June 22, 2015 / 9:55 PM / in 2 years

In 'jihad' for nationalism, Islamic group plans an Indonesian car

PALEMBANG, Indonesia (Reuters) - Fed up with capitalists plundering Indonesia’s riches, members of the country’s second-largest Islamic group have drawn up plans to launch a “people’s power” movement.

Then-mayor of Solo Joko Widodo poses with a locally made Esemka car in this February 25, 2012 file photo taken by Antara Foto. REUTERS/Dhoni Setiawan/Antara Foto

On top of their list: build a national car.

If realized, the Muhammadiyah group’s ambition would revive a project launched by autocratic leader Suharto’s son, Tommy, in 1996 but halted during the Asian financial crisis just two years later. As yet, though, its plans for the car are sketchy.

A century-old Islamic group in the country which has the largest number of Muslims in the world, Muhammadiyah is known mainly for its ubiquitous schools and hospitals. But it also has ambitions to break into tourism, food and the fishing sectors.

The group’s push to become a force in the economic and corporate spheres has been spurred by the success of its so-called “constitutional jihad”, which has dealt legal blows to private participation in the energy and water sectors and now threatens to reverse the convertibility of the currency.

Muhammadiyah, which has some 30 million followers, believes it has a mission to protect Southeast Asia’s largest economy from globalization and capitalistic policies that favor foreign investors over Indonesians. But its campaign could derail President Joko Widodo’s already stumbling efforts to attract desperately needed investment from abroad.

“Muhammadiyah is now in the middle of a struggle between a capitalist economic system and a socialist economic system,” said Syafrudin Anhar, head of the group’s economic committee.

“The world will not reach peace and prosperity through political intrigue, but rather through economic balance.”

“CONSTITUTIONAL JIHAD”

Indonesia’s largest Islamic group, Nahdlatul Ulama, also funds schools and hospitals, but is not overtly political.

Muhammadiyah, thee years ago, challenged parts of the oil and gas law, saying they violated a constitutional tenet that all land, water and natural resources must be controlled by the state. Its victories in that case became the opening salvo in what became known as a “constitutional jihad”.

The group now has 115 laws in its sights, including legislation on foreign exchange, investment and the power sector, and also plans to challenge Widodo’s decision to scrap fuel subsidies, his boldest policy step so far.

“We are not against foreign investors as long as there are clear limitations on foreign involvement in economic sectors,” Anhar said.

Anhar and a small group of mainly Muhammadiyah economic professors gathered this month for a three-day conference in the town of Palembang to draft an economic battle plan for the next five years.

Once finalised, the blueprint will be submitted for approval at the group’s national congress in August.

The plan is to consolidate small Muhammadiyah businesses into industry-specific companies that will receive initial funding through a network of micro-financing cooperatives.

Muhammadiyah sees opportunities to cash in on the growing demand for halal food and halal tourism in Indonesia.

As for the national car, its vocational schools have already built several proto-types of a model called the Esemka, which was used by Widodo as his official vehicle when he was mayor of the city of Surakarta or Solo.

One proto-type can run on solar energy, said Bambang Setiadji, professor at Solo’s Muhammadiyah University (UMS).

“To establish such an industry, it is not that difficult,” he said. “UMS has given birth to many automotive industry engineers whose quality competes with those of China‘s.”

The group hopes to get Widodo’s backing to start mass production of the Esemka this year under a partnership between an Indonesian and a Chinese company that would aim to source up to 80 percent of its components from Indonesia.

“We want our own companies and to make products for the middle and lower class,” said Nadrattuzaman Hosen of the group’s economic council. “The difference will be that our profits will not go to the rich overseas, but will remain at home and go to our people.”

Additional reporting by Klara Virencia in JAKARTA; Editing by John Chalmers and Raju Gopalakrishnan

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