Indonesia’s economic growth is being held back by populism

Jan 17, 2019

AT A CONFERENCE in Singapore on January 15th, Indonesian officials were out in force. Four senior ministers, the bosses of three state-owned enterprises and a senior civil servant took to the stage to try to drum up private investment in roads and railways. The audience, mainly financiers, nodded along. Not everyone was convinced, though. “The risks don’t match the returns,” complained one. Red tape is a headache. Changes in government policy could derail an investment. “If things go badly, you get zero.”

Such risks are particularly high in Indonesia at the moment. The country is gearing up for presidential and legislative elections in April. The incumbent, President Joko Widodo, or Jokowi, will face Prabowo Subianto, a former general, in a rematch of the previous vote, in 2014. The two were squaring off in the first of five debates as The Economist went to press. Jokowi’s biggest vulnerability is the...

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