Indonesia

News this week that Bank Indonesia will prohibit foreign currencies from being used in domestic transactions in Indonesia further added to analysts’ and investors’ concerns about the country’s fragile economy, and about the economic strategy of President Joko Widodo. As the Wall Street Journal reported, the law prohibiting the use of foreign currency in settling domestic transactions was actually passed years ago, but like many Indonesian laws it was not put into practice for years---until now. The volume of transactions in Indonesia conducted in foreign currency is substantial---the Journal reports that “transactions within the country in currencies other than rupiah amount to $73 billion a year,” in a country with a GDP of around $900 billion. Many transactions are conducted in foreign currencies because companies---particularly large investors in Indonesia in mining and other resources sectors---do not want to hold large sums of rupiah, which has been a volatile currency since the late 1990s Asian financial crisis. Instead, they want to conduct transactions in U.S. dollars, euros, yen, or (in some cases), renminbi. The value of the rupiah fell, this past spring, to its lowest against the U.S. dollar since the 1990s Asian financial crisis; Indonesia’s central bank clearly hopes that this new regulation will help stem the rupiah’s slide. Whether or not this measure works to stem the rupiah’s weakness, it could add to concerns that Indonesian leaders do not have a clear direction for economic policy. Some companies clearly are annoyed at having to work with these new regulations, which will require them taking more risk in the financial transactions, though the new rules are unlikely to lead any large investors to leave the country. But the law further muddles Jokowi’s policy direction. President Jokowi has offered a vision of upgrading Indonesia’s physical infrastructure---its roads, ports, power plants, and other critical infrastructure---and of attracting foreign investment commensurate with the size of Indonesia’s consumer market and the size of its workforce. However, under Jokowi growth has faltered and the much-needed investment has not yet materialized. In the first quarter of the year, Indonesia’s growth slipped to its slowest rate in six years. Consumer spending appears to be slowing as well, probably in response to a weaker economy and a weakening job market. As decisive as Jokowi often seemed as mayor of Jakarta, he and his administration have repeatedly seemed indecisive since he became president, and on economic issues his policy direction has fluctuated the most. Forcing companies to use only rupiah may be a necessary move, but it comes in the wake of other measures that have not exactly been welcoming to investors. The president also has decided to renegotiate bilateral investment treaties with a number of countries, including Singapore, the largest investor in Indonesia last year. He has enthusiastically endorsed the idea of several massive, state-run manufacturing projects, like building a “national car” such as Malaysia’s national car Proton. But there is little evidence that a national car project can eventually be profitable; despite huge state subsidies, Proton has repeatedly struggled to make money. Meanwhile, the Jokowi administration has not substantially liberalized the Negative Investment List, the list of sectors in Indonesia in which foreign investors are banned or have their investments sharply limited. Yet at the same time, Jokowi has used several high-profile speeches, such as his speech to the APEC CEO summit last autumn, to tout his idea of Indonesia as a place with less red tape---that the time to invest in Indonesia is now. “We are waiting for you to come to Indonesia,” Jokowi told a group of potential investors. In his first year in office, Jokowi may be simply feeling his way on economic policy, as well as trying to navigate a legislature where his party is not dominant and where PDI-P contains factions that do not always get along. Jokowi is also a natural politician who understands that a strain of nationalist, protectionist discourse has always existed in Indonesian society, and that this strain remains strong today. However, Indonesia cannot upgrade its infrastructure, position itself as a shipping hub, produce reliable electricity, or add value to its manufacturing industries without substantial investment, both from large domestic companies and from foreign firms.

Two weeks ago, a senior aide to Indonesian President Joko “Jokowi” Widodo confirmed that the Indonesian leader plans to make his first visit to Washington as president in June. Thus far, despite hopes in Washington that Jokowi’s term as president might usher in closer ties to the United States, the U.S.-Indonesia relationship has remained roughly where it was before Jokowi took office. The bilateral relationship is generally warmer than it was in the 1990s and early 2000s, but the two countries’ strategic, economic, and cultural relations still lag far behind those the United States enjoys with many other partners in Southeast Asia. Given Indonesia’s massive size, and the plans for a new U.S.-Indonesia relationship---the U.S.-Indonesia Comprehensive Partnership is now five years old---the lukewarm economic and strategic ties could be seen as a disappointment. Jokowi’s economic and strategic policies have received a mixed response in Washington, and from American companies. He seems to be continuing the economic nationalism that prevailed in the late days of the Susilo Bambang Yudhoyono (SBY) administration. However, Jokowi’s long-term economic policies still remain unclear. He has used several foreign trips to aggressively woo investment in Indonesia, while simultaneously using speeches to call for a “project-based” approach to foreign investment. A project-based approach seems reasonable on its face but the idea has scared many foreign investors into believing that the government will scrutinize potential investment excessively, in a country where red tape already slows investment possibilities. Jokowi also has decided to favor many unwieldy state enterprises in his plan to expand Indonesia’s physical infrastructure. In the first quarter of the year, Indonesia posted its lowest quarterly growth rate since 2009, during the global financial crisis. And Jokowi must know that economic growth needs to speed up rapidly to provide jobs for all the young Indonesians who will be entering the workforce in the next decade. Jokowi’s strategic vision also remains unclear. Although last year he unveiled a broad new concept of Indonesia as a maritime power, he has provided few specifics of exactly how Jakarta will accomplish this task, beyond general promises to upgrade Indonesia’s maritime infrastructure and to position Indonesia as a shipping and strategic link between the Indian and Pacific Oceans. The visit will provide an opportunity to reset relations and attempt, once more, to build the foundation for much greater bilateral trade, increased U.S. investment in Indonesia, and closer military-to-military ties. For one, the White House should work with Jokowi to begin negotiations on a bilateral investment treaty, which will be critical for increasing trade, and would help reassure U.S. investors that Jokowi is more of a pragmatist, focused on growth, than an economic nationalist. In addition, the Obama administration should utilize the visit to assess how aggressive Jokowi plans to be in using Indonesia’s power in Southeast Asia to push other countries in the region to embrace democratic transitions and human rights. Jokowi’s predecessor, SBY, took steps to do just that, especially in dealing with Myanmar, but Jokowi enjoys a level of credibility as a democrat---the first Indonesian leader not from the traditional elites---that would give him even greater leverage in dealing with Myanmar, Cambodia, Thailand, and other nations in the region that have seen their democratic transitions stall. In particular, the voice of ASEAN’s largest power and most vibrant democracy may be critical in the months after Myanmar’s elections this autumn, when the country’s transition will be most fragile. Finally, the White House could use the Jokowi visit to push military-to-military ties forward. The Obama administration should press Jokowi to expand upon and explain his vision for Indonesia’s maritime power, offering further specifics about how he plans to modernize the country’s navy and build a new coast guard, which is supposed to be independent of the navy within a year. The White House could further offer to help Jakarta with this naval and coast guard expansion, with training programs for Indonesia’s new coast guard officers, joint exercises with the U.S. coast guard, and possibly the sale of older U.S. Coast Guard vessels to the new Indonesian force.

