Special commentary: Governance reform in Indonesia in 2025

Feature image Sutan Sjahrir (standing in the middle) was the first Indonesian prime minister who served from 1945 to 1947. The photo is from the opening of the First Plenary Session of the KNIP (provisional DPR) 16 Oct 1945 and is from the collection of the Sutan Sjahrir Family.

 

In late 2024 President Prabowo stated that the country should return to a parliamentary form of governance in order to elect governors, mayors and bupatis (equivalent to the mayor of a shire). Wind back ten years and then presidential candidate Prabowo indicated that a direct election model for the president was unknown in Indonesian history.

 

These statements clearly reflect his deeply held views but generated controversy caused in part by long indoctrinated antipathy in Indonesia to parliamentary systems. Electoral system changes, particularly for choosing presidents and governors, offer historic opportunities to deal with several fundamental integrity flaws in these systems. At the national level separating the position of head of state (president) from head of government (a prime minister accountable to parliament) offers an easier pathway for the nation to achieve its constitutional objective of becoming a just and prosperous nation. Unfortunately, the slide in perceptions of corruption over the past five years will only complicate this pathway.

Introduction

In the wake of the massive round of elections for provincial and local heads of local government in late November 2024, President Prabowo proposed replacing the direct election of these leaders with a return to election by provincial and local councils. Not surprisingly, this proposal has generated much discussion. This is especially so considering the extent to which the public supports the direct election system, including the direct election of the president. Footnote: Indonesians have retained a consistent and strong level of support for the direct election of their local government leaders for many years, see here and here.

This paper explores several of the issues relating to the issue of an optimal system of government for Indonesia. The key objective is to offer some historic and contextual perspectives that may help better inform the emerging debate on the most optimal system to be applied in Indonesia. I will also offer some personal reflections on which constitutional system offers an easier path for Indonesia to emerge as a just and prosperous nation.

President Prabowo and Indonesia’s parliamentary traditions

In my view this proposal by the President goes beyond a mere “fly a balloon” exercise to test public sentiment. Rather it reflects some of his long held views on an optimal system of government. For example, in the final stages of his presidential campaign in 2014 he observed that “there are so many things that we are applying in order to copy foreign ways, due to our naivety. Actually these are not appropriate with our own culture, but it has already gone too far. One example is the direct election (system). But this has already been felt. How do we turn back the hands of time?”

At the time his critics saw these comments as evidence that he wished to return to some form of authoritarian system. One example of the criticism at the time observed “on 28 June at the Taman Ismail Marzuki cultural centre in Jakarta, Prabowo said that he viewed Indonesia’s political system as being unduly influenced by Western values. For him, direct elections (presumably both at the national and local level) were not in line with Indonesian culture, but had been adopted and perpetuated like a bad habit (he mentioned smoking as an example)”.

Politicians sometimes let slip their genuine feelings and views at unexpected moments. In an interesting interview with the UK’s Financial Times in mid-2013, Prabowo was asked which leaders he most admired. The article noted “His choice of Asian role models is revealing, among them is India’s Jawaharlal Nehru, who ‘came from a wealthy family but always defended the poor’, as well as Southeast Asian strongmen such as Singapore’s Lee Kuan Yew, Malaysia’s Mahathir Mohamad and Thailand’s Thaksin Shinawatra”.

In addition to all being leaders of nations close to Indonesia, each of these leaders was a prime minister or head of government. None of them were presidents, monarchs or some other form of head of state.

In my view these comments also reveal a strong understanding by President Prabowo that Indonesia’s political culture is founded in some or other form of parliamentary system.

In terms of the history of the nation he is correct. From 1945 until 2002 Indonesia’s varied constitutions all applied some form of parliamentary system. From 1945 to 1949 the original 1945 Constitution was applied with a clear separation of president and prime minister with the latter accountable to the nascent parliament of the day. Under the very brief federal system in 1949-1950, a similar parliamentary system was applied as it was again under the Provisional Constitution applied from 1950 to 1959.

