Indonesia’s presidential candidates face a downturn in the region’s largest economy politics

As Indonesia’s three presidential candidates prepare to begin official campaigning from Tuesday, they face the challenge of reversing slowing growth in Southeast Asia’s largest economy.

Defense Minister Prabowo Subianto, former Jakarta governor Anies Baswedan and former Central Java governor Ganjar Pranowo will face off on February 14 to succeed President Joko Widodo, who is constitutionally ineligible to run after two terms in office may.

Indonesia’s gross domestic product growth slowed to 4.94 percent in the third quarter, compared to 5.72 percent in the same period in 2022, according to government data.

Indonesia’s economy grew 5.3 percent for all of 2022, its biggest growth in nine years, as the resource-rich country enjoyed a global commodities boom.

Economists say maintaining GDP growth above 5 percent will be crucial to creating enough jobs for the more than one million Indonesians who enter the job market each year.

According to the World Bank, the Indonesian economy added an average of 2.4 million new jobs each year between 2009 and 2019.

According to official figures, Indonesia’s unemployment rate was 5.32 percent in August, 0.54 percentage points lower than a year earlier.

Ganjar and his vice president Mahfud Mahmodin, known as Mahfud MD, have committed to creating 17 million new jobs, with a particular focus on the country’s youth.

Its Quick to Get Work initiative includes plans to expand vocational training and extend free education from the current 9 years to 12 years.

“Indonesian youth must quickly find work or be given the opportunity to start their own businesses to become entrepreneurs,” Arsjad Rasjid, campaign manager for the Ganjar Mahfud ticket, told Al Jazeera, warning that the demographic bonus of the Country in this case could become a disaster if not handled properly.

Arsjad said greater industrialization and education are the only way to meet the population’s labor needs.

“For every low-income household, we want to have at least one college graduate in the family to lift them out of the poverty trap,” Arsjad said.

Arsjad Rasjid says the Ganjar Mahfud ticket focuses on creating jobs for young people [Amy Chew/Al Jazeera]Anies, the former governor of Jakarta, has stressed the need for a more equal distribution of the benefits of the country’s abundant natural resources.

Widodo, popularly known as Jokowi, made “downstreaming” a cornerstone of his economic policy by introducing laws that banned the export of minerals and required raw materials mined in the country to be processed domestically.

Indonesia’s nickel exports increased from about $6 billion to $30 billion from 2013 to 2022 due to higher value-added products such as stainless steel and battery materials.

Tom Lembong, spokesman and economic policy adviser to Anies, said the mining sector has widened the gap between rich and poor and developed and less developed regions.

“Indonesia’s economic growth is now dominated by a small industrial segment, largely linked to commodities such as coal mining, nickel mining and smelting, and palm oil,” Lembong told Al Jazeera.

“Because resource sectors are capital intensive, it is primarily the rich, the capital owners, who have benefited from our commodity-driven boom.”

Lembong said Anies will capitalize on previously neglected growth opportunities such as labor-intensive industries and the services sector, and place economic growth on a “more diversified and sustainable foundation.”

“An example of Anies-Muhaimin’s urbanization-focused growth strategy is to focus on at least 14 cities across Indonesia to make each of them a more dynamic growth engine for surrounding regions,” Lembong said.

Prabowo’s campaign team did not respond to a request for comment.

In their election manifesto, Prabowo and his vice presidential candidate Gibran Rakabuming, Jokowi’s eldest son, promised to continue Jokowi’s downstream policies and investments in infrastructure.

“Fundamentally, we must maintain free trade. But there is another principle that is very important to us, namely the principle of a level playing field. [Processing] raw material [in Indonesia] “It is our right that our people want to be as progressive as you…,” Prabowo said at a Center for Strategic and International Studies (CSIS) forum last week.

Prabowo’s manifesto also promises to continue developing rural areas, providing direct cash aid and building low-cost houses.

Defense Minister Prabowo Subianto has pledged to continue Jokowi’s downstream policies [File: Willy Kurniawan/Reuters]Both Prabowo and Ganjar have promised to complete Widodo’s plans for a new capital in Borneo, while Anies did not mention the project in his manifesto.

Alexander Arifianto, senior fellow at the S Rajaratnam School of International Studies (RSIS) in Singapore, said Prabowo and Ganjar laid out relatively similar economic policies.

“For example, their macroeconomic and industrial policies, with both promising to maintain Jokowi’s ‘downstreaming’ industrial policies, particularly in the mining and oil and gas sectors,” Arifianto told Al Jazeera.

However, Ganjar is likely to favor more state ownership because his Indonesian Democratic Party of Struggle party has a history of supporting economic nationalism and state-owned enterprises, Arifianto said.

Fajar Hirawan, senior economic researcher at the Jakarta-based Center for Strategic and International Studies (CSIS), said the new president should diversify foreign investments to “maintain geopolitical neutrality and hedge against risks in case an investor country struggles and does not invest.” “can” or work with Indonesia for a longer period of time”.

Fajar said the next president must also address environmental sustainability, human resource development and social policy.

“Adherence to sustainable agricultural and industrial standards will determine whether Indonesian exports will be competitive and welcome in global markets,” Fajar said.

Fajar said candidates should also be aware of the possibility of the Israel-Hamas conflict expanding to other regions in the Middle East.

“As a net importer of oil raw materials, all candidates should certainly be aware of this situation. “They should be prepared for the possibility that the conflict will be prolonged and impact the global and domestic economies, putting pressure on inflation, mainly due to energy and food commodities,” he said.

Fithra Faisal Hastiadi, an economist at the University of Indonesia, said inflation was a major concern for low-income earners and a “realistic” economic growth target was 5 to 6 percent.

“For people in the bottom 40 percent of income earners… this (inflation) rate is not affordable… (so) jobs and prices are seen as their top priorities,” Fithra told Al Jazeera.