Ashlyn Anderson, Lauren Dickey, Darcie Draudt, William Piekos, and Ariella Rotenberg look at the top stories in Asia today. 1. Shinzo Abe visits the United States. Japanese Prime Minister Shinzo Abe visited the United States this week to discuss the future of U.S.­-Japan relations. Increased security cooperation as well as relations with China topped the agenda. Abe delivered the first-ever speech by a Japanese prime minister to a joint session of Congress. In his speech, Abe described his vision for a stronger alliance between the United States and Japan and expressed his condolences for Japanese behavior in World War II. He announced his determination to “take more responsibility for peace and stability in the world.” U.S. President Barack Obama and Prime Minister Abe both made apparent their determination to see the Trans-Pacific Partnership (TPP) through to the end despite significant competing domestic pressures in their respective countries, but so far neither have indicated that their differences in opinion on the specifics of the TPP were resolved. Abe’s visit also includes stops in San Francisco and Los Angeles with the hope of building momentum for economic and military growth in Japan. 2. Nepal devastated by earthquake. Nepal was hit by a 7.8-magnitude earthquake on April 25; aftershocks have followed. There are now over six thousand confirmed deaths; the final total is predicted to exceed ten thousand, as an untold thousands remain missing. The region, which sits on a fault line between the India and Eurasia plates that have formed the Himalayas, was due for an earthquake, but for various reasons, including rapid urbanization, corruption, and a lack of land-use controls, buildings in the capital of Katmandu were vulnerable to seismic disasters. Rebuilding in stricken areas could cost as much as $10 billion. Rescue efforts are ongoing, though hope is fading as more time passes, and only now is aid reaching more remote villages. The New York Times has put together a list of some of the groups soliciting donations for relief efforts. 3. Indonesian firing squad executes eight for drug-related crimes. Despite appeals from foreign governments, Indonesia carried out the death sentences of seven foreigners and one Indonesian. The execution of two Australians, purportedly the ringleaders of the ‘Bali Nine,’ led to the recall of Australia’s ambassador to Indonesia. Among those executed was also a Brazilian diagnosed with paranoid schizophrenia and bipolar disorder, apparently unaware of his impending execution up until the last minute. A migrant worker from the Philippines was unexpectedly granted reprieve at the last minute following claims that she unknowingly smuggled heroin into the country. Indonesian President Joko Widodo is seemingly committed to a zero-tolerance stance on drug trafficking, and the majority of the Indonesian public believes the death penalty to be an appropriate punishment for the crime. 4. Divisions over the South China Sea continue. The Association of Southeast Asian Nations (ASEAN) summit was held in Malaysia this week. The ASEAN chairman’s statement, while not directly mentioning China, highlighted reclamation work as eroding trust and confidence and undermining stability in the South China Sea. At the summit, the Philippines pushed Southeast Asian countries to take a stand against China’s expanding footprint in the South China Sea, even as Malaysian representatives made clear their aspirations for China to take the initiative to “stop [island-building] work and sit down with ASEAN member states.” Meanwhile, the U.S. military presence in the region is set to expand with access to eight or more Filipino bases for rotational deployments, two of which will be located near contested territory; Japan is also weighing joint air patrols with the United States over the disputed waters. China’s naval chief has tried to alleviate concerns, suggesting that the artificial islands might in the future be used for joint rescue and disaster-relief operations. 5. North Korea allegedly sentenced fifteen senior officials to be executed in 2015, says South Korea intelligence. North Korean leader Kim Jong-un has allegedly ordered the executions of the officials for challenging his authority in the first four months of 2015, South Korea’s National Intelligence Service (NIS) told a closed-door parliament meeting this week. A member of South Korea’s intelligence committee said the NIS official indicated the vice minister for forestry was sentenced for disagreeing with the forestry program, and the vice chairman for the State Planning Commission was executed for objecting to the shape of a science and technology hall. Kim Jong-un, a young leader, has previously used such deadly purges to consolidate power; in December 2013 he infamously executed his uncle, Jang Sung-taek, on charges of attempting to overthrow the state. Bonus: Katy Perry’s dress sparks controversy with China. This week, pop singer Katy Perry touched a nerve with China when she wore a glittery green dress covered in sunflowers to perform in Taipei, Taiwan. The sunflower happens to be the emblem used by Taiwan’s anti-China protestors last year. Perry also took a Taiwanese flag from an audience member and wore it as a cape as she sang her song, “Unconditionally.” Importantly, the now-infamous sunflower dress is not new to her concert wardrobe; Perry has sported those sunny yellow petals several times since she kicked off her tour in May.