The muddled view that the 1945 Constitution provided for a presidential system

When the country returned to the original 1945 Constitution in July 1959, the positions of president and prime minister were merged. Arguably much of the historic confusion that Indonesia operated a presidential system of government emerged as a result of these experiences. Like the USA or the Philippines and most of Latin America the president (head of state) is also concurrently the prime minister (head of government).

From an Indonesian perspective the fact the first two presidents, who were concurrent prime ministers and were such dominant figures on the national stage, not surprisingly, strengthened the public view that this must be a presidential system. The profound difference between the very unorthodox way Indonesia’s so-called presidential system of from 1959-2002 operated versus how it operates in these other countries is that in Indonesia the president was appointed by, accountable to, and able to be dismissed unilaterally by the Peoples’ Deliberative Assembly (MPR), a super-parliament. In any typical presidential system the president is elected by the voters and even the parliament cannot easily dismiss the president. Efforts to remove a president under a presidential system cannot be undertaken unilaterally by the legislative branch: the judicial branch of government is also engaged.

To reinforce that the 1945 Constitution, as applied between 1959 and 2002, was indeed a parliamentary system, let us recall that the first president (Sukarno) was both appointed and later dismissed by the MPR. The second (Soeharto) was appointed provisionally and then appointed and re-appointed seven further times. While he did ultimately resign it is notable that he was asked by the then speaker of the MPR to resign three days before he did. The third (Habibie) was confirmed and the next year rejected by the MPR. The fourth (Wahid) was appointed and later dismissed by the MPR. The fifth (Megawati) was confirmed by the MPR. By the conclusion of her term, the new presidential system was in place. She was replaced by the first directly elected president, Susilo Bambang Yudhoyono (‘SBY’).

Adding further to the muddled thinking in Indonesia over its system of government during the 1959-2002 era was the position of the Peoples’ Deliberative Assembly, MPR. A commonly expressed view was that it was a type of electoral college as seen in the USA. This view on the MPR is profoundly incorrect. The MPR could both appoint and dismiss the president and do so unilaterally, it had unilateral authority to amend the constitution and it could even pass legislative orders. The electoral college of the USA essentially transforms the weighted results of the presidential elections from the states into the official result. It does not select the president per se. It certainly does not dismiss the president nor amend the constitution nor undertake any legislative-type action.

In terms of public discourse there has been an additional element to the muddle concerning Indonesia’s historical constitutional arrangements. A number of senior Indonesians, led notably by long retired military figures, call for a return to the original 1945 Constitution arguing that the amendments since 1999 have created a ‘liberal’ democratic system and that this is ‘un-Indonesian’. Recall that in Indonesia’s political lexicon the worst insult after being called ‘communist’ is to be called ‘liberal’.

The problem for these romantic nostalgics, who seek to take the country back to the future, is that they never address the core challenge, namely which version of the original 1945 Constitution do they want? Is it the version of the original 1945 Constitution that applied from 1945 to 1949 in which the country was led by a president and governed by a prime minister (and his cabinet) accountable to the nascent parliament? Or do they mean the original 1945 Constitution as applied between 1959 and the start of the Reformasi period in which the president was both head of state and the head of government? These were very different systems, the implications of which in terms of securing the country’s core vision, are outlined further below in this paper. Considering these figures lived their professional lives under the 1945 Constitution as applied between 1959 and 2002, their default understanding of what this constitution is likely to be that system applied during those years. This is most unfortunate not only in creating an ambiguous and poorly informed public discourse but also considering that this 1959-2002 system contained profound structural flaws.

 

The 1959-2002 system – a structurally unstable system

An additional point is that unlike parliaments in most parliamentary systems, the MPR and the Legislature, DPR, which is contained within the MPR, could not be dismissed by the president in order to enable early elections. The political system from 1959 to 2002 was thus structurally unstable. The super-parliament was immune from any attempt at dismissal by the president, but enjoyed unilateral power to dismiss the president. This structural imbalance meant the president was very vulnerable to being removed at the whim of the super-parliamentary MPR.

