach is a more participative transformation, with sustainable development an important consideration, Widodo said.
A moratorium on new palm oil plantations remains in place. Once the pandemic eases, the ambitious and controversial project of situating the new national capital amid the tropical rain forests of Borneo is to resume.
As the first president to emerge from outside a tightly knit elite, “Jokowi,” as the popular 59-year-old leader is known, has to create jobs for a still-growing population of about 270 million, the fourth-largest in the world.
The economy might need another quarter-century to earn a high-income status. With China and the US competing for global dominance, it will not be easy for Indonesia to hitch an independent ride.
While Widodo’s immediate priority is to reignite economic growth to ward off the risk of large-scale capital flight, starting with a 7 percent expansion this quarter, it is the task of reimagining Indonesia’s place in the global economy that will require true leadership.
The central question is whether a sprawling archipelago of 17,000 islands and atolls, astride the Pacific and Indian oceans, needs to extract all the carbon trapped for thousands of years in its peaty wetlands. Everything else — from putting more palm oil in biodiesel and setting up fewer coal-fired plants to decongest the sinking capital city, Jakarta — would emanate from that vision.
Widodo wants to demonstrate that he is serious about making up for lost time with new regulations expected later this year. The world’s top exporter of thermal coal finally sees the need to put the right price on carbon, tax it properly and plow resources into a barely tapped reservoir of renewable power.
However, a low-carbon future is difficult in a resource-rich nation with entrenched business interests. Policy U-turns have slowed wind and solar adoption, leaving cheap and abundant coal with a dominant 39 percent share in the country’s total energy mix.
However, more than coal palm oil embodies the tensions between lives and livelihoods. The thick haze of pollution released every year as oil-palm planters set fires to clear land has been a constant source of irritation in the past few years in Indonesia’s relations with neighboring countries such as Singapore.
Last year, Indonesia’s government said that illegal burning could be a health hazard for COVID-19 patients at home.
Widodo said things are getting better: Only 296,000 hectares were burned by forest fires last year, compared with 2.6 million hectares in 2015.
Next, he wants to plant mangroves at a massive scale to fight deforestation, prevent soil erosion and increase the fish population, but there is no easy way out of palm oil dependency.
Before the pandemic, Indonesia’s plan was to raise the refined palm oil content in biodiesel to 40 percent by next year, from 30 percent at present. The shift to greater domestic demand is a way to protect 16 million direct and indirect jobs in a crucial export industry that the EU has declared unsustainable.
The EU will phase out palm in biofuels by 2030.
WIDODO’s LEGACY
After the pandemic, some growers are packing up, with Sri Lanka recently asking planters to dig up their trees. Despite concerns of environmental degradation and human-rights abuse, that is not an immediate option for Indonesia and Malaysia, which together account for 85 percent of global production.
Widodo’s choices will shape the climate destiny of Southeast Asia. Even if the world’s most popular cooking oil is indispensable in the interim, the president needs to double down on his signature village-fund program so that rural hamlets can decide for themselves how to diversify their economies with government support.
The good news is the help from digitization. In youthful Indonesia, one in five people are on the Internet for at least eight hours a day, consulting firm Deloitte said.
Of the US$8.2 billion raised by Southeast Asian start-ups last year, 70 percent went to Indonesia. The country is brimming with entrepreneurial energy around ventures that could be profitable and sustainable, such as the TaniHub, which allows people to buy produce online directly from farmers.
Widodo’s biggest legacy will still be a shiny state-led project: a new capital on Borneo island, the scene of some of the worst excesses of extractive development under former Indonesian president Suharto’s 32-year dictatorship.
Indonesia has come far since the fall of Suharto’s regime during the Asian financial crisis in 1998. It is one of Asia’s more stable democracies, resisting Islamist militancy even with the army back in the barracks.
Java’s hold on national affairs is still strong. That is something that a faraway new capital could help weaken, leading to a fairer distribution of the pie.
If there is one lesson from COVID-19, it is the need to break decisively from centralized efficiency. People need more autonomy and choices. The new seat of administration could be a symbol of this path — a city running on hydro and wind power and acting as a nursery for 20 million seeds and saplings every year.
“It’ll be green, very green, and smart,” Widodo said.
To be able to apply the lesson the president learned as a young man in Aceh will be the biggest test of his remaining time in power.
Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He was previously a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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