Ashlyn Anderson, Lauren Dickey, Darcie Draudt, William Piekos, and Ariella Rotenberg look at the top stories in Asia today. 1. Lee Kuan Yew, founding father of Singapore, dies. Lee Kuan Yew, who transformed Singapore into one of Asia’s wealthiest and least corrupt countries during his time as founding father and first prime minister, died on Monday. Lee was prime minister beginning in 1959, after Singapore gained full self-government from the British, until 1990. While his leadership was often criticized for suppressing freedom, his advocacy of “Asian values” and development models succeeded in making Singapore an international hub of business, culture, and finance. The funeral for Lee, to be held on Sunday, will be attended by many current and former world leaders, including India’s Narendra Modi, Australia’s Tony Abbott, Indonesia’s Joko Widodo, and a U.S. delegation that includes Bill Clinton, Henry Kissinger, Thomas Donilon, and Kirk Wagar, the current U.S. ambassador to Singapore. 2. Indonesian president completes first bilateral foreign visits. This week, President Joko "Jokowi" Widodo traveled to Japan and China, marking his first bilateral foreign visits since taking office last October. He started his tour with a four-day official visit to Japan, a fellow democracy and maritime neighbor, where Jokowi and Japanese Prime Minister Shinzo Abe agreed to boost security and economic ties and launched an initiative to increase Japanese investment in Indonesia. Jokowi was also wooed by Japan’s bullet train system and is considering introducing a Japanese system in Indonesia. On Thursday, Jokowi traveled to China, where he signed a number of memorandums of understanding. Courting controversy after some media outlets reported that he said China had no legal claim to the South China Sea, Jokowi clarified that Indonesia would remain neutral in the dispute. 3. South Korea announces intention to join China’s proposed development bank. South Korea’s Ministry of Finance released a statement on Thursday it would seek to be a founding member of the China-led Asian Infrastructure Investment Bank (AIIB), through which Beijing hopes to fund infrastructure development throughout the region. While the United States has voiced concerns about the AIIB’s governance, South Korea’s statement makes reference to the importance of ensuring high levels of transparency and governing structure, tied into existing multilateral development banks. Seoul joins the UK, France, Germany, and Italy as U.S. allies that have announced their intention to be founding members of the AIIB. The move represents Seoul’s latest attempt to navigate increasing rivalry between China, its largest trading partner, and the United States, its security guarantor. Currently the U.S. ally is actively debating the U.S. military’s introduction of Theater High-Altitude Area Defense (THAAD) missile defense systems, which Washington promotes as a deterrent to the North Korean threat but Beijing claims is a thinly veiled U.S. attempt to constrict China. 4. Chinese police raid NGO offices. This week, Chinese police forces seized financial documents and computers from a high-profile nongovernmental organization (NGO). Members of the anti-discrimination group, Beijing Yirenping Center, said that twenty men in police uniforms burst into their offices before dawn on Tuesday morning. On Friday, Lu Jun, head of Yirenping, announced an ongoing investigation into the seizures, which he claims were illegal. Lu told reporters that the raid was likely in response to his organization’s campaign to pressure the Chinese government into releasing five detained women’s rights activists. Police administrators have not commented on or confirmed the raid. Since President Xi Jinping came to power, dozens of human rights activists have been apprehended as part of a broad crackdown on social activism and political dissent. The detention of the five activists on International Women’s Day captured the world’s attention, prompting calls from U.S. ambassador to the UN, Samantha Power, demanding their release. 5. Okinawa’s governor orders halt to base construction. Early this week, Takeshi Onaga, the governor of Okinawa, ordered the suspension of work on a new American military airfield at Camp Schwab. The relocation of U.S. forces to a base near the village of Henoko has been delayed for years by local opposition, who fear the environmental impact of construction and the long-term implications of a new base for Okinawa’s future. Onaga, who was elected governor last December in part because of his promise to halt construction of the base, instructed Japan’s defense ministry to stop work after local officials found builders had damaged coral reefs. Tokyo has said it will ignore the order and continue with the project; Onaga has threatened to revoke a maritime drilling permit should survey work and construction continue. About half of U.S. military personnel—which total nearly fifty thousand—are stationed on Okinawa. Bonus: Burger King perfume soon to be on sale in Japan. For one day only, on April 1, Burger King will release a Whopper-scented perfume to the Japanese public. The fragrance, incidentally named “Flame-Grilled,” will not be the first Burger King scent to hit the market. Back in 2008, the fast food joint released “Flame by BK,” a body spray for men described as “the scent of seduction with a hint of flame-broiled meat.” This year’s scent will be available for the budget-friendly price of 5,000 yen, or roughly four U.S. dollars.

It has been less than a year since Joko “Jokowi” Widodo won the Indonesian presidential election, calling on his vast support on social media and from young activists to defeat the better funded and better managed campaign of Prabowo Subianto. Although Jokowi blew a huge lead in the polls before the vote and then rallied to win the election, he still came into office shouldering extraordinarily high expectations from many Indonesians. Jokowi was the first president not to come from the elites who had dominated the country since Suharto’s time. He was also the first to rise up from a position outside of Jakarta, demonstrating the value of Indonesia’s process of decentralization and---supposedly---Jokowi’s commitment to democratization. Jokowi’s campaign style, though at times ineffective, also bolstered these hopes. He refused to engage in the kinds of dirty and anti-democratic campaigning that his rival allegedly used. Jokowi also publicly disdained the grandiose trappings of Indonesian campaigns for a simple, direct approach that consisted of traveling widely, pressing the flesh, and giving straightforward, down-to-earth speeches about the practical policies he hoped to implement in office. The speeches sometimes were criticized by political commentators as banal, but their ordinary style of delivery, devoid of bombast, appealed to many Indonesians. Since becoming president, Jokowi has indeed implemented some of the programs he promised on the campaign trail. Most notably, he has pushed through a subsidy program that will help the poorest Indonesians get health care and public education; the program is modeled on successful, similar programs that Jokowi launched during his mayoral career. Jokowi also made the difficult decision to cut Indonesian fuel subsidies, which long had been considered political dynamite---the previous president, Susilo Bambang Yudhoyono, did not cut subsidies in part, most likely, because he worried that the cuts would turn the population against him. (The drop in global oil prices made it far easier for Jokowi to cut fuel subsidies, of course.) Yet in a recent poll, Jokowi’s popularity rating among Indonesians had fallen precipitously since the heady days of last autumn. Singapore’s Channel News Asia reported on a poll released about a month ago: “Poll Institute Puspol Indonesia reported that 74.6 per cent of respondents were dissatisfied with Mr. Widodo’s leadership.” Foreign nations are not thrilled by Jokowi’s presidency either: Brazil and the Netherlands have recalled their ambassadors from Jakarta after Jokowi proceeded with executions of suspected drug traffickers hailing from these countries. Although the death penalty is legal in Indonesia, a contrast from the Netherlands and Brazil where the death penalty has been abolished, what has rankled foreign countries is that Jokowi appears to have rejected any clemency claims even before he reads each specific clemency petition from death row inmates, according to numerous press accounts of Jokowi’s policies on punishment for drug dealers. Two Australian convicts face the death penalty imminently, a situation that threatens to undermine Indonesia-Australia relations as well---a bilateral relationship far more important to Jakarta than its ties with Brazil or the Netherlands. The spat over the death penalty is not the reason Jokowi’s popularity has fallen with Indonesians. (In polls, Indonesians generally seem to support tough approaches to drug traffickers, although opinion on the death penalty is mixed in Indonesia.) His popularity has dropped at home amid controversy over his appointment of a police chief under investigation by Indonesia’s anti-corruption commissions, as well as the police’s subsequent move to arrest several of the anti-corruption commissioners. The arrests are seen by many Indonesian analysts as an attempt to muzzle the commission. The police/corruption commission fracas has severely damaged Jokowi’s reputation as a clean politician---someone different from the previous generation of Indonesian leaders. Polling on why Jokowi’s popularity has dropped clearly shows that the denting of his Mr. Clean image is a major reason for the fall. In addition, the police chief appointment and other controversial ministerial appointments have raised questions about Jokowi’s style of governing, as has his decision to issue what seems like a blanket denial of all clemency petitions for death row inmates. Greg Fealy, a scholar of Indonesian politics at Australian National University, says that Jokowi’s domestic and foreign policy troubles raise a worry that “the harsh reality might be that Jokowi,” who never served in a national-level political post before assuming the presidency and has minimal foreign policy experience, “is not equipped to be a good president.” Can Jokowi turn it around? It’s possible, but just as in the United States, in Indonesia the president usually can get the most done in the first year of his term, before inertia sets in and he or she loses some of the leverage gained by winning the presidential election. Jokowi is about halfway through his first year. He has six months to get his administration back on track and to push through other major policy initiatives.