In practice the only way for this system to deliver constitutional stability was for the president of the day to dominate the parliament. This demanded a separation of accountability between the elected MPs and the voting public and its replacement by having the president essentially “electing” the MPs who in turn would elect or reelect the president. This system required subverting the principle of citizens’ sovereignty (kedaulatan rakyat) and replacing it with leaders’ sovereignty (kedaulatan pemimpin). The system could only function outside the spirit of genuine democracy.

The first president to apply this system, Sukarno, did so by cancelling elections (scheduled for 1960), banning many parties from the political process and significantly filling the parliament with loyalists. The second president, Soeharto, managed this system by “screening” all potential candidates for parliament to remove potentially critical voices, intriguing in each of the remaining parties to ensure they remained pliant and then effectively preventing any new parties from contesting elections.

This system produced a closed loop system, that is the president appointed the MPs who would dutifully elect him and then he would appoint or allow them to run again and they would re-elect him and so on.

To expect such a parliament to replace an incumbent president would be, in my estimation, gross naivety. The only way to smash open this closed loop was through a major breakdown in the socio-economic and political fabric of society. Sadly, this happened twice under this 1959-2002 constitutional arrangement, namely in 1965 and again in 1998. In essence the nation and citizenry had to endure a painful crisis with huge economic losses and personal and communal suffering. It was an absurdly high price for the nation and its people to pay merely to produce a change in national leadership.

Whatever complaints are made these days about the cost of the country’s democratic elections since 1999 pale into insignificance when set against the costs paid by the nation, its economy and the citizenry in either 1965 or 1998.

By way of example I recall well that the loss of market capitalisation from one listed Indonesian company, Ramayana Lestari (retail sector), was larger than the entire government budget allocated to the General Elections Commission to conduct the 1999 elections. That was just one mid-level company. At the time, when I worked in the Jakarta capital market, I calculated that Indonesians lost more than 90 percent of their asset valuations during the Asian Financial Crisis that finally led to the change of government in 1998. By contrast Australians lost 30 percent. These losses do not take into account the loss of life and damage to the social fabric of society that were unleashed during the chaos of 1998. Imagine how much pain could have been avoided if the political system was not a closed loop, but rather was able to respond to the needs and demands of the citizenry.

Just and prosperous nation: the system of government matters

Allow me to begin this section with a big mea culpa. At the time of the constitutional reforms – 1999 to 2002, I supported the general consensus that the voters should elect the president. Like many people I also thought the constitution provided for a presidential system of government – at least until the process began of dismissing President Wahid.

As MPs were about to begin their first major session to interrogate him, President Wahid actually asked “is this a legal court or a political court?” This very simple question, delivered with President Wahid’s characteristic unvarnished directness, was like a slap across the face to wake one to the realisation that this was clearly politics dressed up as law. This was the essence of a parliamentary system in action, holding the head of government to account, rather than a presidential system. It was here that I realised Indonesia had never applied a presidential system. It was a collective national myth.

After 2002 and with the new presidential system now in place, I began to have misgivings. When I shared these concerns with Indonesian friends, most simply replied, ‘of course you would say that. You come from a country with a parliamentary system’. This challenged me to contemplate more about the sources of my misgivings.

The results of this contemplation followed a few steps. The first was to examine Indonesia’s vision statement as contained in the constitution. Among other things the Preamble to the Constitution states that Indonesia is to be a just and prosperous nation (negara adil dan makmur). I have yet to meet an Indonesian who does not see this as a key national objective, so this was a good place to focus attention, identifying the prospective efficacy of this new presidential system.

The next step was to consider whether there may be some relationship between the system of constitutional government applied and the potential for that nation to be just and prosperous.

This required a definition of just and prosperous. While there may be many metrics that could be applied I chose as a basis for a just nation to use the Freedom in the World index that Freedom House has been measuring since the 1970s. A just nation is one whose citizens enjoy full freedom. To measure the issue of prosperous, I used the UNDP’s Human Development Index. Countries whose citizens enjoy very high levels of human development are deemed prosperous. To be classified as just and prosperous the citizens of a nation must enjoy both full freedom and very high human development, having one or the other is not good enough.

