Continuing Jokowi’s Legacy: The Impact of Prabowo and Gibran’s Victory on Indo-China Economic Relations

Yehezkiel Dearma Damanik

The victory of Prabowo Subianto and Gibran Rakabuming Raka in the 2024 Indonesia elections indeed marks a significant shift in the region’s economic landscape. As we know, in his campaign, Prabowo consistently stated his pledge to continue the economic policies of President Joko “Jokowi” Widodo, who focused on overhauling Indonesia’s infrastructure and promoting foreign investment. This continuity has the potential to strengthen the economic ties between Indonesia and China. Prabowo’s victory could potentially lead to an increase in Chinese trade and investment, given his previous role as Defense Minister and his established relationship with China. The warm reception from China President Xi Jinping to Prabowo, even though he came to China as a minister of defense, is a statement regarding the politics and economy of Indonesia, signaling strong diplomatic relations between the two countries, which could further enhance their economic ties.The 2024 Indonesia election results could have significant implications for the economic ties between Indonesia and China.

The winning pair of hopefuls, Defense Minister Prabowo Subianto and Gibran Rakabuming Raka, the mayor of Solo and President Joko Widodo’s eldest son, represent a pivotal moment for Indonesia’s future, particularly in its economic and diplomatic relations with China. This new leadership duo, poised at the helm of Indonesia’s political landscape, brings with them the promise and the peril of shaping pivotal policies that could either enhance or complicate the intricate web of Indo-China economic ties. Their stance on several critical issues could significantly influence these bilateral relations, shedding light on some underlying challenges.

One of the pressing issues under the new leadership is the 14 new ongoing National Strategic Projects (PSNs) focusing on various infrastructural developments across Indonesia under President Joko Widodo after the successful $7.3 billion rail project, funded largely by China. Which is Southeast Asia’s first high-speed railway. It is projected to reduce traffic congestion in Jakarta and Bandung, which currently costs the economy more than $6.5 billion a year.

These projects, privately financed, cover a diverse array of sectors, including industrial estates, toll roads, coastal area developments, and smelter factory construction. Notable projects among these include the development of several industrial estates in Southeast Sulawesi, Central Sulawesi, and Subang, as well as the development of the Pantai Indah Kapuk area and a toll road in North Jakarta. The total investment for all 41 strategic projects, which includes these new additions, is estimated at about Rp500 trillion. This project exemplifies the delicate balancing act Indonesia must navigate in managing its economic partnerships. The continuation of such large-scale projects and investments hinges on the incoming administration’s approach to trade and investment with China. The results of the election could potentially dictate the pace and nature of future collaborative economic endeavors, making the stance of Subianto and Rakabuming Raka crucial in this regard.

Furthermore, diplomatic relations between Indonesia and China have reached a nuanced complexity under President Widodo’s leadership, with China emerging as a key economic partner. Yet, this relationship is not without its tensions, primarily due to concerns over Chinese economic dominance. These concerns have stirred significant discontent within Indonesia, making it a critical task for the new leaders to maintain a balance between fostering ties with China and addressing domestic apprehensions about over-reliance on Chinese investments. The election results could lead to a recalibration of this balance, potentially influencing Indonesia’s broader foreign policy stance, especially in relation to the United States and other regional powers.

Another aspect that the new leadership must consider is the continuity of economic initiatives previously championed by President Widodo. As Indonesia seeks to maintain the momentum of its economic growth and development, the direction set forth by Subianto and Rakabuming Raka will be crucial. Their policies will likely determine the trajectory of ongoing and future economic initiatives, which will, in turn, impact Indo-China economic relations significantly.

Lastly, the ambitious project to relocate Indonesia’s capital from Jakarta to Nusantara in Borneo represents a monumental investment and developmental endeavor. With an estimated cost of over $30 billion, the stance of the new leadership on this project could greatly influence foreign investment dynamics, particularly from China. As this relocation involves massive infrastructural and industrial investment, the approach taken by the new government could either attract further Chinese involvement or encourage a more diversified portfolio of international investments.

Building on the critical evaluation of Indo-China relations under the potential leadership of Defense Minister Prabowo Subianto and Gibran Rakabuming Raka, it is essential to delineate the array of opportunities and challenges that may arise. In terms of future engagement with China, Prabowo has signaled that he fully supports the development of closer Indonesia-China relations and wishes to continue President Joko’s policy of friendship with China. His recent visit to Beijing, at the invitation of the Chinese government, signifies a potential pivot in Indonesia’s foreign policy toward China. Prabowo will continue to strengthen defense ties with China, the exact nature and extent of this engagement will depend on a variety of factors, including regional dynamics, domestic considerations, and the evolving nature of Indonesia-China relations. It’s also important to remember that while Prabowo’s past role as Defense Minister provides some insights into his potential approach, his actual policies as President may evolve in response to changing circumstances. These factors will play a significant role in shaping Indonesia’s economic landscape and its bilateral engagements with China.