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Than Megawati in Leading PDI-P opinion MARCH 29, 2015 5 China’s fi nancial PARADOXES WHEN JOKOWI IS MUCH MORE TRUSTED John West result in a wave of loan defaults in THE GLOBALIST/WASHINGTON DC China, damaging the regular bank- ing system and potentially creating hina’s international fi nancial a wave for investors and companies than Megawati in leading PDI-P showmanship at the Asian In- that have put money into shadow Cfrastructure Investment Bank banking vehicles,” the McKinsey should not distract attention from report argues. Megawati has lost credibility as party boss 2014 presidential race, even though Susilo its deep fi nancial fragilities at home. “Don’t worry, China won’t crash,” VIEW POINT and that Jokowi is perceived as one of its Bambang Yudhoyono had already defeated The UK recently defi ed its “spe- was the message from Premier Li most promising leaders. her twice in the 2004 and 2009 presidential cial relationship” with the United Keqiang at the end of the recent Na- There are a couple key reasons for the elections. States by applying to join the China- tional People’s Congress. But even public’s growing impatience with Megawati The PDI-P now needs Jokowi more than led Asian Infrastructure Investment Premier Li acknowledged that the and her family. For starters, many PDI-P sup- the President needs Megawati. The former Bank (AIIB). Chinese economy faces a long pe- porters, even Megawati’s die-hard followers, Jakarta governor and Surakarta mayor has, Other leading European coun- riod of adjustment. felt angered and disappointed by her emo- thus far, been much luckier than his prede- tries France, Germany, Italy and At this stage, the Chinese govern- tional defense of National Police chief can- cessor. During Yudhoyono’s 10-year term, he Switzerland quickly followed suit. ment has the fi nancial wherewithal didate Comr. Gen. Budi Gunawan. She was was often betrayed and cheated by his own And there is now talk that Australia, to deal with its debt challenges and reportedly outraged with Corruption Eradi- coalition members in the Golkar Party and Korea and even Japan might be the stave off a full-blown fi nancial crisis. cation Commission (KPK) leaders when the Prosperous Justice Party (PKS). They next AIIB suitors. Premier Li also indicated a willing- they named her former adjutant as a graft gained lucrative Cabinet positions but often China’s leadership in the creation ness to continue propping up the suspect in January. The media reported that attacked Yudhoyono’s government through of the AIIB and also the New Devel- economy if necessary. she tried to force President Jokowi to install the legislature. opment Bank (formerly the BRICs But as the case of Japan two de- Budi as the new police chief, despite public Having accomplished next to nothing, the Development Bank) is a direct chal- cades earlier highlights, public fi - protests. Speculations about her motives read opposing Red-and-White Coalition is now lenge to the US-dominated post-war nance can get quickly out of shape if like screenplays for soap operas. collapsing. Two of the major opposition par- international fi nancial system cen- the government does not promptly The Indonesian public is upset that the ties, Golkar, the second largest party after the tered on the IMF and World Bank. address fi nancial problems. Kornelius Purba political elites systematically destroyed the PDI-P, and the United Development Party It is thus seen by many as sym- To prevent a recurrence, the gov- JAKARTA KPK. And in relation to that it is very diffi cult (PPP), are deeply divided, as is the National bolic of the fi nancial power of China ernment must implement structural for Megawati and her party to cover up their Mandate Party (PAN), though on a smaller — and the waning infl uence of the reforms to empower provincial gov- displeasure with Indonesia’s most trusted scale. It is beginning to seem as though the United States. ernments to raise suffi cient tax rev- state institution. The party is ranked number only solid opposition parties remaining are But China’s international fi nan- enues to fi nance their expenditures er inner-circle supporters quickly one when it comes to the number of politi- Gerindra and PKS. The leader of the opposi- cial showmanship should not dis- and to enable the fi nancial system questioned the motive of pollster cians jailed for graft. tion, the loser of the July presidential elec- tract our attention from China’s to allocate fi nance more effi ciently. Lembaga Survei Poltracking Indo- Until last week, the party was still eager to tion, Prabowo Subianto, evidently realizes deep fi nancial fragilities at home. Too much of China’s fi nancial re- nesia after it announced its fi ndings foil Jokowi’s attempt to name National Police that being too harsh with Jokowi will