The next step was to examine comparative situations. To do so I selected 40 major countries in which the presidential system (where the president is concurrently the prime minister and is elected by the voters not the parliament) is applied. The second group of 40 countries consists of countries where the head of state may be either an elected or appointed president or some form of monarch but in each case the prime minister is accountable to the parliament. The table below identifies which countries are just and prosperous and clustered by the system of government applied.

These results are quite stunning and whenever I share with Indonesian friends there is an audible gasp. Five of the six members of the just and prosperous club among the presidential systems have been independent for over 200 years. Cyprus is the baby of this group and will celebrate 65 years of independence this year. All members of this group, again excluding Cyprus, are settler nations from the Americas.

The 29 just and prosperous countries, which incorporate a dedicated position of a prime minister accountable to parliament, have very varied historic and political backgrounds. They include long established democracies in western Europe, former communist countries in eastern Europe that have only enjoyed independence for 35 years, several Asian nations as well as several settler countries from the Americas and Australasia. Furthermore, this list of 29 countries is not complete. There are several small island states not included in this list of 40 that have also achieved the status of being just and prosperous.

On the issue as to the nature and formation of the head of state (some form of president or monarch), the following tables show that there is no clear relationship between the head of state and achieving the status of being a just and prosperous nation. As a result, it would be fair to conclude that the head of state position in a constitution has little or no relationship as to whether a nation is just or prosperous.

The next question is whether these results regarding the separate position of a prime minister who is accountable to parliament reflect a coincidence or a cause and effect. The answer demands a separate paper, but here’s a spoiler alert. My separate analysis, which applied an integrity lens to understand the operational dynamics of each constitutional system, revealed fundamental integrity flaws in the presidential system that I believe contributes to the difficulties for countries using that system to grow to become just and prosperous.

So, there is in my view a cause and effect between having a dedicated prime minister accountable to parliament and the prospects for that country becoming just and prosperous. An additional factor to consider, certainly in the light of the current debate in Indonesia on governance reform at the sub-national level, is whether the application of a presidential or parliamentary system at the sub-national system is better in terms of encouraging the achievement of a just and prosperous society in these sub-national communities. More research work is required on this issue.

Additional developments on governance in Indonesia

On 2 January 2025 the Constitutional Court issued a truly historic verdict. This verdict declared that Article 222 of the law on general elections (Law 7 of 2017) was unconstitutional. This article established that eligibility to run as president required a candidate to demonstrate 20 percent of support from a party or coalition of parties from the floor of the parliament or 25 percent of voter support in the past election from a party or coalition of parties. In setting such an extremely high threshold for eligibility, this law essentially restricted the number of potential candidates able to run for president by encouraging a “cartelisation” of parties in support of a certain candidate and also preventing the formation of alternative coalitions.

In addition, this process has tended to lead to an inordinate amount of political time and energy expended on creating these “coalitions” among the party leaders and with much less energy and time spent on forging a coherent program of action. It also creates incoherent coalitions in terms of ideology and policy direction. From an Australian context imagine a coalition forged between say the One Nation Party and the Greens!!

What made this verdict all the more historic is that this article had been challenged some 33 times before. In each case the Constitutional Court rejected the petitioners’ pleas. With this verdict all parties eligible to submit candidates for parliament (DPR) will have the right to put forward a candidate for president. Considering Indonesia will continue to apply the two-round system of electing the president, there is no danger of a candidate winning the presidency with say 30 percent of the vote. Whoever wins will still have to secure more than 50 percent of the votes. This will continue to ensure the election, not necessarily of the most popular candidate, but more importantly the most acceptable candidate. It is all but inconceivable that the court would have passed this verdict under the previous presidency and indeed it did reject several such petitions to scrap this article.

This Constitutional Court verdict is the most significant step forward in advancing Indonesian democracy in the 15 years since an earlier court declared in late 2008 that the effectively closed candidate list for parliamentary elections to be unconstitutional. In doing so it created the fully open candidate list system in which voters determine not just which party they choose but also which candidate from their party they prefer.

