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December 3, 2020

Asia

INDONESIA: Potential repercussions of the arrest of fisheries minister

BY Bob Herrera-Lim

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( 5 mins)
  • The arrest of fisheries minister Edhy Prabowo may weaken Defense Minister Prabowo Subianto and endanger his 2024 aspirations.
  • Both President Joko Widodo and Prabowo have an interest in keeping his Gerindra party in the coalition, but Prabowo could still leave in a fit of spite.
  • The administration has enough parliamentary headroom to survive a possible Gerindra party departure, but a narrow majority does not work well for the president’s reform aspirations.

Last week, officials of the anti-corruption commission (KPK) arrested Edhy Prabowo, Minister of Maritime Affairs and Fisheries, for allegedly having received about USD 130,000 in bribes for export permits for lobster larvae. According to the KPK, it has arrested 16 other people, including other ministry officials and executives of the private companies participating in the export program. This week, KPK officials confiscated an additional USD 280,000 in cash and several bicycles from Edhy that it claims are proceeds of the scheme.

In 2016, then fisheries minister Susi Pudjiastuti banned the export of lobster larvae because of the declining stock of wild lobster in Indonesian waters. However, Edhy quickly reversed the policy in May this year, allowing exports to restart. The lobster spawn is sold primarily to Vietnam, where they are raised to maturity and then sold to China and Taiwan as the main markets. Fisheries is not a major export or industrial sector for Indonesia, so the immediate and direct economic consequences of any policy instability in the sector will be limited.

Rather, potentially more significant is that Edhy is one of two cabinet ministers from the Gerindra party, the other being Defense Minister Prabowo Subianto, the 2014 and 2019 presidential candidate. Edhy was Prabowo’s driver and aide in the 1990s, even joining him when he was in exile in Amman, Jordan from 1998 to 2000. He joined politics when Prabowo established the Gerindra party in 2008. After the 2019 elections, President Joko Widodo offered Gerindra a place in the government coalition to neutralize the most high-profile opposition to his administration; it is the third-largest party in the 575-seat lower house, with 78 seats, or 13%.

Prabowo Subianto’s dilemma

Prabowo could abandon Edhy, replace him and stay with the Widodo coalition. This would be an implied recognition of his guilt but the damage would be contained if only a limited set of ministry officials and some marginal Gerindra members are eventually proven to have been involved in the controversy. Alternatively, Prabowo could decide to stand with Edhy, quit the Widodo cabinet, and bring Gerindra into the opposition ranks. With the goal of discrediting the KPK’s investigation and gaining the sympathy of his followers, he could claim that the government pushed the corruption case for political ends.

Both courses of action are plausible, but their political consequences would ultimately hinge on whether the KPK establishes a credible case that ensnares a wider set of higher-ranked Gerindra officials. This would establish the policy reversal as being driven not only by Edhy and a limited set of co-conspirators, but possibly by powerful factions in the party and maybe even with Prabowo’s knowledge. This speculation is being fueled by media reports that Gerindra officials are either listed owners or executives of some companies granted export permits. One of the exporters is owned by a foundation of the defense ministry, which is under Prabowo. A special aide to Edhy even designated only one firm, PT Aero Citra Kargo (PT ACK), as having the exclusive right to transport lobster larvaes for export — which would imply financial benefits above the amount Edhy is charged with receiving. In fact, PT ACK is the source of the money that ultimately made its way to Edhy through intermediaries, generating more speculation that he has a stake in the company.

If the KPK can prove a wider and more systematic money-making scheme, then it becomes difficult to distance Gerindra from the controversy. It would discredit Prabowo’s attempts to portray the investigation as political persecution of either him or the party. And if Gerindra left the administration by then, it would have lost all its political benefits with little or no political gain to show. Over the longer term, therefore, a credible KPK prosecution of Edy would leave Prabowo weaker, regardless of whether he leaves the coalition, and possibly frustrating a third run for the presidency in four years.

Widodo also faces challenges in managing the fallout. His best outcome is a diminished Gerindra and a weaker Prabowo within his coalition while the KPK prosecution proceeds. However, if Gerindra were to join the opposition, it would shrink his parliamentary majority and make his reform agenda vulnerable to horse-trading by even the middle-sized parties. Also, as an outsider Prabowo could still galvanize some anti-administration opposition. Another bad outcome for Widodo would be for a half-hearted prosecution where Prabowo eventually stays in the government, because it would hurt Widodo’s governance and anti-corruption credentials on the assumption of some political accommodation between the two personalities. It may not immediately affect the administration, but as the protests by students and workers over the past 12 months have shown Widodo is not invulnerable to street-based opposition even if he has the political elites on his side.