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Widodo courts 'cool factor' of unicorns to appeal to young voters

Startup-friendly policies tap into growing influence of new companies

Achmad Zaky, left, founder and CEO of e-commerce startup Bukalapak, meets with President Joko Widodo, center right, on Feb. 16. (Courtesy of president's office)

JAKARTA -- Achmad Zaky, founder and CEO of one of Indonesia's largest online marketplace apps, Bukalapak, recently found himself in hot water from President Joko Widodo's supporters for appearing to want the president to lose in April's presidential election.

Despite the gaffe, the president forgave Zaky, a sign, or rather admission, that unicorns -- private companies with valuations over $1 billion -- like Bukalapak are crucial to his bid for re-election. Indonesia is home to four unicorns, the most in Southeast Asia, and this is an easily recognizable achievement for the public. It helps him appeal to younger people, who make up a considerable portion of eligible voters.

Widodo received Zaky at the presidential palace on Feb. 16, the day before he faced off against opposition candidate Prabowo Subianto in the second televised debate. The president called on the public to continue supporting the company, saying Indonesia "must encourage young people with innovative [ideas] and creativity."

Just days before, Zaky had caught the wrath of Widodo's supporters with a tweet criticizing the government's low spending on research and development compared to other countries. He finished by saying, "Hopefully the new president can raise [spending]."

The tweet, which has since been deleted, led to calls to stop using Bukalapak, and the hashtag #UninstallBukalapak became a trending topic in the Indonesian twitter-sphere.

Widodo quickly stepped in. "I invite you today to stop uninstalling Bukalapak. Because we have to push, we must encourage young people who are innovative, who are creative, to move forward," he said.

Audience members react during the second debate between Indonesian presidential candidates ahead of the next general election in Jakarta on Feb. 17.    © Reuters

The early stages of Widodo's administration focused on building physical infrastructure, cutting back on fuel subsidies and channeling money into roads, bridges, airports and seaports. The president has in recent years launched several startup-friendly policies as Indonesian startups, especially the unicorns, are growing in stature and becoming more important to the country's economy.

The government is now backing an initiative to foster 1,000 startups by 2020 with a total valuation of $10 billion, and it is playing a key role in the Nexticorn program, which brings together promising local startups with international investors to help with latter-stage funding. In 2017 Widodo ordered the relevant ministries to support startups, including by offering grants to incubators. His administration also made it easier for e-commerce companies to receive low-rate bank loans and provided simplified tax procedures for those with annual turnover below 4.8 billion rupiah ($340,000).

The president's swift protection of Bukalapak is also a sign that a business model like the unicorn's form an important part in Widodo's re-election hopes, as it serves those in the lower rung of the income ladder, Widodo's core support base. Bukalapak allows small scale merchants to sell their products or offering online using the company's platform, allowing them to increase their income by cutting out the middlemen.

Indonesia needs to prepare "farmers ... small businesses, micro businesses and super-micro businesses so they know how they can take advantage of this online system," was Widodo's call in the second televised presidential debate on Feb. 17.

"Bukalapak has contributed to making the micro, small and medium enterprises' business [join] the online ecosystem," said David Sumual, chief economist at Bank Central Asia. "Some of the MSMEs are players from outside Java who are finally getting a chance to sell their products across the nation."

Bukalapak's app serves people in the lower rungs of the income ladder, Widodo's core support base. (Photo by Ken Kobayashi) 

Widodo is keen to show himself as unicorn-friendly; he made an appearance at an event in Vietnam when ride-hailing operator Go-Jek, Indonesia's first unicorn, announced its official launch in the country back in September. He made a surprise appearance at Bukalapak's ninth anniversary event in January. In the televised second debate, he abruptly asked Subianto what his policy was on supporting unicorns. Subianto initially did not understand what the term meant.

"Unicorns can be a proof of Jokowi's achievement," said Sumual. "At least, they were all created when Jokowi was in office."

This is not the first time an Indonesian unicorn has come under criticism from the public. Go-Jek faced a similar #UninstallGojek campaign last year when a social media post from one of its executives supporting the LGBT community went viral. Homosexuality is not illegal in Indonesia except in Aceh Province, which applies Islamic sharia law, but the country has in recent years seen a rise in anti-LGBT sentiment, especially as conservative Muslims regain political clout.

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