Global Populism and New Globalized Economy: What Trump Presidency Means for Indonesia

Unlike former US President Barack Obama, who spent part of his childhood living and being educated in Jakarta, President Donald Trump does not have the same understanding of Asia, the Pacific, and Indonesia. (Reuters Photo/Carlos Barria)

By : Edward Parker | on 11:55 PM April 26, 2017
Category : Opinion, Commentary

The election of Donald J. Trump as president of the United States was a political earthquake. Not even the most informed commentators predicted his unlikely ascent to the most powerful political position in the world.

For Indonesia and the world, following on the heels of the presidency of Barack Hussein Obama – America's first black and first truly Pacific president, with a Muslim father and a president who applied reasoned cautiousness, logic and critical thinking to his policies – the election of Trump appears to be a diametrically opposite choice by an angry and marginalized white rural America, left behind by the forces of globalization.

Unlike Obama, who spent part of his childhood living and being educated in Jakarta, Trump does not have the same understanding of Asia, the Pacific, and Indonesia. For Indonesia and Southeast Asia, this is troubling. Trump has already spoken of slapping trade barriers on Chinese products and is likely to take a much harder line with Beijing than previous administrations.

Beijing is likely to respond to any economic or political provocation aggressively and assertively. We are currently living through a turning point in global history. The center of global power is shifting from Washington, D.C., to Beijing – China's "new" Silk Road policy is emblematic of the country's growing global economic and political confidence.

The United States is an empire in decline – to argue to the contrary is to ignore the facts. Like the fall of the British Empire before it, US hegemony is slowly being eroded. A newly confident and assertive Beijing is already carving up the world in its image – its interests and influence already outweigh that of the United States in Africa and Asia.

China now owns global trade – it has quietly purchased a significant chunk of global ports across the world. Furthermore, President Xi Jinping is the most powerful Chinese leader since Mao Zedong. Xi has carefully consolidated his power over the last few years, using an anti-corruption drive to expunge opponents and rivals. He also has almost the unanimous backing of the Politburo – this is rare in China.

The flashpoint to watch for in US-China relations is not trade, but the South China Sea and Taiwan. One miscalculation by either side could unleash conflict, as the rising power clashes with the world's declining power on global fault lines. These fault lines are worryingly close and span into Southeast Asia. Preventing this from happening should be the priority of policy makers at a global level. The threat posed by Islamic State is trivial in comparison.

For Indonesia, another rising global Asian power, the biggest economy in Southeast Asia and the de-facto leader of the Association of Southeast Asian Nations (Asean), Trump has done himself no favors in the eyes of Jakarta. Trump did not ingratiate himself to the world's largest Muslim-majority nation – with a population of more than 250 million people – when he suggested a total ban on Muslims entering the United States during the election cycle. The recent visit by Vice President Mike Pence, aimed at reassuring Jakarta, did not do much to change Indonesia's increasing turn towards China and Chinese investment, and a gradual move away from US influence.

Trump's repeated attempts to implement Muslim bans against several Muslim-majority countries since assuming office did not exactly go down well with Indonesia or its political leaders. Leaders, who after the Jakarta election, are putting a greater emphasis on their Muslim faith and moving away from overtly promoting secular values.

Trump has already sidelined Indonesia and Asia to varying degrees. Most importantly, terminating the only tangible way the United States may have managed to salvage some significance in the region over the coming decade, by scrapping the much-vaunted Trans-Pacific Partnership (TPP) between Asia and the United States. This will undoubtedly be a historical and consequential mistake Trump and America will live to regret, as China steps in to fill the economic and trading void. The United States simply will not have the same market access as China, which has the Regional Comprehensive Economic Partnership (RCEP) – an Asia-China trade deal.

For Indonesia, and the likes of Indonesia's reform-minded and no-nonsense finance minister, Sri Mulyani, the challenge is navigating these global economic and societal shifts, and a declining US influence and populist forces. The Islamic Defenders Front (FPI) protests, which played a huge role in the Jakarta election, are the same global movement but of a local color. Angry young men are seeking a scapegoat to blame for the forces of globalization. Forces they do not understand – and seeking to turn the historical clock back. They are angry that they cannot find jobs in an increasingly open and competitive Indonesian economy, angry at the marginalization they feel and a sense of being left behind by modern "Western" globalization, and angry at what they see as an erosion of perceived "Islamic values," which are now being perverted for political purposes.

The Indonesian government is already moving to address this by injecting greater investment into education and human capital, infrastructure and basic health care. The challenge now is accelerating this so that more Indonesian graduates have the hard and soft skills to find work in an increasingly digital economy, and an economy that increasingly requires the analytical, critical thinking and technical skills to fill its rapid economic development.

It is telling that many graduates cannot find work, and yet at the same time, many businesses cannot find suitable employees. The challenge is addressing this education and skills gap so that the Indonesian economy can continue to advance and not fall into accepting populist rhetoric or embracing hardline Islamism, which would see the country move back, not forward.

The next few years of the Trump presidency will likely see further political, economic and policy shifts. For Indonesia, like the rest of the world, navigating the competing pressures of populism – saying no to radicalism – and putting in place the necessary measures to compete globally in a globalized economy will be the challenge.

Edward Parker is a contributor and consultant, based in Jakarta. The views expressed are personal. He can be followed on Twitter @Ed_SEAsia.

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