JAKARTA, Indonesia - Indonesia, the world's third-largest democracy, is approaching a critical presidential election that brings to the forefront the country's choices in harnessing its rich reserves of resources, particularly nickel, for the global transition towards cleaner energy sources. As the largest producer of nickel, Indonesia plays a pivotal role in supplying the material needed for electric vehicles, solar panels, and other essential components in the green energy sector.
Under the leadership of President Joko Widodo, Indonesia witnessed a decade of rapid economic growth and modernization, driven in large part by the exploitation of its abundant natural resources, including coal, oil, gas, and palm oil. This economic boom propelled the country to middle-income status. However, as the country heads into the future, voters are increasingly demanding a balance between economic growth and environmental sustainability.
Widodo's administration prioritized economic development by attracting foreign investments and advancing infrastructure projects, such as the construction of the country's first high-speed railway. His legacy project involves moving the capital from Jakarta, plagued by congestion and pollution, to a new city called Nusantara in Borneo. This ambitious undertaking aims to address the challenges faced by Jakarta, including sinking land and severe flooding.
To accelerate the growth of strategic industries, Widodo implemented export bans on certain raw commodities like nickel and bauxite, encouraging companies to establish refineries in Indonesia and add value to the products exported. While this move has its drawbacks, such as limiting trade opportunities and hindering negotiations for crucial materials trade deals, economists argue that Indonesia needs to create a more open trade and investment environment to become a global manufacturing hub for electric vehicle batteries and other competitive products.
However, environmental concerns have emerged as a significant point of discussion in the presidential campaign. Critics of Widodo's capital relocation project argue that it will degrade the environment, destroy habitats of endangered species, and displace Indigenous communities that rely on the land for their livelihoods. Moreover, the government's food estate programs, aimed at enhancing national food security, have faced backlash for causing deforestation, conflicts with Indigenous peoples, and inefficiencies.
All three presidential candidates - Defense Minister Prabowo Subianto, former Jakarta governor Anies Baswedan, and Central Java governor Ganjar Pranowo - have expressed support for Widodo's economic strategies, with slight variations. However, there is a growing call among voters for a greener and more inclusive approach to development.
Indonesia's energy transition away from fossil fuels is another critical issue in the election. As the world's ninth-largest emitter of carbon emissions, the country recognizes the need to shift towards cleaner energy sources. The $20 billion Just Energy Transition Partnership deal is set to support Indonesia's path towards cleaner energy, with each candidate presenting distinct strategies to achieve this goal. However, challenges remain as new coal-fired power plants continue to be built to meet the energy demand of industrial parks, overshadowing the progress towards a sustainable future.
Beyond environmental concerns, job creation, poverty reduction, and managing inflation are also key priorities for voters. While unemployment rates have decreased, the decline in middle-class jobs and a rise in underemployment and informal work pose challenges for Indonesia's aspiration to achieve high-income country status by 2045. Additionally, the impacts of El Niño on global food production create upward pressure on the prices of essential food items, further exacerbating inflation and affecting the livelihoods of everyday Indonesians.
As the election approaches, Indonesians are grappling with crucial decisions regarding their country's future direction. Balancing economic growth with environmental sustainability, advancing the energy transition, and addressing socio-economic challenges are all key issues that the candidates must address to gain the support of the electorate. Ultimately, voters seek leadership that can provide opportunities for economic progress while ensuring a better quality of life for all Indonesians.