Ashlyn Anderson, Lauren Dickey, Darcie Draudt, William Piekos, Ariella Rotenberg, and Sharone Tobias look at the top stories in Asia today. 1. Myanmar declares martial law in Kokang. President Thein Sein announced a state of emergency and three months of martial law in the Kokang Self-Administered Zone, on the border with China, after a series of clashes between the Myanmar army and armed Kokang rebels. Under martial law, administrative and judicial power has been granted to the army’s commander in chief; the imposition of martial law is aimed at securing a ceasefire and political dialogue well in advance of general elections later this year. The conflict is a setback for Myanmar’s semi-civilian government, which took power in 2011 after nearly fifty years of military rule. Myanmar is turning to neighboring China for help even as tens of thousands of refugees are fleeing into Yunnan province from Kokang. 2. Japan emerges from recession, though not as strongly as some hoped. Japan’s economy expanded in the last quarter of 2014 after contraction in the two previous quarters, growing at an annualized rate of 2.2 percent. Though a positive sign, this was lower than economists’ expectation of 3.7 percent growth. Prime Minister Shinzo Abe’s pro-growth policies—known as Abenomics—have had some successes: for example, borrowing costs are being kept low, the stock market is up, and annual exports increased in January the most since late 2013. However, it also is to blame for a sales tax hike last April that precipitated lower consumption and the two quarters of contraction, which required the Bank of Japan to expand monetary stimulus. A second sales tax hike, initially scheduled for October 2015, has been delayed. 3. Modi targets defense industry in his latest drive of the ‘Make in India’ campaign. In an effort to reduce India’s reliance on defense imports, Prime Minister Narendra Modi called on foreign companies to manufacture defense equipment in India. As the world’s top importer of weaponry, Modi said on Wednesday, “this is an area where we do not want to be number one,” in his inauguration at Aero India 2015 in Bangalore. The defense industry announced $8 billion of spending for new warships, and Modi pledged to ease the process of setting up defense manufacturing joint ventures in India. Israel’s defense minister met with Modi on Thursday, welcoming greater defense cooperation; Israel is already one of India’s top arms suppliers. 4. Indonesia to execute two Australians for drug trafficking despite diplomatic pressure from Australia. In another threat to relations between Indonesia and Australia, Indonesian President Joko “Jokowi” Widodo announced that the execution of two Australian national on death row will not be delayed, despite the protestations of Australian Prime Minister Tony Abbott. In discussing the case with reporters, Abbott reminded Jokowi of the contributions Australia made in the aftermath of the 2004 tsunami and asked that he repay that generosity by sparing the two Australians. Indonesian authorities arrested Andrew Chan, 31, and Myuran Sukumaran, 33—members of the “Bali Nine” drug trafficking ring—in 2005 as they attempted to smuggle eighteen pounds of heroin out of Indonesia and to Australia; the penalty for drug trafficking is death. Australian Foreign Minister Julie Bishop has been in contact with Indonesia’s vice president in continued efforts to broker a deal. 5. Former Thai Prime Minister Yingluck Shinawatra faces charges for botched rice subsidy scheme. Thailand’s attorney general filed charges against the former prime minister for a rice subsidy scheme in which the government bought rice from Thai farmers at above-market rates, costing the government billions of dollars. She faces a jail sentence of up to ten years for criminal negligence and will be banned for politics for five years. Supporters of the charges say that the rice subsidy scheme was a corrupt plan to buy rural votes; skeptics believe the prosecution is just a way to curb the influence of Yingluck and her brother, former Prime Minister Thaksin Shinwatra. The action comes after the military seized power in May 2014, claiming to restore order after months of protests against Yingluck’s government. Yingluck’s brother Thaksin was also ousted by a military coup in 2006; the Shinawatra family is popular among rural voters but disliked by the middle class and elite. The indictment of Yingluck by the military-led government , who was democratically elected, has led to strained ties with the United States. Bonus: Mark Zuckerberg and Prince William tackle the Mandarin language in Chinese New Year greetings. At the start of the year of the sheep—or goat or ram, for some—Facebook’s chief executive officer Mark Zuckerberg and Prince William, the Duke of Cambridge, have both sent new year greetings to Chinese speakers. Zuckerberg seems keen to make China his Facebook friend, mentioning that his office will have a party to ring in the new year; Prince William’s words received an equally warm reception ahead of his bridge-building tour of China next month.

Ashlyn Anderson, Lauren Dickey, Darcie Draudt, William Piekos, Ariella Rotenberg, and Sharone Tobias look at the top stories in Asia today. 1. Taiwanese plane crashes into river, resulting in at least thirty-five deaths. TransAsia GE235 lost engine power shortly after takeoff from Taipei’s Songshan Airport on Wednesday. The twin-propeller plane was carrying fifty-eight passenger and crew; eight are still unaccounted for. Preliminary reports suggest that the pilots shut down the wrong engine after the other stalled; the pilots, both of whom were killed, have been widely praised for avoiding buildings in Taipei’s urban center. Harrowing imagery from a car dashcam shows the plane losing altitude and clipping a bridge before crashing into the Keelung River. The accident is the second in seven months for TransAsia Airways. 2. Japanese Diet adopts anti-terrorism bill. On Thursday Japan’s Lower House passed a resolution denouncing terrorism as well as encouraging the Japanese government to step up humanitarian aid to countries in the Middle East and Africa; the Upper House passed the bill on Friday. The bill was prepared by the ruling Liberal Democratic Party and coalition partner Komeito; concerns voiced by opposition parties resulted in a modified resolution with toned-down language. The resolution follows the recent beheading of two Japanese hostages by ISIS: Haruna Yukawa on January 24 and Kenji Goto on January 30. On January 20, ISIS had asked Japan for a $200 million ransom—the same amount Japanese Prime Minister Shinzo Abe had offered in non-military assistance for countries working to counter the ISIS threat—which Japan refused to pay. The resolution comes at a time of domestic debate in Japan over the international role of its military; Prime Minister Abe is seeking a change in the pacifist constitution that would widen the legal options for Japan’s Self-Defense Forces. 3. Indonesian President embarks on his first bilateral visit abroad. Joko "Jokowi" Widodo arrived in Kuala Lumpur on Thursday to hold meetings with Malaysian Prime Minister Najib Razak on issues of maritime boundaries and the treatment of Indonesian migrant workers in Malaysia, along with economic and security issues. His visit coincided with the release of a controversial vacuum cleaner ad in Malaysia telling its audiences to “fire your Indonesian maid now.” The treatment of Indonesian domestic helpers has been a frequent area of contention between the two countries; the vacuum ad has stirred tension just in time for Jokowi’s official visit to deepen bilateral ties. He will also travel to Brunei and the Philippines to complete his five-day introductory visit to ASEAN member countries. 4. China cuts reserve rate to promote growth. For the first time in over two years, China’s central bank cut reserve requirements. The move dials back the amount of cash banks must hold from lending, freeing up more money for banks to lend and hopefully stimulating the Chinese economy. The Chinese economy is facing a number of pressures, both internal—such as high local government debt and a slowdown in real estate investment—and external—including falling global commodity prices and easing measures in other countries. According to an official survey, China’s manufacturing sector shrank in January of this year, the first time it has done so since September 2012. In 2014, China missed its targeted growth rate (7.5 percent), posting 7.4 percent for the year, the lowest in over two decades. 5. South Korean soldier gets the death penalty for killing fellow troops. A military court has sentenced to death a twenty-three-year old sergeant, surnamed Lim, for killing five unarmed colleagues in South Korea barracks, including a superior officer. He was also found guilty of defecting from his unit with weapons. No executions have been carried out in South Korea since 1997, so the ruling is more likely to result in life in prison without parole. The soldier’s defense lawyer said that he would appeal the case to a higher military court, arguing that his client was the victim of bullying and suffered from paranoia. The incident was the worst killing spree since 2005, when a soldier killed eight people and injured two. In South Korea, all males are conscripted for two years of military duty, and incidents of bullying, suicide, and mental health problems are not infrequent. Bonus: Argentina’s president mocks Chinese accent. During a visit to Beijing centering on much needed bilateral economic and infrastructure agreements, Argentine President Christina Fernández de Kirchner caused a furor by mimicking a Chinese accent on Twitter, swapping L’s for R’s in the Spanish words “petróleo and arroz” (petroleum and rice). President Kirchner followed up with a half-apology, even sending a final tweet from Beijing with “goodbye” in Chinese.