This recent development in terms of advancing Indonesian democracy is truly welcome especially at this point in history when across this world democratic backsliding is a more common experience.

On the downside, Transparency International will release its annual corruption perceptions index study for 2024 by mid-February 2025. A generation of steady improvements saw Indonesia rise from being at the bottom of the world in the late 1990s to crossing the threshold of joining the top half of nations in 2019. This was a truly historic national achievement of which all components of society should be rightly proud.

Since 2019, sadly, Indonesia suffered several regressions falling back to where it was in 2014 – a serious fall from grace. In 2019 the country was the third best in ASEAN and closing in on second placed Malaysia. Since then Indonesia has fallen behind Thailand, Vietnam and East Timor. Meanwhile a steadily recovering Philippines has now caught up to Indonesia. Considering the clear disregard for issues like conflict of interest as witnessed in Constitutional Court deliberations at the end of 2023, the country needs to prepare for another slide in its global standings.

The new government and the newly appointed commissioners of the Corruption Eradication Commission, KPK, will need to step up with a series of substantive initiatives and follow-up implementation in order to reverse this deeply troubling negative trend. Efforts to boost rates of investment and economic growth will be undermined by the risks associated with having to operate in a corrupted environment.

The ideological baggage of Indonesia’s parliamentary system

There is a popular rejection of a parliamentary system in Indonesia despite, as noted above, the country had never applied a presidential system until 2002. There are two main arguments proposed to reject the parliamentary system of government. The first is the argument that the system was deemed a failure and was inappropriate for a country like Indonesia. The evidence put forward is invariably from the 1950s. The most common perspective being that the era was fraught with great instability as governments rose and fell almost by the day.

Is this a fair judgment? During the nine years in which the Provisional Constitution of 1950 was applied, Indonesia had seven prime ministers. By comparison Australia had eight prime ministers during its first decade of Federation. At this same time Indonesia had one president while Australia had two monarchs and four governors general. In addition the issue of the regional rebellions that broke out in the late 1950s was less due to the parliamentary system and more due to the absence of regional representation recalling that 65 percent of MPs were elected from Java leaving those off-Java little political heft to balance these interests. The proposed regions house, as provided for under the aborted draft constitution developed by the Constituent Assembly in the late 1950s, would have addressed this problem as it continues to do in other geographically heterogeneous nations like Australia.

Among the explanations for continued negativity towards parliamentary systems in Indonesia is that this has been the view taught to successive generations and with minimal counter views. Adding further ideological heft to reject the parliamentary system is that it is usually referred to as the liberal democratic era; as noted above a serious insult if ever there was one in Indonesia.

The second group of people to reject the parliamentary system do so not by claiming it was too democratic to be applied in a society like Indonesia, but rather because it was deemed undemocratic. Many of my civil society friends, a majority of whom were American educated, at the time of Reformasi used to make this claim as they demanded the president had to be directly elected, and that only directly electing the president would be democratic. Obviously any basic scan of the world’s functioning democracies would indicate that this view was clearly incorrect as the majority of these democratic countries clearly apply some form of parliamentary system.

Considering the collective lived experiences of Indonesians from the late 1950s to the late 1990s it may be understandable why they believed it necessary for the president to submit to the people for election.

This also includes at the sub-national level. Older people will recall during the Soeharto era that provincial and local councils were engaged in the selection of their governors, mayors and bupatis. But the central government was also involved in this process and for all practical purposes always got its preferred candidate endorsed with the local council rubber stamping this candidate. So like other election processes during the New Order these elections by the sub-national councils did not pass the test of being free and fair. The historic decision of the Riau provincial council in 1985 to not elect the central government’s preferred candidate was a standout incident during those years.

These historic experiences are also likely to add to the view that parliamentary systems are somehow not democratic.

For President Prabowo to begin to push back against this huge historic tide of animosity towards the parliamentary system, including at the sub-national levels, will require serious public and voter education and a lot of unwinding of the ideological baggage directed against this constitutional model.

