E47: Local, Central & the Blame Game with Dr. Djayadi Hanan

I sat down with Dr. Djayadi Hanan, the director of political science at Paramadina University and the executive director of LSI, to discuss how the pandemic might impact the controversial Omnibus Bill, the push by political parties to bring more power back to the central government and why has Governor Ridwan Kamil’s popularity increased as a result of the pandemic. We also go in-depth into why the palace released a rare video showing a public display of anger by the president.

Below are the main takeaways from the episode: “Local, Central & The blame Game”

Push For A Stronger Central Government

Prior to the pandemic, there had been growing interest by the top political parties to pull back on decentralization and return more power to the central government. Decentralization began after the fall of Soeharto and a regional autonomy law was implemented in 2004.

Over the past six years or so, there has been growing support within PDIP, Golkar and Gerindra to amend the Constitution and bring back a New Order style system where the Upper House (MPR) sets the direction of state policy and provides oversight for the executive branch. Their argument has been that there are too many conflicting national and local regulations and that there lacks policy continuity from president to president, both resulting in slower economic growth.

Since the pandemic, we’ve seen local leaders in Jakarta, Tegal, Semarang, Makassar and others, attempt to implement local lockdown policies for Covid-19, only to be threatened with administrative sanctions by the Widodo government if such moves weren’t halted. According to the law, only the central government has the authority to order lockdowns, but local leaders found the central government slow to move and not doing enough to halt the spread of the virus. Friction between local leaders and the central government became more evident particularly in the early stages of the pandemic.

I spoke to Dr. Djayadi Hanan to obtain his insights on the decentralisation issue and more.

I asked Djayadi how this friction might impact the centralisation trend. He began by stating that, since the impact from the pandemic is so massive, it shows that the central government has limits and needs to work with local governments and can’t do things alone as they want people to believe.

On why the central government denied requests by local governments to implement local lockdowns, Djayadi said, “The government’s hesitance to lockdown is largely because of the incapability of the government to shoulder all the responsibilities that come with a lockdown. We have a Territorial Quarantine Law, however the consequence of this lockdown policy is that the central government has the authority to authorize it, but at the same time, the government has all the responsibilities to serve the needs of the people, but also is responsible for managing everything from logistics, medicine, to livestock. With that, the central government does not have the means to do handle it all. That is why the central government was very hesitant to take lockdown measures.”

Instead, the government opted for “Large Scale Social Restrictions” or “PSBB” as it’s locally known. This is not a strict lockdown as it allows for some travel and movement of people and essentials. Local governments must request approval from the central government before implementing and extending a PSBB.

Djayadi went on to say that the lack of measures taken by the central government shows its weaknesses. Although the central government provided more than Rp.400 trillion in aid, it’s not enough for local governments to manage the crisis, so locals leaders have to become more creative with policies and take their own initiatives to serve their people. Therefore, Djayadi believes that the situation does not strengthen moves to return power to the central government.

“One of the biggest problems with PSBB, is that a lot of people will stay at home and a lot of people won’t have jobs. As a consequence, the government must provide social assistance programs. This program is actually a joint program between local and central in terms of the delivery and also in terms of funding. It is not easy to manage because there are some disputes in terms of the data and also how and when they must deliver the programs. There was a dispute between the central government and Jakarta’s provincial government about how many households must be under the responsibility of the provincial government in order to provide social assistance and how many households must be under the responsibility of the central government,” Djayadi said.

According to Djayadi, recent polls show that the public views local governments as more favourable than the central government when it comes to handling the pandemic. “If we were to compare how local governments such as West Java, Jakarta, Central Java and other local governments deal with the pandemic, people view the local governments as doing a better job.”

The push for centralization has less support among the people since the pandemic. They want more focus on regulations and legislation that are related to resolving the ongoing health and economic crisis, according to Djayadi.

Controversial Omnibus Bill

President Widodo began his second term betting everything on a government initiated bill that would revise or cut over 70 laws in a move to stimulate the economy, create jobs and attract new investment. The Omnibus Bill, as it’s called, has faced heavy criticism for a lack of transparency in parliament and there have been complaints about the bill’s substance, including concerns for the environment, worker rights and a pull back on decentralization. The government had hope to have it passed within the first 100 days of Widodo’s second term, but the health and economic crisis brought on by the pandemic has left the bill’s fate uncertain.

