Indonesians often complain about kelas menengah ngehe, or the "awful middle class", on social media.…
With most Indonesians transfixed by the government’s messy management of Covid-19, one issue has unexpectedly cut through the noise – growing questions over the relevance of “millennials” in President Joko “Jokowi” Widodo’s inner circle.
The issue was first raised when Andi Taufan Garuda Putra, one of the president’s 14 special staff, was criticised for allegedly abusing his position to promote his own business.
Andi, founder of peer-to-peer lending startup Amartha, sent letters using official Cabinet Secretary letterhead to sub-district heads across the country, asking them to use Amartha’s services for public education in their response to Covid-19. Andi has since withdrawn the letter and issued a public apology, but his actions put the other millennial special staffers under the spotlight.
Adamas Belva Syah Devara, presidential special staffer and co-founder of Ruangguru (the largest education startup in Indonesia), was soon criticised after it was revealed his company was selected as a training provider in the government’s pre-employment program. Under the program, which was one of Jokowi’s main campaign promises in 2019, unemployed citizens receive skills training designed to help prepare them for the workforce.
The government has allocated Rp 5.6 trillion (A$567 million) to the training program, which will be implemented by Ruangguru and seven other startups. Belva denied having a role in Ruangguru’s selection. But following widespread anger over this apparent conflict of interest he resigned from his position as presidential special staff. He did not, however, indicate that Ruangguru would be giving up its contract.
On 24 April, Andi followed Belva’s lead and resigned as well.
Questions have now begun to be asked about another special staffer. Gracia Billy Yosaphat Mambrasar previously claimed that 21 Papuan entrepreneurs that had been trained by his company had secured Rp 1.44 billion in loans from the Ministry of Cooperatives and Small and Medium Enterprises. The Ministry has since said only cooperatives could receive loans, and the 21 entrepreneurs would only be eligible if they established cooperatives.
While it is easy to criticise the president for not providing clear boundaries for his millennial staffers, the problems are not simply a matter of poor governance. Rather, these incidents demonstrate the problems created by placing so much hope in millennials and their ties to the digital economy.
Over recent years, senior political figures, especially Jokowi, have expressed hope that tech-savvy “millennials” and the startups they run will transform the country. But these expectations ignore the fact that most of these prominent startup running millennials are actually part of the same oligarchic structures that have long shaped Indonesian political and economic life, usually for the worse.
A notable aspect of the 2019 presidential and legislative elections was the obsession politicians had with the term “millennials”. Borrowing straight from common definitions in developed countries, Indonesian millennials are often described as educated, comfortable with digital technology and highly engaged on social media. But these depictions ignore the fact that a large segment of their age group lives below the poverty line.
Despite the gap between common stereotypes and reality, millennials comprised a significant portion of potential voters, and presidential candidates from both camps tried hard to attract their votes.
Sandiaga Uno, for example, promised that if he and Prabowo Subianto were elected, they would provide business opportunities for millennials. Jokowi, meanwhile, used one of the presidential debates to embarrass Prabowo over his lack of knowledge about “unicorn” startups, that is, startups valued at more than US$1 billion.
In fact, throughout his time on the national stage, Jokowi has repeatedly tried to portray himself as the political figure who best understands young people. On the campaign trail for Jakarta governor in 2012 he leaned into his image as a metalhead, and more recently named local band Burgerkill as his favourite band. He has taken to attending public events in casual jackets, and has even been filmed riding motorcycles during regional visits.
Given the way that Jokowi has presented millennials and the digital economy as representing the future of Indonesia, it is no surprise that he selected seven prominent millennials to be the face of his administration during his second term.
The digital reconfiguration of oligarchy
The announcement of Jokowi’s second-term cabinet in October 2019 was met with widespread disappointment. Most of his picks seemed to be the result of political negotiations rather than concern for effective policy implementation. There is little doubt the appointment of seven millennial special staff about a month later was designed to alleviate these concerns.
The implicit message in the selection of these millennial staffers was that despite the presence of so many New Order figures in the cabinet, the president is still concerned with fostering the regeneration of Indonesian democracy. The millennial staffers were expected not just to provide fresh perspectives and insights for the president, but also inspire their peers to become more politically engaged. But rather than transforming politics, Andi and Belva appear instead to be participating in the grubby practices so long embedded in Indonesian politics.
The problem demonstrated by these millennials lies not only in poor governance but also in the mistaken expectation that millennials (and their association with the digital economy) are inherently transformative. Even a quick look at the backgrounds of prominent millennials shows just how closely connected they really are to the oligarchic power structures that have perpetuated inequality in Indonesia.
For example, the cabinet includes the most prominent millennial, Gojek founder and Minister of Education and Culture Nadiem Makarim, who had amassed wealth of around US$90 million prior to his appointment. Another prominent millennial, Deputy Tourism and Creative Economy Minister Angela Tanoesoedibjo, is the daughter of Indonesian media mogul Hary Tanoesoedibjo and has millions of dollars in private wealth.
Meanwhile, four of the seven presidential special staffers own their own corporations. One of them is Putri Indahsari Tanjung, the daughter of Chairul Tanjung, one of wealthiest people in Indonesia.
While they may be competent, they hardly have much in common with ordinary Indonesian millennials.
Further, there is nothing inherent in startups that means they will be transformative. In many cases, they are just new sources for the accumulation of wealth, and most have strong ties to the oligarchs of the kind who have always been powerful in Indonesia.
Gojek, for example, is often marketed as “the work of children of the nation”. As one of a handful of Indonesian unicorns, the company has attracted investors from all over the world. One of its local backers is Agaeti Ventures. A key figure in this venture capital firm, and Gojek board member, is Pandu Sjahrir. Pandu is also a director at Toba Bara Sejahtera, a coal company associated with his uncle, Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan. Considered the most influential of all political figures close to Jokowi, Luhut has official net wealth of millions of dollars.
Similarly, one of the other equity funds that has invested in local startups is Northstar, owned by influential business player Patrick Sugito Walujo. Northstar recently invested in one of Ruangguru’s main competitors, Zenius, another education startup initiated by a “millennial”. Patrick’s father in law is TP Rakhmat, an Indonesian billionaire who made his fortune in the automotive and mining industries.
Patrick and Pandu are just small nodes in the complex startup financing system. Nevertheless, they are two examples of how startups – usually praised for disrupting conventional ways of doing business – are actually often very well connected to oligarchs.
People like Patrick and Pandu have been able to act as intermediaries between the older generation of wealthy Indonesians and the startup businesses touted as the future of the nation. In fact, the oligarchs have simply adapted to the new way of doing business. Digital technology, described as the tool of millennials, often maintains old inequalities.
It is premature, and probably unfair, to dismiss all of the president’s special staff just because of the mistakes of Andi and Belva. But rather than just praising millennial startup founders for their innovation and creativity, it is important to remember that their achievements are often connected to networks of wealthy elites – networks that are not accessible to the majority of Indonesian millennials.