Among his supporters, Indonesian President Joko “Jokowi” Widodo raised expectations so high, before he was actually elected, that he was bound to disappoint them. Somewhat like U.S. President Barack Obama, Jokowi seemed to fulfill different images of hope for different supporters, even if Jokowi himself did not try to actually cultivate all of these images. So, it was inevitable that some aspects of Jokowi’s early months as president would be a letdown. The new president ran on the Indonesian Democratic Party of Struggle (PDI-P) ticket, so to some extent he had to reward key members of the party after his election. Thus, there was the appointment of Puan Maharani, the daughter of PDI-P leader and former President Megawati Sukarnoputri, to a senior government post, as well as the attempt to appoint Budi Gunawan as police chief despite allegations of corruption against him—he too is close to Megawati and other PDI-P leaders. Budi Gunawan and Megawati’s daughter are but two of the PDI-P–backed officials Jokowi has tried to put into high positions despite their lack of qualifications. One could also list among those unqualified for their posts Jokowi’s defense minister, Ryamizard Ryacudu, who has been linked to past human rights abuses in outlying provinces like Aceh and Papua, and Rini Soewandi, the state-owned enterprises minister. Jokowi cannot divorce himself from the reality of Indonesian politics. Still, after his election he could have drawn on his sources of legitimacy—his popularity with ordinary Indonesians, his own personal ground network of supporters, his massive following on social media, his support among many liberal opinion leaders—to keep to a minimum the number of Megawati allies he had to stick into cabinet positions. In addition, he could have used the legitimacy provided by his election, which showed that the PDI-P needed him more than he needed the party, to at least place Megawati loyalists in less important cabinet positions. As it is, the appointment of so many Megawati loyalists, with such dubious backgrounds, badly undermines Jokowi’s pledge to build a cleaner and less politicized national government. Since corruption remains probably the biggest obstacle to higher growth, and since fighting corruption rests on signals from the top of the government, Jokowi’s decisions could seriously impede the anti-corruption battle in Indonesia. The fact that the new president will try to strengthen the corruption eradication commission, that Jokowi himself is known to be personally clean, and that the president also has appointed capable and clean ministers to other posts, may not be enough to outweigh the signal sent by bad appointments. In addition, Jokowi’s economic policy remains muddled in some key areas. Cutting fuel subsidies is critical to fostering growth, as is Jokowi’s plan to improve Indonesia’s physical infrastructure, which badly lags that of competing nations in the region. But Jokowi needs someone to pay for all his planned infrastructural improvements, since Jakarta certainly does not have the money to do so. Yet Jokowi’s administration has demonstrated a mixed, and somewhat discouraging, approach to foreign investment. On the one hand, Jokowi has met with a range of foreign investors and used multiple speeches at high-profile venues to promise to implement the kinds of reforms investors long have craved in the country. He also has enlisted the strong backing of the Asian Development Bank for his plans to upgrade the country’s infrastructure and for his other economic development projects. On the other hand, Jokowi’s signals on corruption are not exactly welcome news for foreign investors. And while the president’s policy of blowing up trawlers fishing illegally in Indonesian waters is popular at home, it is an over-the-top means of enforcing Indonesia’s territorial rights, one that threatens to further alienate investors from countries like China, whose boats are in danger of being destroyed. In addition, the president has issued mixed signals on resources investment in Indonesia. Like the previous government, Jokowi’s government reasonably wants to keep more value from its minerals in the country, and has pressured foreign investors to build processing facilities in Indonesia or else be forced to abandon their investments. But there remains the real threat that Jakarta will make deals with the big resources investors, receive pledges that foreign companies will build processing plants, and then tear up the deals before their terms are up. In a country where investment in resources is highly unpopular, particularly among many of Jokowi’s core supporters, the president has not shown that he, too, could fall into this trap of failing to honor contracts.