Djayadi says that in addition to the initial concerns about the bill, there is now a debate about whether the government should continue to deliberate the bill given the situation and more pressing issues at hand. “The frame of thought is that the public wants the government to prioritize the necessary policies that directly relate to the Covid-19 pandemic,” he said. When asked whether public sentiment will actually have an impact on the bill’s fate given the government has its own agenda, Djayadi said, “The government wants to move forward with the Omnibus Bill, but the question is, can the government convince the public that this bill is really needed by Indonesia right now for dealing with this crisis in the short term as well as in the long term?” He went on to say, “The government is trying very hard to convince people that the Omnibus Bill will not only improve the country in the long term, but that it will have a positive impact in the immediate term, particularly with an economic recovery.”

Will the bill pass by the end of this year? Djayadi thinks that the bill may pass, but would likely be watered down. “The government really wants to pass this but it will have to remove some of the elements, such as those that are heavily protested by the workers and the labour unions who feel that their rights have been cut by this new bill for the sake of business interests and so on. The public understands that certain elements of the bill are needed, such as streamlining the license process for SMEs, but don’t accept that worker salaries should be cut to reduce the cost of manufacturing, especially among the labour unions. The issue of minimum wage should be dealt better by the government otherwise this kind of bill will not be able to pass through. The government must involve more stakeholders because there are accusations that this bill was drafted mainly by the business community. Those kinds of issues must be dealt with by the government. As of today, the government plans on pushing this bill forward.”

Ridwan Kamil’s Success

West Java is the country’s largest province with over 50 million people and the local government there appears to have slowed the spread of Covid-19. West Java Governor Ridwan Kamil said that this government will continue to ramp up testing and improve contact tracing efforts. His government has been the most effective in the country when it comes to handling the pandemic.

I asked Djayadi what impact this might have on Ridwan’s future political aspirations such as perhaps a run for presidency in 2024. “Ridwan Kamil, as a governor and national figure in Indonesia, has received a positive impact because of the way he had handled the Covid-19 crisis. The positive feedback for West Java are much better than East Java, which is still considered a disaster right now.” Ridwan’s popularity has slightly increased since the pandemic began according to Djayadi. “The political impact for Ridwan Kamil as an aspiring 2024 presidential candidate has been positive. For instance, some credible polls that came out at the end of May and early June have shown that his numbers have been up a bit. One of the polls show that Ridwan Kamil has been increasing in popularity from 3%-4% before the pandemic, to now 7%-10%, which is double the increase.” Djayadi added that Central Java Governor, Ganjar Pranowo, has also received a slight a positive boost as Covid-19 numbers in his region aren’t as bad as East Java or Jakarta. “The question is, will these numbers for Ridwan last until 2024? We have a long way to go with the pandemic and the election is several years away,” he added.

Widodo’s Popularity Since Pandemic

The pandemic began just five months into Widodo’s second term. I asked Djayadi how the pandemic has affected the president’s popularity. “Interestingly, if you follow the few polls that are out, we see that the approval rating for the president has been going down a little bit, but not to the extent that we can say that it is declining sharply. He still has around a 60-65% approval rating. Widodo’s approval rating had always been around 70% before the pandemic.” Djayadi went on and added, “The fact that Widodo’s approval rating has been going down by 5% means that the pandemic has impacted his popularity.”

Some polls conducted in May found that more than 80% of the public say that the economy is bad. “More than 80% say that their household finances and the national economy are bad. Many people say that their income has been decreasing so much to the extent that they only have money to live around one week. Some say that they only have enough money to live for one to two days,” he said.

Interestingly, Djayadi said that Widodo’s cabinet has lower approval rating than the president himself. “The number of people who are satisfied with the way the central government is handling the situation is only around 50% and that number is lower if you ask people about their satisfaction for the Widodo cabinet, particularly some ministries that handle this crisis, such as the ministry of finance, ministry of health, ministry of social welfare and so on. They do not have good approval ratings.” He said that although public opinion of the cabinet is low, it’s not reflected in the president’s own approval rating. “Why is the president’s approval rating still above 60%? The public knows that the situation that we are in now isn’t all the government’s fault but because of the pandemic. The public seems rational when looking at this issue and the consequences of the pandemic, but if the government is not dealing with the health and economic issues well, then there is a reason for the public to blame the ministers.”

Rare Public Display of Anger by Widodo

In late June, the presidential secretariat published a rare video of cabinet meeting from earlier in the month where the president expressed anger and disappointment towards ministers for not having a sense of crisis when it comes to battling the pandemic, particularly with regards to Presidential Decree No.1/2020 issued in March, which laid out new programs and policies in wake of Covid-19. Widodo stated that he will replace ministers if need be. Some critics say that he should have replaced several ministers months ago for their poor performance.

