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Introduction: The Indonesian Economy in Transition — Policy Challenges in the Jokowi Era and Beyond (Part II)

The Regional Economic Studies Programme and the Indonesia Studies Programme of the ISEAS – Yusof Ishak Institute organized a conference in March 2018 with financial support from the Konrad-AdenauerStiftung to examine key development issues and policy challenges confronting the Indonesian economy. Six of the papers from the conference have been included in the August 2018 issue of this journal. Subsequently, five papers from the conference appear in this issue. Collectively, they cover a number of dimensions that are key to understanding the economic changes in — and challenges to — the Indonesian economy as it seeks to attain high-income status. This special issue starts with Arianto A. Patunru’s article regarding rising economic nationalism in Indonesia. He argues that protectionism has started to make its way back into the country since the early 2000s. Despite some reform initiatives, economic nationalism has amplified under the current administration, and might continue to do so in the near future. The political-economic factors that explain the re-emergence of protectionist measures under Joko Widodo’s presidency form the body of this study. Using the case studies of fuel and rice, he shows that while economic nationalism might prove to be politically rewarding, its detrimental impact on the poor cannot be ignored. It is therefore in Indonesia’s best interest to resist the continuing push for protectionist policies. In the second article, Eve Warburton discusses how, over the course of the past decade, Indonesia’s economic planning has become increasingly developmentalist in orientation. While aspects of this model have deep roots in the country’s history, a more self-conscious developmentalist agenda re-emerged during President Susilo Bambang Yudhoyono’s second term in office (2009–14). Her paper suggests that under President Joko Widodo, a new developmentalism has crystallized further and, arguably, become a defining feature of Indonesia’s political economy. To advance this argument, she draws upon studies of the “new developmentalism” in middle-income and emerging economies. This new developmentalism is characterized by a normative commitment to an activist state that can engineer fast economic growth,