Without any doubt, the first months of Indonesian President Joko “Jokowi” Widodo’s first term have delivered some impressive successes. The president’s “smart card” and “health card”—cards sent out to poor Indonesians guaranteeing them a certain number of years of free medical care and schooling, as well as state subsidies for school supplies—have gone out to millions of Indonesians. In the long run, this new social welfare program will likely bring dramatic improvements in education and health indicators for many of the poorest in the country. The cards, which Jokowi started during previous mayoral positions, thus deliver on one of Jokowi’s major campaign promises. And although they aren’t cheap, the cards can be paid for by the cuts in fuel subsidies Jokowi has enacted, another bold move. Previous Indonesian presidents had refused to cut fuel subsidies, which had become the third rail of Jakarta politics, even though the subsidies did more to benefit rich and middle-class car-driving Indonesians than they did to actually help the poor. But Jokowi slashed the subsidies, publicly announcing that he would do so even if the cuts wound up making him unpopular, since reducing subsidies were critical to restoring fiscal health. Jokowi has been somewhat lucky—the plummeting global price of oil has meant that, although the president cut fuel subsidies (other than on diesel, where the subsidies remain), the price of fuel for Indonesian drivers today is actually less than what it was before Jokowi made the cuts, cushioning the blow of Jokowi’s decision. Still, Jokowi’s resolve seems to have impressed Indonesians, even those who could be affected by the fuel subsidy cuts. The president also has, rhetorically, shown himself to indeed be willing to diverge from long-standing government positions on some of the most difficult issues in Indonesia. During a visit to Papua, the province with the most restive ongoing conflict—some might say insurgency—Jokowi was asked about an outbreak of recent violence in early December that left several Papuans dead. Local security officials assured the president that security forces in Papua, who have over decades amassed a record for brutality and obfuscation, were attacked by armed Papuans and simply were forced to respond. This report contradicted many other local accounts of what happened, which suggested that security forces fired on hundreds of unarmed Papuan protestors. Previous Indonesian presidents simply would have accepted the assurances of security forces and local officials in Papua, since there was seen to be little political benefit in questioning them, and potentially alienating the military, which still maintains tight control in Papua. But Jokowi questioned whether the report provided to him was accurate, the first time an Indonesian president has doubted the security forces in Papua. Jokowi looks likely to establish some kind of independent investigation into the violence in Papua, which also would be a first for Indonesia. In part two, we will examine how, despite these successes, some of the shine has begun to come off of Jokowi’s reputation as a clean politician. In addition, we will examine how Jokowi’s foreign policies, including his policies toward international investment, appear to be poorly thought out and, ultimately, courting disaster.

Ashlyn Anderson, Lauren Dickey, Darcie Draudt, William Piekos, Ariella Rotenberg, and Sharone Tobias look at the top stories in Asia today. 1. New  Year’s Eve stampede in Shanghai. A deadly stampede broke out among the hundreds of thousands of people gathered along Shanghai’s Huangpu River waterfront on New Year’s Eve, resulting in thirty-six deaths and forty-nine hospitalizations. This past Wednesday, grieving loved ones gathered in memorial of those lost. Ahead of the festivities, the government feared overcrowding and went so far as to cancel a planned light show along the Bund; predicting smaller crowds than in previous years, five thousand fewer officers were posted during the celebration, and those on duty were unable to control the crowds. Beijing’s censors and police have been hard at work in the days following the stampede to restrict interviews with relatives of the victims and independent reporting of the incident. Some experts, including CFR Senior Fellow Elizabeth Economy, have argued that Chinese President Xi Jinping has squandered an important opportunity to demonstrate leadership through compassion and understanding for his people during this time of mourning. 2. Sri Lankan president concedes defeat in electoral upset. In the first presidential election since the end of the Sri Lankan civil war in 2009, former President Mahinda Rajapaksa conceded defeat to former ally and government minister, Maithripala Sirisena. Winning 51 percent of the vote, President Sirisena was sworn in on Friday in the wake of a contentious election. President Sirisena has promised to reform the island’s corruption-laced government and establish “equal relations” with India, China, Pakistan, and Japan. Though the United States welcomed the new president and peaceful elections, some experts speculate that Sri Lanka may begin to distance itself from China under the new administration. 3. AirAsia Flight 8501 from Indonesia to Singapore crashes. An Indonesian affiliate of the Malaysia-based airline AirAsia crashed in the Java Sea with no survivors en route from Surabaya, Indonesia, to Singapore on December 28. The crash was the third fatal airline accident involving a Malaysian airline in 2014. Thus far, rescuers have recovered 48 bodies out of 162 passengers and crew, and search and rescue teams detected pings believed to be from the plane’s black box recorder on Friday. The plane was found to have taken off without proper permits, and as a result, Indonesia’s Transportation Ministry levied sanctions against five airlines that have flown routes without authorization. It will also conduct investigations in five of the country’s largest airports. As CFR Senior Fellow Joshua Kurlantzick notes, Indonesia is known to have a poor flight safety record, especially when compared to other middle-income countries. 4. Violence in Bangladesh on the anniversary of January 2014 elections. On Monday, the one-year anniversary of the 2014 national elections in Bangladesh, four people were killed in political protests by the opposition Bangladesh National Party (BNP). In last year’s elections, which was boycotted by the BNP, over half the seats were uncontested, helping the Awami League to win more than a two-thirds majority. Opposition leader Begum Khaleda Zia, who has been confined to her office by security forces this week, called on her supporters to enforce a “nonstop blockade” after the government banned demonstrations. In another incident on Wednesday, police shot dead two protesters and rounded up hundreds more; a third person was killed by anti-government protesters in a separate incident as well. 5. The United States steps up sanctions on North Korea; South Korean nuclear plants hacked. Citing a U.S. FBI report that concluded North Korea was behind the damaging cyberattack on Sony Pictures last month, the White House issued an executive order on January 2 for sanctions that target North Korean leaders. The sanctions apply directly to three North Korean state-owned businesses and ten high-level individuals associated with the regime. The executive order expands U.S. sanctions on North Korea for its “provocative, destabilizing, and repressive actions and policies.” North Korea has denied it was involved in the attacks. The Korean Peninsula has been the focus of not just one but two cyberattack events, as a South Korean civil nuclear energy company was hacked in December, accompanied with the release of personal information of the Korea Hydro and Nuclear Power Company’s ten thousand employees. South Korean authorities have traced the attack to internet protocol (IP) addresses based in the northeastern Chinese city of Shenyang (which is also where the Sony attack is purported to have originated). Bonus: “Nuts” Korean heiress indicted for endangering a flight. Cho Hyun-ah, former vice president at Korea Air and daughter of its chairman, is being indicted for violating aviation safety after going nuts on an airplane for being served macadamia nuts in the incorrect fashion. She stalled a flight bound for Seoul from New York’s John F. Kennedy Airport because a flight attendant gave her nuts in a bag instead of on a plate, and ordered the plane to return to the gate. She was indicted on five counts of violating aviation safety laws and interfering with safe navigation.