For what it is worth

The idea of returning Indonesia to some form of parliamentary system, at least initially at the sub-national level, is worthy of consideration. At the provincial level these proposed changes offer an historic opportunity to deal with one challenge to political integrity. This relates to the position of governor in a province. For decades governors have had to operate with two chains of command. They are firstly representatives of the central government at the provincial level as the head of a provincial territory. At the same time, they are also representatives of the people, having been elected by them as head of the provincial government. Serving effectively two different chains of command is, of course, mission impossible.

Given the central government can no longer dismiss elected officials, while the voters can throw out an elected leader at their re-election and the local councils can also make political life difficult for a governor, the perfectly rational response by governors is to focus on their accountability to those in their provinces. Not surprisingly, the central government has sought to claw back the direct election of governors to be an appointed position.

The proposal to amend the way governors are elected may offer an opportunity to resolve this anomaly. This would require separating the task of governor as head of the provincial territory by having the national government appoint someone to do this task. They may still be termed governor. Under the new parliamentary system the provincial council would then appoint a person to head the provincial administration and that person would be accountable to the council. A new term for this position would need to be established – akin to what in Malaysia is known as Menteri Besar (chief minister). The speaker of the provincial councils would remain unchanged.

A separation of powers between the governor as head of the provincial territory and the new head of the provincial government accountable to their provincial council, DPRD, would also permit other valuable reforms. These include making the newly constituted governor responsible for overseeing the provincial civil service, thus better insulating local officials from threats of partisan intervention by local political interests.

Any reconstitution of a parliamentary system in Indonesia, including at the sub-national levels, would not be in the form of a Westminster system as understood in Australia. The DNA of Indonesia’s parliamentary traditions are derived from continental Europe, not the UK. This means that ministers, even if they were elected to parliament, must leave the parliament to serve in the cabinet. It also means that many ministers are not actually elected officials, but can come from any professional background. The same situation would be the case for any governors, mayors or bupatis who had been elected to their councils. They would have to resign from the council in order to serve in the new position.

A final point on electing the president and a parliamentary system. At the time of Indonesian independence there were only two broad systems of government around the world. The first was the executive presidential system in which the president was popularly elected and played the concurrent role of head of state and head of government. The other was a parliamentary system in which the head of state (either an appointed president or inherited monarch) was different to the head of government (prime minister) who was accountable to the parliament.

 

 

The idea that the head of state could be elected and that a separate position of prime minister, accountable to the parliament, had yet to exist. This new semi-presidential (sometimes also called the premier-presidential) system was created with France’s 1958 constitution. I recall several great discussions about constitutional issues with the late Dr Adnan Buyung Nasution. Among the points he made was that the original 1945 Constitution, as applied between 1945 and 1949, was an embryonic form of semi-presidentialism. For example had the president been publicly elected there would have been little doubt that the winner would have been President Sukarno. It would be quite correct to observe that Indonesians want and expect their president to be more than a symbol.

Indeed President Sukarno was often quoted as referring to himself as the connecting tongue of the people (penyambung lidah rakyat). I believe this reflects the public view that the president should be more than a symbolic leader. But how to be a president as a connecting tongue of the people without being elected by the people? Here Bahasa Indonesia offers the most beautiful answer. The word for vote in Indonesian is the same as the word for voice, namely suara. How better for someone to become the connecting tongue of the people than to be given a voice by those people.

However, in order for Indonesia to enjoy the easiest pathway towards becoming just and prosperous the parliament must be made responsible for forming and replacing the government of the day, as led by a prime minister.

To quickly summarise: split the position of head of state (president) from head of government (prime minister). Continue to publicly elect the president applying the system outlined in the recent verdict of the constitution court.

At the provincial level, separate the position of head of province (governor) from the position of head of provincial administration (for one of a better term, premier). The governor to be appointed by the central government while the head of provincial government to be elected by and accountable to the provincial council.

At the city/kabupaten level, the local head of local government could be elected by and accountable to the local council.