According to Djayadi, there are several reasons as to why this video was released. “First, the president is attempting to distancing himself from the performance of his own cabinet. People are disappointed with the current economic and health situation and there is no signs that the pandemic is in decline when it comes to the number of cases and deaths. People have lost their jobs. They have to wonder how they are going to put food on the table. People are expecting that the government will act decisively with good policies that would give the public hope. The release of this video by the president’s team is a way of communicating to the public, saying that, ‘Look, we are working very hard’ or at least trying to say that the president has been trying very hard. The public knows that the president has released policies such as, the presidential decree in regards to funding and measures taken during the crisis, but that umbrella policy was made at the end of March. Now it’s June and it’s almost four months later. The people do not see good signs yet. The question now is, what happened? By sending out this video, intentionally, the palace is trying to say that, ‘We are trying very hard’. At least in this way, the public will not directly blame the president. Basically keeping a buffer or distance between the president and his team and put them burden on the cabinet.” Djayadi believes such a move is risky since the cabinet is led by the president and there’s always a chance that it could backfire, so far it hasn’t.

The second reason behind this video is that, “The president is trying to scold his own ministers and ‘going public’, allowing the public to put pressure on them hoping to get them in line.”

The third reason for the video, according to Djayadi, is that the president is considering conducting a cabinet reshuffle but that he has to be very careful when doing so. “This cabinet is not entirely chosen by the president. He needs to see how the public and particularly the political parties will react to this because there is a kind of conventional wisdom that when you are in a crisis, it is not good policy to change the team. Changing the team now will not be easy, especially when a large portion of cabinet is chosen by political parties. So he needs to test the waters first and the video does just that.”

As to how successful the president’s move will be, Djayadi says that it’s too early to tell whether the public and parties got the message.

This raises the question, should we expect an actual reshuffle by the president?

Djayadi believes that the president should do a reshuffle, especially for problematic ministers such as the minister of health. However, it remains unclear if that will happen as the palace has recently backtracked somewhat with such threats. Djayadi says there could be a reshuffle before independence day on 17 August. Also, keep in mind, Widodo’s first year anniversary of his second term will be this October. This is also a significant date for political changes to be made and there have been reshuffles in the past with similar timing.

Democrats Want In

In recent weeks, we have seen newly appointed Democrat Chairman and son of President SBY, Agus Yudhoyono, making the rounds to political party headquarters and even to the palace. His most recent visit was with PKB Chairman Muhaimin Iskandar. The Democrats remain outside of the government coalition and have lost seats in House in the 2019 election. When asked if the Democrats are looking to join the government coalition and get a seat for Agus in the cabinet or merely coalition building for the 2020 local elections this December, Djayadi replied, “Both. Almost every party needs to have coalitions with other parties for this year’s local elections. Only a few parties can nominate their own candidate without a coalition.”

He also said that Agus is in need of getting back into the public eye. “Speculation of a reshuffle is still there. It will be much better for parties such as the Democrats to be part of the power, especially since they have a new chairman, Agus, who needs some kind of political asset to be used for his own credibility for 2024. Otherwise, people will only see him as a chair of a political party without any experience and so on. Then, he will have a low bargaining power in 2024.”

Sri Mulyani

Minister of Finance, Sri Mulyani, is one of the president’s most important cabinet members and brought legitimacy to the Widodo’s first term. She has recently been a target of critics when it comes to the distribution of stimulus packages and an increasing government debt during the pandemic. Although there is no evidence that there is any friction between the president and the minister, I wondered if should might become a scapegoat for with the president or others at some point in the future and if that might that prevent her from completing her post in 2024.

“The major complaints haven’t been towards the minister of finance. The complaint has been towards the more technical ministers that have been directly related to the Covid-19 pandemic. Sri Mulyani served a full term in Jokowi’s first term. She is part of the team that he trusts very much. I also think that she is interested in staying until 2024,” Djayadi explained.

Shawn Corrigan is the host and producer of Indonesia In-depth, Indonesia’s leading business, political and culture podcast based in Jakarta. He has spent more than a decade in Indonesia working as a political risk consultant and established Indonesia In-depth in 2017. He speaks English and Indonesian. In addition to the podcast, Indonesia In-depth provides professionals with content services, from podcasts, audio documentaries to social media content.