nega- China’s total debt has risen from sources are currently being wasted. Hlast Sunday that public trust in Indonesian deputy chief Comr. Badrodin Haiti the new tively affect his camp. US$7 trillion in 2007 to $28 trillion Some observers have argued that Democratic Party of Struggle (PDI-P) chair- police chief after he withdrew Budi’s nomi- Megawati will remain unchallenged in by mid-2014, according to a recent China could use its immense for- woman Megawati Soekarnoputri had drasti- nation. The childish attitude of the politicians the upcoming PDI-P congress. But Puan will report by the McKinsey Global In- eign exchange reserves (about $4 cally declined. Her daughter, Puan Maharani, is irritating. From time to time they indicate likely face bitter rejection as the next party stitute. It accounts for more than trillion in value) to solve its sudden and son, Prananda Prabowo, seemed even that they will abandon Jokowi, who would be chief, given her inability to perform both one-third of the growth in debt glob- debt problem. But it’s not as simple worse in the eyes of the public. left standing alone without control over any as party executive and as a minister, which ally. Representing 282 percent of as that. Hanta Yuda, the executive of the poll- of the country’s political parties. would leave her accomplishments amount- GDP, China’s debt is now even larger Such an approach would require ing company, said the PDI-P should speed Indonesians also felt frustrated because the ing to nothing more than being Megawati’s than that of the United States (269 selling foreign currency-denominat- up leadership regeneration, since the public PDI-P often acted in opposition to Jokowi’s daughter. percent) or Germany (258 percent). ed investments and converting the wanted to see new leaders. plans, despite the fact that the PDI-P leads If Megawati wants the party to maintain China’s rapid debt buildup is proceeds into renminbi. This would The PDI-P will hold its congress next the ruling Great Indonesia Coalition. PDI-P relevance with the times and its current sup- about double that of the United push up the renminbi exchange rate, month in Bali. Only a miracle could change politicians in the House of Representatives porters, she has little choice but to accommo- States before the global fi nancial harming exports at a time of eco- the fact that Megawati, the country’s fi fth seem eager to disrupt the government’s activ- date Jokowi in the party. It will not be easy crisis or that of Korea before the nomic weakness. president, will be unanimously reelected for ities. The opposing Red-and-White Coalition for her to criticize the government because Asian fi nancial crisis. If the current China must now navigate a major another fi ve-year term. often shows greater understanding — and her motives would be all too evident. Hope- pace of debt buildup continues, turning point in its development tra- Citing the survey’s results, Hanta said Pres- perhaps even greater support — for govern- fully she will be smart enough to offer Jokowi China’s debt would reach 400 per- jectory. A period of slower growth is ident Joko “Jokowi” Widodo was more desir- mental policies than the PDI-P. a position on the party’s new executive board. cent of GDP by 2018. being heralded as the new normal. able than Megawati as future PDI-P party Megawati apparently cannot accept that It will boost the party’s credibility while still This debt surge is the result of But what is most important is un- leader, a party based on the ideology of her she does not control Jokowi and such stub- allowing her to rein queen of the PDI-P. the government’s stimulus program locking productivity as a fresh driver father, fi rst president bornness has become a great burden on his Megawati can no longer act as the party’s in response to the 2008 “Lehman of growth and industrial upgrading Sukarno. administration. Her own daughter, Puan, has virtual dictator. She may be credited for the shock”. This stimulus took the form now that the demographic dividend The survey merely made no visible contribution, despite being party’s massive amount of support but she has of an explosion in directed bank of cheap labor has come to an end. confi rmed public awarded the post of Coordinating Human done little to transform the party into a mod- lending, mainly to state-owned en- This will require urgent imple- sentiment that Development and Culture Minister. ern democratic institution. For the sake of her terprises and local governments. mentation of the commitment of the It was Megawati herself who nominated own interests, and the interests of her family, More recently, this was followed by a 2013 Third Plenum to allow market Jokowi as the party’s presidential candidate Megawati should share her power in the PDI- boom in shadow banking fi nance.
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