The crash of AirAsia Flight 8501, though tragic, was not an enormous surprise to anyone who follows aviation in Indonesia, or who has flown repeatedly in Indonesia. This is not to say that AirAsia has a poor safety record; the airline had never had a fatal accident prior to this one, and AirAsia management has responded admirably to the crash. Senior management, including AirAsia CEO Tony Fernandes, have reached out to families of the survivors, trying to keep them updated about information on the search and rescue operations and personally consoling relatives of people who were on Flight 8501. But anyone who knows aviation in Indonesia knows that the country has a horrific record for airplane accidents and that Indonesia has weaker safety protocols regarding aviation than other middle-income countries. Indonesia’s air safety record is more analogous to that of desperately poor and war-torn countries like Yemen, Somalia, or Afghanistan than to air safety in neighboring nations like Thailand, Singapore, or the Philippines. Multiple Indonesian airlines, like the terrible Adam Air, have closed their doors in recent years after suffering numerous accidents. The European Union and the United States have banned many Indonesian airlines from flying into their home markets, while the International Air Transport Association (IATA) has refused to allow Lion Air, Indonesia’s fastest-growing low-cost carrier, to join, because of Lion Air safety record. The International Civil Aviation Organization, a UN agency, ranks Indonesia as one of the least safe air markets in the world. Indonesia is one of the fastest-growing aviation markets in Asia, due to its expanding middle class, the result of more than a decade of solid growth, and its vast territory. Flying in Indonesia, though not safe enough, is still safer than taking one of the rickety inter-island ferries, which have some of the worst marine safety records in the world. Still, just being safer than Indonesia’s horrendous ferries is not a high bar. The Indonesian government needs to take concrete steps to improve aviation safety if it hopes to reassure Indonesians to continue flying within the country, to boost tourism arrivals, and to attract a significant increase in foreign investment. (After all, foreign investors need to travel around the country, and they aren’t going to be taking ferries.) For one, Jakarta needs to implement legislation that will help boost pay for airport managers, air traffic controllers, and aircraft safety inspectors. Low pay attracts mediocre talent, and increases the possibility that airlines could bribe managers, controllers, and inspectors. Recent reports on CNN suggest that AirAsia did not have a license to fly the Surabaya-Singapore route on Sunday, the day of the week that Flight 8501 crashed. According to CNN, “[Indonesian] Transport Minister Ignatious Jonan described the airline’s breach [flying on Sunday] as a ‘serious violation.’ ‘How could they fly? Who would they have to approach to be able to make that flight. It would have to be the airport management or lobby air traffic control,’” CNN reported the transport minister as saying. In addition, Jakarta should take steps to ensure that pilots operating in Indonesia are better-informed, better-trained, and working on adequate rest. Indonesia this week already took a positive first step by mandating that all pilots attend briefings before takeoff with flight operating officers – the briefings will discuss the weather, the route, and other issues. But the government can take many other steps to improve the quality of pilots operating in Indonesia. Low-cost carriers in Indonesia have become notorious for overworking their pilots, which may be one reason why several of Lion Air’s pilots have been caught with methamphetamines the past three years. (Methamphetamines help you stay awake.) Jakarta needs to implement and enforce stricter regulations on the amount of hours pilots can work per week, and to increase enforcement of random drug and alcohol testing for pilots. In addition, Jakarta needs to make pilot licensing more rigorous and more standardized. According to numerous estimates, within two decades Indonesia will be one of the ten largest aviation markets in the world, in terms of flights flown per day. These estimates, however, assume that Indonesian aviation will be safe enough that growing numbers of travelers will feel comfortable aboard Indonesian domestic airlines. That’s hardly a given.

In the past year, Malaysia’s aviation industry has suffered an unprecedented number of tragedies. Although the odds of any person boarding a flight dying in a plane crash are about 1 in 11 million, three Malaysia-based aircraft have apparently gone down, with no survivors. The latest, AirAsia Flight QZ8501, had been traveling from Surabaya, Indonesia, to Singapore when it vanished over the Java Sea. To some extent, the three Malaysian air disasters are just brutal bad luck. Still, they point to several disturbing trends that raise the question of whether flying in peninsular Southeast Asia is completely safe. The air market in the region has embraced low-cost carriers, leading to a proliferation of flights throughout Southeast Asia, stretching air traffic controllers, and possibly allowing some airlines to expand too rapidly. Indonesian carriers, air traffic controllers, and Indonesian airspace in general have become notorious for weak safety regulations. AirAsia has responded to this crisis much more rapidly than state carrier Malaysian Airline did after the disappearance of Flight MH370 last March, but the opaque, authoritarian politics of Malaysia—which are common in Southeast Asia—will likely make the search and rescue operation, and any inquiry into why the flight crashed, more difficult than necessary. For more on my analysis of Southeast Asia’s aviation climate, go to: http://www.businessweek.com/articles/2014-12-29/why-air-disasters-keep-happening-in-southeast-asia#r=most%20popular.

Despite coming into the Indonesian presidency as a man with minimal foreign policy experience, Indonesian president Joko “Jokowi” Widodo has attempted to launch a bold new foreign policy doctrine. Since the end of the Suharto dictatorship, Indonesian presidents have slowly rebuilt the country’s clout in regional and international affairs, which diminished greatly in the chaotic post-Suharto era. Former president Susilo Bambang Yudhoyono, though considered mostly a failure as a domestic reformer, did restore Indonesian leadership of ASEAN and play a significant role in helping mediate several regional conflicts. Still, no president since Suharto proclaimed so bold a foreign policy doctrine as the former Jakarta mayor just did at the East Asia Summit. The Jokowi doctrine, focused on Indonesia’s maritime trade, infrastructure, and security, announces an intention to vastly expand Indonesia’s maritime power. Whether the country has the resources and the political will to put Jokowi’s grand vision into action remains a serious question. The Jakarta Post has published excellent overview of Jokowi’s maritime doctrine. Jokowi and his advisors developed the doctrine during his presidential campaign and the new president outlined the doctrine in his speech at the East Asia Summit in Myanmar earlier this month. The doctrine posits that Indonesia is a maritime “fulcrum” between Indian Ocean powers (namely, India) and Pacific powers like China and the United States. It also proposes that both oceans should be areas of peace and free trade, and that Indonesia will help protect the natural resources of the seas. The Jokowi doctrine also commits Indonesia to vastly expanding its naval assets, supposedly in order to secure freedom of navigation and trade on these seas. This military build-up will include a drastic increase in naval and coast guard vessels, which should come from a growing military budget; Jokowi plans to increase the military budget to around 1.5 percent of Indonesia’s total GDP, up from less than one percent today. But an increase in the overall military budget does not preclude Jokowi’s administration from making cuts in the budgets of the army and other Indonesian forces, if these cuts are necessary to shift resources to the navy and coast guard. In addition, Jokowi plans to significantly upgrade Indonesia’s ports and other shipping infrastructure, so that the country can become more integrated into trade between the Indian and the Pacific oceans. Currently, as Elizabeth Pisani shows in her recent book Indonesia Etc: Exploring the Improbable Nation, the cost of processing and shipping goods like tuna from Indonesia much higher than regional standards. (Pisani finds that many Indonesian tuna fisherman would rather run their rickety motorboats a full day’s trip to the Philippines, despite the enormous costs of the trip in gas, to sell their tuna there, rather than navigating Indonesia’s expensive and corrupt ports and infrastructure.) In theory, the Jokowi doctrine sounds practical, wise, and a welcome look toward foreign policy for a leader expected to focus on the country’s huge domestic challenges. But the doctrine faces significant obstacles in practice. For one, Indonesia’s increased military spending will only add fuel to the growing regional arms race, and could make China – suspicious of whether Jakarta is expanding its maritime powers in order to more effectively rebut Chinese claims to areas of the South China Sea around the Riau islands. The Riau area has becoming an increasing flashpoint between Jakarta and Beijing. Though other countries in the region will be less worried about growing Indonesian maritime power than China, Malaysia and Singapore still will demand significant transparency in how Indonesia plans to rapidly expand its naval forces, transparency that the Indonesian armed forces are not known for. In addition, drawing down further resources from the army, especially when that draw-down is being led by someone who lacks any military background, could provoke the army’s officers. Army officers in Indonesia today are far less powerful than they once were but retain sizable networks of power and influence. Third, Jokowi’s plans to upgrade Indonesia’s ports and other maritime infrastructure will rest on whether he can attract larger pools of foreign investment than his predecessors did. Indonesia does not have the domestic resources to make the level of infrastructure improvements Jokowi intends to make. Attracting significant investment in Indonesian ports will be hard. Japanese investors have made commitments to help upgrade Indonesia’s maritime infrastructure, but Jokowi’s plans to woo European, U.S., Singaporean, and Australian investors looks shakier. The fact that Indonesia’s main ministries dealing with maritime issues are run by people with minimal maritime experience or, in the case of the defense ministry, a powerful nationalist with alleged links to human rights abuses, is hardly enticing to most foreign investors.

