Unemployment, Poverty and Corruption: Young Indonesian Voters’ Top Economic Concerns

Although personal charisma still outweighs policy in Indonesia’s elections, candidates’ policy promises should not be underestimated. Policy platforms will shape the next president’s agenda and can make an electoral difference in a tight race. Defence Minister Prabowo remains a clear frontrunner, securing 45.8 per cent of votes according to a January 2024 poll, while Anies Baswedan and Ganjar Pranowo compete closely at 25.5 and 23.0 per cent respectively. However, a slight percentage point difference could determine two things: whether Prabowo wins a clear majority on February 14 or will go to a run-off election, and who will be the second-placed candidate contesting the run-off in June, presumably against Prabowo.

Indonesia’s Millennial and Generation-Z cohorts (aged under 43) make up more than 50 per cent of eligible voters. By their sheer number, this demographic group will play a critical role in the upcoming elections, influencing the substance and communication strategies of the presidential campaigns.  

Based on the LSI (Lembaga Survei Indonesia) – ISEAS – Yusof Ishak Institute survey conducted nationwide in November 2023, involving more than 2,000 voting-age respondents, Millennials and Gen-Z Indonesians show similarities but also telling differences with their older counterparts on national issues that the next leadership should prioritise. 

For example, while a quarter of older respondents ranked “health” as one of the top three national agendas to prioritise, only 18 per cent of Millennials and Gen-Z did. While 29 per cent of Millennials and Gen-Z ranked “education” as one of the top three national agendas to prioritise, only 21 per cent of the older generation group did (Figure 1).  Stage-of-life factors could explain these inter-generational differences in policy preference.   

Figure 1: Respondents’ top three national issues to prioritise 

The three national priorities that Indonesian Millennials and Gen-Z would like their next president to prioritise — namely, unemployment, poverty and corruption — capture timely and important concerns that election campaigns will do well to address.

First, job creation takes the top spot, with 56.1 per cent of respondents choosing this as one of three most important issues. The lack of jobs is particularly acute for youth (15-24 years old), whose unemployment rate has typically been much higher than the general unemployment rate (19.4 per cent vs 5.3 per cent in 2023). Indonesia’s latest annual unemployment statistics show both the overall and youth unemployment rates hovering higher than pre-Covid-19 levels (Figure 2). Indonesian youth face unemployment rates not only relative to adults but also to youth in the East Asia and Pacific region. Structurally, insufficient job creation, skills mismatch, and inadequate job-search tools impede the school-to-work transition in Indonesia.

Figure 2: Indonesia’s youth unemployment consistently exceeds overall unemployment by a wide margin

More recently, weaker global demand due to subdued global economic growth has caused almost 300,000 workers to be laid off in Indonesia. These layoffs were notably in the labour-intensive and export-oriented textile, textile products, and footwear industries in the first eleven months of 2023, a 22-fold increase compared to the same period the year before (2022). Most were in manufacturing industrial areas, namely West Java (36.1 per cent) and Central Java (20.3 per cent).  Indonesia is also seeing start-up layoffs as a wave of redundancies hit the global tech industry — the so-called “tech winter”.

The capital-intensive downstream economic policy strategy, especially on nickel smelter processes, has failed to create more job opportunities. A more broad-based industrial policy, including in labour-intensive manufacturing sectors, is needed to respond to the job pressure.

Second, eradicating poverty is a strategic issue that is also of concern to the younger voters (38.1 per cent), albeit to a lesser degree compared to the older generation.  The young voters’ concern may relate to the impact of unprecedented shocks such as the pandemic, natural disasters, and rising food inflation — partly because of geopolitical conflicts — on national poverty.

While Indonesia has continually enjoyed five per cent economic growth since 2016 up until 2022, except in the Covid-19 pandemic years of 2020 and 2021, there are still around 26 million poor (9.4 per cent of the national population), according to the latest Statistics Indonesia data of March 2023. This figure masks the much larger size of vulnerable Indonesians, who can quickly become poor during an economic crisis. A recent poverty assessment report by the World Bank shows that in 2019, 40 per cent of Indonesians were “economically insecure”, with most of them being “non-poor” (consumption levels above USD3.2 2011 PPP) but when exposed to an economic shock, they can easily fall into poverty.

Without successive presidents’ commitment to address the issues that matter most to Indonesia’s younger citizens, it will be difficult for the country to achieve its ambitious goal of becoming a high-income economy by 2045.

Third, Indonesian young adults would like to see corruption eradicated. A larger share of the survey’s younger respondents (37.6 per cent) selected this as a priority compared to the older generations. This is in line with various problems faced by the national law enforcement and anti-corruption agency (KPK) in recent years, with critics arguing that its powers and neutrality have been hollowed out. The younger respondents’ concern about worsening corruption aligns with the decline in Indonesia’s ranking on Transparency International’s Corruption Perceptions Index. Indonesia fell from 85^th position in 2019 to 110^th out of 180 countries in 2022. One significant reason for this is the passage by President Joko “Jokowi” Widodo’s government of a new Corruption Eradication Commission (KPK) Law in 2019, which has been widely blamed for systematically weakening the anti-graft body.

The KPK was among the country’s most trusted institutions before the 2019 revision and a notable trademark of the post-Suharto Reformasi (reform) era. Since 2019, the KPK has been entangled in various controversies and allegations involving the agency, including bribe-taking, extortion, and even sexual harassment. The latest controversy was an extortion probe that led to the removal of its chief, Firli Bahuri. The deterioration of the KPK may have triggered concern in the young generation about poor institutional reforms in the country.

Without successive presidents’ commitment to address the issues that matter most to Indonesia’s younger citizens, it will be difficult for the country to achieve its ambitious goal of becoming a high-income economy by 2045. This is especially so since the Gen-X (44-59 years old) and Baby Boomer (60-78 years old) Indonesians will soon make way and pass down the torch of national leadership to them.

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