Indonesia, the world’s third-largest democracy—and fourth-largest country overall—held a presidential election on Feb. 14. Defense Minister Prabowo Subianto, who served as the commander of Indonesia’s special forces when the country was previously under a dictatorship, declared victory after receiving a reported 60 percent of the vote in a three-way contest. Official results aren’t expected for a few weeks, but Prabowo is expected to take office in October, replacing the term-limited Joko Widodo, known as Jokowi, who has served as president since 2014.

How does Indonesia’s geography as an archipelago affect its economy? What is Jokowi’s economic legacy? What is Indonesia’s role in the global Islamic economy?

Those are a few of the questions that came up in my recent conversation with FP economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity. For the full conversation, look for Ones and Tooze wherever you get your podcasts. 

Cameron Abadi: What kind of structural economic conditions do archipelago nations face? Indonesia is obviously a collection of islands scattered across a vast swath of the Pacific. Are there any common economic characteristics that island archipelago nations like Indonesia face?

Adam Tooze: I think it’s important to start just by acknowledging how radically sui generis Indonesia is. I mean, it’s astonishing. To categorize it along with any other country seems to me always a bit of a mistake. 270 million people—that’s the fourth-largest country in the world, the third-largest democracy, spread over 17,000-plus islands. The precise number of islands in Indonesia depends on how you count coral reefs and small sandbars, but everyone agrees it’s somewhere in that scale. So Indonesia is just wildly more complex, I think, than virtually any other country, society, nation-state in the world. It’s sort of staggering.

Culturally speaking, this creates enormous diversity because islands have had this weird history in terms of transport. Because before the advent of modern road and rail transport, the best way of getting around was by water—certainly when moving heavy goods. And so Indonesia bursts into history as a massively important intersection of many trade routes between the major continents. It’s hugely interconnected. It is the “Spice Islands.” This is what European exploration was directed toward finding. When we talk about the Indies in the early modern or the medieval periods, we’re talking about Indonesia, not so much what we think of as modern India. But that structure also means that it’s just massively diverse in cultural terms. So 700 living languages are spoken in this country of 270 million people across 17,000 islands. Ten percent of all living languages in the world are spoken in Indonesia. And it’s not by accident. It’s because of the fragmentation created by the separation of these islands. The standard language, which most people speak for business purposes, is Malay—well, Indonesian, which is a standardized version of Malay. But plurilingualism is absolutely the norm in complex, complex societies like this. Javanese is the most common Indigenous language that’s spoken, but it’s only spoken by 31 percent of the population.

And now, of course, Indonesia is threatened by climate change and by sea level rise in a way that compact continental or just standard landlocked states aren’t. And right now, by 2100, it expects to lose between 92 and 100 islands.

CA: Joko Widodo, the current president, took office making some big promises about Indonesia’s economic development. And I’m curious what you make of his legacy. How has he executed on those big promises he made about Indonesia’s future?

AT: It’s a really interesting question. If you look at the simple growth record since Jokowi entered office in 2014, it’s 4.2 percent per annum and 5.1 percent per annum if you take the pandemic years out. And that’s a substantial growth record by any standard other than the Chinese standard. It’s a rapid rate of growth over such a long period of time. He made huge promises, above all, on infrastructure. But I think it’s important to get a clear understanding of the historical backdrop to this and, crucially, to understand the existential political economic shock delivered to Indonesia by the 1997 Asian financial crisis and the subsequent upheavals, also political. Indonesia’s sense of itself as a modern, forward-moving economy was put in question by a shock that took GDP down by 13 percent. And Jokowi’s promise to achieve a high growth rate was set against that backdrop. In fact, the growth rate he aimed for was 7 percent, which was what Indonesia was growing at just before the Asian financial crisis. And he has fallen short of that target.

The other big promise was infrastructure investment. And again, this relates to this trajectory—this traumatized trajectory. So before the Asian financial crisis, infrastructure investment in Indonesia was running at about 9 percent of GDP and plunged to as little as 2 percent of GDP by 2001. Restoring public investment—and he has effectively tripled its share of public spending in Indonesia over his time in office—is, in a sense, redressing the damage done by that massive deviation to Indonesia’s growth path. Concretely, what this has above all meant is very large-scale spending on roads because, as we were saying, for this mountainous complex island society, or this fantastically complex nation, internal infrastructure and transport is an absolutely crucial issue. He has also proposed building a new capital city to replace Jakarta, which has just become impossible to live in and is sinking into the ocean. The road construction numbers are impressive. We’re talking about 2,000 kilometers of toll roads, approximately; thousands of kilometers of regional roads; and tens of thousands of kilometers of roads for the rural communities, which still dominate a large part of Indonesian life. I think that’s where we’re really seeing the payoff, in a modernization of Indonesia in all different directions: the construction of new airports, of dams, of major bridges. It’s a kind of a China-lite version of modernization with a heavy Chinese footprint at the level of engineering and construction going on across Indonesia.

The big issue for many people, and in the run-up to this election, is the extent of corruption that goes hand in hand with this. Indonesia is, by most international rankings, an extremely corrupt place to do business. And Jokowi, though he is barred from running again for office, has effectively secured through his son, Vice President-elect Gibran Rakabuming Raka, the possibility of his dynasty continuing. I think one of the anxieties is that this growth has gone hand in hand with a kind of crony capitalism that, in the long run, may be a token of a subsequent slowdown in Indonesia’s development.