Slightly less than a month into Indonesian President Joko “Jokowi” Widodo’s term in office, a few aspects of how Jokowi will govern are coming into focus. And since he promised major change in the first hundred days of his presidency, it is fair to analyze how he has done to this (short) point in time. Let’s run down how the former Jakarta mayor, who never held national office before, is doing in several key areas. Jokowi’s Cabinet—Grade: B- Although, on the campaign trail, Jokowi promised a cabinet of technocrats, in keeping with his reputation as an effective manager, in office he has had to deal with the reality that he ran on the Indonesian Democratic Party of Struggle (PDI-P) ticket and that he has to reward political supporters to some extent. So, his cabinet includes PDI-P powers, like Puan Maharani, the daughter of current PDI-P head and former President Megawati Sukarnoputri, who was handed a coordinating ministerial portfolio but does not have the experience or skills to do the job. Worse, Jokowi handed the defense portfolio to Megawati loyalist Ryamizard Ryacudu. This was a horrible choice. As Edward Aspinall notes on the blog New Mandala: It has been a 15-year tradition to appoint civilians to this post, as a symbol of civilian supremacy in the new Indonesia. This appointment breaks that tradition. It also appalls members of Indonesia’s human rights community. As Army Chief of staff back in the mid-2000s, Ryacudu not only infamously praised as ‘heroes’ soldiers who were convicted of murdering a famous Papuan independence campaigner, he also actively tried to sabotage the Aceh peace process and intensify military operations there in the aftermath of the December 2004 tsunami. He is the most conservative former military officer to have been included in a cabinet since 1999. On the other hand, Jokowi appointed highly capable people in other important ministries like finance and education, the highest percentage of women to the cabinet of any Indonesian president in history, and ministers from outside the normal Jakarta elites. In addition, he made the savvy move of using the Corruption Eradication Commission as a veto-making institution to avoid appointing even more political hacks than was apparently necessary. He submitted a preliminary cabinet list to the commission, surely knowing that several of the people he submitted, who had been supported by his party, would be publicly rebuked by the commission for alleged crimes like graft. He then withdrew eight people from his list, all of whom surely were people he did not want in his cabinet anyway. Ability to Work with Parliament—Grade: A- One of the biggest concerns about Jokowi’s ability to govern as president has been the fact that his coalition in parliament controls less than half of the legislature. Prior to his inauguration, the losing presidential candidate, Prabowo Subianto, seemed determined to use his coalition in the legislature, which currently controls more than half the seats, to defeat virtually anything Jokowi might propose. But Jokowi seems to have made a solid start in neutralizing Prabowo’s power in the legislature, so much so that Prabowo saluted Jokowi during the presidential inauguration. Jokowi allies allegedly warned Prabowo and his allies that, if they continued to be obstructive, the new president might push for all kinds of investigations into his opponents’ business activities, legal or not. In addition, in the long run Jokowi still seems capable of potentially luring parties in parliament into his coalition, which would give him the majority in the legislature that he needs for an effective term in office. Whether or not he lures parties in his coalition, facing down Prabowo has shown that Jokowi is a much tougher political in-fighter than he had been given credit for. Domestic Policy Initiatives—Grade: A- Jokowi’s cabinet clearly is designed to focus on domestic policy, which is not surprising. Jokowi earned his reputation as an effective city manager, he has little international experience, and Indonesia faces huge domestic challenges. These daunting challenges include a slowing economy, a growing public deficit, and severe problems with graft in business and politics. Jokowi has promised to cut state fuel subsidies, which are a huge expense and major burden on the government’s budget, and he has vowed that he is willing to be unpopular in order to cut the subsidies. Former President Susilo Bambang Yudhoyono, who clearly understood the need to cut fuel subsidies, never was willing to take this step, likely because he did not have the courage to risk unpopularity. Jokowi deserves significant credit for taking on the fuel subsidy, a third rail of Indonesian politics. Jokowi also this week launched his nationwide Health Card and his national Smart Card. These cards, modeled on programs he initiated as mayor of Jakarta and mayor of Solo, are designed to guarantee the poorest Indonesians a certain amount of health care and education, to be paid for by state funds. However, Jokowi’s administration appears to have rushed the rollout of these national cards. Several leading Indonesian think-tanks have warned that the cards are being handed out before the government has done an effective survey of Indonesia’s poor, or created a nationwide identification system to ensure the cards are not misused. Foreign Policy—Grade: Incomplete As expected, Jokowi has said and done little of significance on foreign policy issues. His foreign affairs minister is a respected former diplomat, but Jokowi himself still has enunciated few clear principles about major regional foreign policy issues. This lack of clarity is not a problem—yet. However, since Indonesia is the most powerful country in Southeast Asia and has increasingly taken on a major regional role in mediating conflicts, promoting democracy, combating terrorism, addressing the complicated ASEAN-China relationship, and other issues, Jokowi’s government cannot avoid foreign affairs indefinitely. And if Jokowi plans to let his ministers dominate foreign policy, he will soon find that on many issues, other countries in the region expect the Indonesian president to personally lead.